Digital Radio: Place or Space?

New Zealand is unique in the global radio environment for two main reasons.

First, as is well known, it is the single most deregulated radio market on earth. As such, it has also become the place where you’ll find the most radio stations per capita, and the highest proportion of those radio stations owned by foreign companies.

Second – and this is less widely-known – it is also the only developed country on the face of the planet with no discernible government policy on Digital Audio Broadcasting (DAB).

However, the question naturally arises as to which digital format will be the one that ends up dominating the consumer market for broadcast radio services. There are several options to choose from.

The entire radio industry in Great Britain has been following in the wake of the BBC’s considerable investment in the Eureka 147 system: a terrestrial digital broadcast system requiring the purchase of new receivers, but which allows for the digital delivery of existing FM radio programming, plus (in the BBC’s case) several additional digital-only channels. The release in the last week of reasonably affordable and truly portable digital receivers (and not just in-home or in-car players) has cemented in the format’s success in the UK.

America is a little more at odds with itself. DAB companies Sirius and XM have launched satellite services that cover the entire continental US with a sizable coverage footprint, offering up to 200 channels (120 at present) of ‘premiere’ digital audio. However, neither Sirius nor XM are radio companies. These are entirely new subscriber-based services (think Sky Digital without pictures) that are more or less in direct competition with existing AM and FM broadcasters – and not an extension of radio into the digital realm. This is important for a number of reasons, not least because it has led the radio industry to invest in technology from ibiquity Digital known as ‘IBOC’ (In-Band, On-Channel), or as it’s now known, ‘HD Radio’.

In a January Music Week article (Williams, 2003), Capital Radio’s group chief executive David Mansfield said, “We’ve all gone to the States to borrow things, but in the past five years that’s happened less because UK radio has caught up from a technology point of view. US radio is becoming increasingly different and is less relevant to us in many respects”.

Bill Suffa, Clear Channel senior vp of capital management pointed out the financial balancing act with the shift to digital in the United States (Bachman 2003): “There are no radios, so why should we deploy capital? On the other hand, we’re an [iBiquity] investor, and we want to move the industry forward.”

Earlier this week, I spoke to senior radio engineer Brian Boys from Spectrum Management (Ministry of Economic Development) about what direction he thought New Zealand would head in – Eureka 147 like the UK? Satellite DAB? HD Radio?

His reply was interesting (and if representative of the Ministry’s viewpoint, then a telling clue as to why we don’t have a policy on this yet). He simply said, “We’ll probably just do whatever Australia do.”

Australia’s Digital Broadcasting policy is outlined here: http://www.worlddab.org/events/proceedings/australia.pdf – a document that outlines a broad commitment to the Eureka 147 ‘L-band’ standard, while giving room to maneouver, should things go off in a different direction. In other words, Australia’s not really sure either – but at least they have a policy.

But the question has to be asked: On what basis should New Zealand emulate Australia’s lead in the digital radio sphere?

Of course, there’s the Blue Skies agreement: Closer Economic Relations (CER) is something that the New Zealand government is committed to. And yet, that’s scarcely affected any other aspect of our broadcasting policy – not even the RBA’s stated commitment to play more NZ music (though CER was one reason given as to why the RBA objected to legislated quotas).

There’s the possibility that a major investor (and I’m talking major in terms of those companies that can launch and maintain satellites) will want to create an Australasian or even broadly Asia-Pacific region satellite DAB service, and New Zealand will just be subsumed into Australia’s digital audio environment: the Prime-ification of digital radio?

Ultimately, though, there’s a tension at work operating in several directions when considering formats for digital broadcasting. There are issues of technology – and sometimes these things are driven by technological leaps. There are social issues – and sometimes people just prefer one media manifestation over another. Naturally, these things will come into play. But there are two issues that should never be overlooked when introducing a broadcasting technical standard:

1) Geography

2) Existing broadcast environment.

In its geography, New Zealand more closely resembles the UK than it does Australia or the USA. This explains, among other things, why cable television never took off in NZ. In the words of one former television executive (from whom the line is fairly ironic), “We are too long and skinny.”

Australia more broadly the size and shape of the continental US than either NZ or the UK. Naturally, there is a pull towards emulating the US situation, whereby ‘premiere audio’ is delivered via satellite on a subscription basis, and existing radio stations upgrade to HD Radio if the budget allows and if they believe the consumer uptake will warrant the expense (estimated around US$300,000). With New Zealand the size and shape of the UK, it’s arguable that a terrestrial service driven by public radio, but with ‘opt-in’ from commercial operators might be the way to go. There are significant geographic stretches between major centres, and nowhere near the degree of commuting that goes on in either the US or Australia. 200 channels may well be too much for a population that spends only 45 minutes a day in the car.

Then again, Australia and the UK have more in common with each other from the perspective of the existing broadcast environment. Both have a strong public radio infrastructure which, if it doesn’t drive the commercial industry, at least appears on its radar. New Zealand and the United States have a fairly marginalised public radio service – dwarfed and drowned out by Clear Channel stations up and down the country.

Now, Eureka 147 – up and running in the UK – might be more suitable for Australia than it is for NZ, on the grounds that it’s proven to work as a delivery system for a broadcast model that has public radio at its centre. Likewise, New Zealand’s deregulated marketplace might well easily absorb yet another player – this time digital and offering a subscriber-based system. It certainly seems to be working for television in this country.

Terrain is also a consideration for broadcasting. Australia is broad and flat. New Zealand is mountainous. Far better to broadcast from above via satellite than to try and navigate the Southern alps with a series of terrestrial transmitters.

Whichever factor proves the more decisive, the fact remains that the tension between geography and media environment – between place and space – needs careful consideration when deciding on a format for future generations of radio broadcast services.

In one respect, whether geography or market model is the dominant factor, Brian Boys is absolutely right: we should keep watching Australia to see which way they jump on this issue.

But we should jump in the opposite direction.