News story about research demonstrating increased consumer listening to internet radio in Germany, whilst commercial radio owners state that the DAB digital radio platform is not viable, written by Grant Goddard in December 2010 for Grant Goddard: Radio Blog.

1. NEWS: IN GERMANY, DAB
DIGITAL RADIO "IS NOT
FINANCIALLY VIABLE",
INTERNET RADIO IS ON THE
RISE
by
GRANT GODDARD
www.grantgoddard.co.uk
December 2010

2. News: In Germany, DAB Digital Radio "Is Not Financially Viable", Internet Radio Is On The Rise page 2
©2010 Grant Goddard
“DAB or DAB+, in its current form, is not financially viable for commercial radio stations,” said
Stefan Schmitt, managing director of RTL’s Berlin radio stations, in Promedia magazine. He
pointed out that user numbers were increasing steadily for the internet, wireless via PC,
laptops and smartphones. “Under these circumstances, I do not know where exactly the added
value is for DAB,” he said.
Schmitt argued that the whole radio business model is still based on FM broadcasting and will
remain so “for the foreseeable future.” He believes that the best alternative to broadcasting is
currently ‘online radio’: “We are achieving market penetration [with online] much more rapidly
than with DAB, which is not market driven.”
In Germany, a dispute continues to rage over the funding of DAB radio. The CDU party’s
media expert Thomas Jarzombek has argued that “more than €200m of public funds were
wasted on DAB” and that “these resources should be used for technologies that are well
received by the public.”
Negotiations have been proceeding for months over a further €42m of public funds earmarked
to be released to re-launch DAB radio nationally using the DAB+ codec, following the failure of
the earlier launch using the older DAB codec. Initially, the contracts between transmission
provider Media Broadcast and the station owners were meant to have been signed on 22 July
2010.
Then, the subsequent 22 September 2010 deadline for negotiations passed without
agreement, as a result of commercial radio’s unwillingness to commit financially to
broadcasting on DAB+. This deadline has been extended again to 15 December, which
experts in Germany now suspect is “the last chance for DAB+.”
At its annual conference on 12 November 2010, the German association of commercial
broadcasters, VPRT, reiterated its opposition to the government forcing the introduction of
DAB+ radio upon the German market. Outgoing VPRT vice president Hans-Dieter Hillmoth
said: “The current draft of the new Federal Telecommunications Act ignores the existing
interests of commercial radio in the functioning infrastructure, whose core business is FM
radio.”
New research in Germany by the Frankfurt Link Market & Social Research Institute has
demonstrated the increasing popularity of listening to radio via the internet platform.
Consumers’ preference for radio delivered to a PC or laptop increased 84% year-on-year, and
is now exceeded only by traditional radio hardware – car radios, kitchen radios and stereo
systems. Amongst 14-29 year olds, radio via a PC/laptop scored second only to the car radio.
The question put to respondents was: “Radio can now be received on many different types of
appliances. Please indicate which appliances you particularly appreciate, regardless of
duration of usage.”
[First published by Grant Goddard: Radio Blog as 'Germany: DAB "Is Not Financially Viable", Internet Radio On The
Rise', 4 December 2010.]
Grant Goddard is a media analyst / radio specialist / radio consultant with thirty years of
experience in the broadcasting industry, having held senior management and consultancy
roles within the commercial media sector in the United Kingdom, Europe and Asia. Details at
http://www.grantgoddard.co.uk