The impact of digital radio
Digital radio has the potential to improve the effectiveness of radio by increasing the number of stations that can be broadcast with the same amount of spectrum, thereby increasing the advertising potential. Additionally, the listening experience would be enriched by the improvement in sound quality as a result of less interference. Digital radio also enables enhanced services as it provides a data stream, which can be used to display information about the songs being played.
ICASA has approved two digital technologies for digital radio in South Africa: Digital Audio Broadcasting (DAB) and Digital Radio Mondiale (DRM). DAB, meant as a replacement for FM, does not operate on the same frequency as FM,but uses frequencies traditionally used by television.
DAB does not require the immediate migration of the FM stations,but could coexist with them. The other technology that has been approved for use in South Africa is DRM, which offers sound quality similar to FM, but operates in the short wave and medium wave bands. Medium wave is not common in South Africa, with only two commercial stations and a number of community stations using it. While this technology could be implemented immediately, it would require new receivers, which are expensive. DRM is being tested in a number of countries including France, India, and Brazil. Although it has been running a digital audio broadcasting (DAB) pilot test for some time, South Africa does not have a digital broadcasting system for commercial radio.
Currently, the spectrum available for DAB is being used by analogue television stations. The country is hoping to move from analogue television to digital in the next five years, at which time the spectrum should become available for the introduction of digital radio. It is unlikely that digital radio broadcasting will take off in South Africa anytime soon as there are currently no plans to replace FM services with digital services. The experience of DAB in other countries has been mixed. The United Kingdom is the most advanced in the penetration of DAB, but even there digital radio has not translated into meaningful revenues.
A major stumbling block to the implementation of digital radio is that new radio receivers would be required both at home and in cars. As a result, we do not expect digital radio to have a significant impact on revenues in the near future.
Source: wc media & entertainment outlook report 2010 – 2014