Digital Radio Development:

1. Digital Radio Development: How to drive it ? John Yip Chief Engineer RTHK ABU Digital Broadcast Symposium 2010.03.09

2. 1. Introduction Major DR (Digital Radio) Technologies: • Eureka 147 DAB family • DRM family • HD-Radio DAB and DAB+ • DAB, using MP2 / MUSICAM, has been around for 15+ years. Major growth in UK (10M Rx) • DAB+, using HEAAC v.2 DRM • DRM30, DRM+ • More spectrum-efficient but receivers are more expensive. • Promising for providing distant services.

3. 2.1 Key Factors Affecting Growth (ref. ABU DBS 2008/2009, J.Yip) 2. Growth Factors (1) Driving Force (Digital Radio) DFdr = Mdr [R, P, M, O] * T (Memory aid: Must Remove Promptly My Old Television) For Terrain factor (T), a basic description was given in ABU DBS2008 (J.Yip, Mobile TV Development).

4. 2. Growth Factors (2) 2.2 Digital Radio, RPMO factors and their components: Regulatory, R : Pricing, P:

5. 2. Growth Factors (3) Marketing, M: 2.2 Digital Radio, RPMO factors and their components: Other factors, O : Content:

6. 2. Growth Factors (4) 2.2 Digital Radio, RPMO factors and their components: Consumer Habits: Device Attributes:

7. 2. Growth Factors (5) Quality: • The above could be copied and pasted into the RPMO calculator given in ABU DBS 2009 & downloadable from RTHK, under HDTV and IPTV Development (2009-04), for a detailed analysis: • http://www.rthk.org.hk/mediadigest/class/index_tech.html • There are numerous papers written on the subject, pointing out broadly the main drivers for DR growth : • New digital radio stations & contents, • To attract consumers to new devices anddesigns/ features, • Improved sound quality (given good reception).

8. 2. Growth Factors (6) • These correspond to the “O” factors in the RPMO analytical model. • Receiver pricing is often mentioned. Consumers’ economic affordability is normally not an issue in a developed economy. The issue is related to opportunity cost, not to affordability. • A related equation (ABU DBS2009) on receiver pricing, is as follows: • Price A = Price B * (ratio of GDP/capita) * (ratio of consumption in hours/week) • Further to the RPMO model, there is an important externality due to the limited technological competitiveness of Digital Radio in the multimedia (audio-visual) environment, from the consumers’ perspective. This externality (Tc) is described as follows.

9. 2. Growth Factors (7) 2.3 Technological Competitiveness (Tc): • If “Seeing is Believing”, then Radio has been born handicapped, as it does not provide moving video information/ entertainment. • The following table on Tc (Table 1) is postulated, to show the limited competitiveness of Digital Radio in the modern multimedia environment. • So, a rollout of digital radio needs extra efforts and investments, as Digital Radio has to compete for the hotly-pursued consumer attention.

10. 2. Growth Factors (8) Table 1:- Technological Competitiveness (A/V), Tc, postulated

11. 3. Digital Radio Developments in Selected Economies (1) We shall explore the growth factors by referring to the developments in UK (well advanced in DAB), Australia(having a good start in DAB+) and Hong Kong (with digital radio emerging). The following is a summary table of the various factors: RPMO, Terrain, Growth, and estimated RPMO values using the aggregate curve (Media Digest, 2009-04, J. Yip, Figure 1) developed for HDTV and IPTV. The curve has been used as a surrogate, due to limited digital radio penetration, apart from that in UK. (Development in N. America is not included.)

12. 3. Digital Radio Developments in Selected Economies (2) Table 2:- RPMO (Digital Radio Development in Selected Economies)

13. Table 2:- RPMO (Digital Radio Dev. in Selected Economies) (Continued)

14. Table 2:- RPMO (Digital Radio Dev. in Selected Economies) (Continued)

15. Fig. 1: Benchmarking curves for HDTV and IPTV, based on RPMO analyses

16. 4. Fostering Digital Radio Growth Based on the RPMO analytical model and on the data in Table 2, the following measures are required: • Proactive regulatory framework, providing incentives for the industry to invest. • Lowering digital radio receiver prices. • Prolonged, effective promotional campaigns. • New/ extended range of contents, with local programming. • Exploiting consumers’ habits eg listening to radio whilst on the internet, reading, working.

17. 4. Fostering Digital Radio Growth (cont.) • Exploiting older people’s passion for radio. • Wide range of receiver types with attractive designs/ features, including AM/FM. • High audio quality by using suitable bitrates. • Strong reception even for indoors (eg 76-80 dB uV/m); using echo-cancelingrepeaters. There is no single measure for ensuring success in a rollout; each economyneeds to set its own strategies.

18. 5. Summary • Rolling out digital radio successfully is challenging, partly due to the limited technological competitiveness of digital radio in the intensifying multimedia environment (Table 1). The RPMO generic growth equation and the benchmarking curve (albeit ballpark) could be useful for planning a digital radio rollout. • In Hong Kong, HDTV and IPTV have had good TVH penetration figures reaching some 40% and 50% (ie averaged growth rates being 20% pa and 10% pa) respectively. For digital radio in Hong Kong, Table 2 has revealed several obstacles. Major push is needed to parallel the growth in UK/ Australia ie attaining 3 - 4% pa.

19. ~ Thank You ~