Digital radio launches in Australia but will it save FM music stations?

by StreetCorner 06/08/2009

Digital radio was launched today, with events held in Melbourne, Sydney, Perth, Adelaide and Brisbane but instead of new content being the star of the show, digital radio was launched by the radio stars of analogue radio.

Not that they won’t be heard on digital radio, on the contrary, it is expected that the most popular content on digital radio will be the current analogue programming. All your current favourite radio stations are simulcasting their programmes in digital. Austereo, DMG a

nd ABC have also launched digital only stations. No one is expecting big audience numbers this year but some will be hoping for digital radio to address the decline in radio listening amongst younger listeners.

The standard wisdom is that the youth will listen to more radio if companies invest in content that offers something new, something more than the mainstream music selections which are the backbone of commercial FM stations.

But many in the industry are betting that it’s the older audience who may well be the first to embrace digital radio. The proposition for AM listeners (predominately 40+) is relatively straightforward, you get the radio you love but without interference and with superior sound quality. So if you listen to AM radio you could well be enticed to invest in a new radio or will find one wrapped up for you under the Christmas tree.

ABC listeners of either the FM or AM variety are also more likely to buy a digital radio. With a skew to the higher socio economic demographics and with the ABC unconstrained by crass considerations like profitability, they not only have an audience undaunted by the price tag, they have greater freedom to experiment and more stations to offer.

It’s the FM market that is more difficult to pick. It’s hard to imagine that many fifteen years old are going to be jumping for joy if the folks buy them a digital radio. Digital radio is a huge step forward for radio but it’s entering a market where the iPhone is the device of choice for music hungry youth. The iPhone is everything a young person could want; computer, mobile, jukebox and multi media player. You can access every radio station in the world if you have the inclination but that’s not why people buy them, that’s just one of the many perks. So if you buy a teenager a digital radio and they ask you “what does it do” be prepared for them to look baffled if you say “it plays radio” and even more baffled if you say excitedly “it plays radio and displays albums covers” because there is sure to be a pause while the teenager waits for you to list the other hundred or so functions it performs. And please don’t mention that they shouldn’t count on taking it when they travel as it only works in five cities.

The largest commerical radio company in the UK declared last year that it was pulling out of digital radio. They bailed, not because it wasn’t a great platform, rather the CEO said it was a “race of devices” and without digital radio receivers in mobile phones, it was a race that they weren’t winning.

In Australia the industry has learnt from many of the UK’s mistakes. The industry is united in promoting digital radio, all stations will be broadcasting on the digital platform and there is no third party charging prohibitive fees for access. Will this be enough to get Australian youth (or even the not so young 20 something digital natives) to buy digital radios or will the industry have to rely on the boomers passion for radio to get the cash registers ringing at Harvey Norman. Penetration is of digital radios in the UK is almost 30% after 10 years so we'll have to wait and see if Australia can succeed where the Poms haven't.

Disclosure: Streetcorner is owned by Macquarie Media Network, a subsidary of Macquarie Radio Network.

Report Post