1 June 2010 – RADIO SPECTRUM POLICY GROUP STUDY ON THE FUTURE OF RADIO BROADCASTING – AER POSITION
The Association of European Radios (AER) is a Europe-wide trade body representing the interests of over 4,500 commercially-funded radio stations across the EU27 and in Switzerland.
AER is located at:
Association Européenne des Radios
76, av. d’Auderghem,
AER’s Interest Representative Register ID Number is 6822083232-32.
AER’s main objective is to develop and improve the most suitable framework for private commercial radio activity. AER constantly follows EU actions in the fields of media, telecommunications and private radio transmission, in order to contribute, enrich and develop the radio sector.
AER therefore warmly welcomes the opportunity to express its views in the frame of the Radio Spectrum Policy Group (RSPG) study on the Future of Radio Broadcasting.
On-air broadcasting radios reach massive audience on a daily basis in all EU Member States: between 60 and 85% of the EU population on average listens to radio for at least 2 or 3 hours per day, as shown by national audience measurement.
Commercially-funded radios indeed constitute a unique network of small and medium-sized enterprises (SMEs), contributing to cultural diversity, media pluralism, access to creativity, social inclusion. They also offer free-to-air services of general interest:
– they evolve in highly competitive environments
– their programmes encompass, broadly speaking, all possible formats, from debates to music-only
– As for the music broadcast, within one market, as soon as there is demand expressed, it has to be fulfilled; so, most of the musical expressions are represented
– most of them are non-politically affiliated, and certainly keep the freedom to express their opinion or to participate to the public expression of the opinions of their listeners
– their audiences are local, regional, or national
– they strive to develop on all possible platforms
– during natural, major or minor disasters, radio is one of the first tool to inform the public
Radio is the most intimate medium, and has been so for the past 50 years at least: it is indeed ubiquitous, mobile, simple-to-use and free-to-air. All these features enable our audience to cultivate a personal relationship with our programmes, our DJs, our hosts, and our brands. Our listeners thereby access programming they enjoy, and useful information.
1. What are the activities that would be beneficial for the development of Radio Broadcasting in Europe?
As a means of introduction to how commercially-funded radios in Europe live their current and future business environment, one should bear in mind that the latter can be dryly presented as being built on three pillars; if one of them is missing, commercially-funded radios cannot exist:
– Access to spectrum
– Access to copyright-protected works
– Access to advertising revenues
So, and although the RSPG deals only with spectrum management issues, AER would like to address shortly these key issues, before presenting AER’s views on spectrum issues.
– Access to advertising revenues
AER would like to recall that, in most of Europe, currently and for the foreseeable future, there is only one viable business model: free-to-air FM broadcasting on Band II. European radios can only broadcast programmes free of charge to millions of European citizens, thanks to the revenues they collect by means of advertising. These revenues are decreasing all through Europe due to two factors: the shift towards internet-based advertising, and the recent financial crisis. For 2009, radio advertising market shares have decreased all across Europe compared to 2008 . As a result, any constraint on radio advertising severely endangers AER members’ ability to pursue a viable economic activity.
– Access to copyright-protected works
When it comes to copyrights, AER needs to recall a few important facts and trends: Commercially-funded radios constantly use pieces of music for all produced content. This raw material is almost always protected by copyrights: one of AER’s members’ primary expenses remains that of copyright clearance. Radio broadcasters across Europe pay over €2.6 billion per year for content, mostly music rights , and payment for these rights is negotiated on a regular basis. Therefore, AER is constantly striving to ensure the best possible copyright regulatory framework for its members via the simplification of clearance rules for copyrights: this should be done from one-stop-shops as the current structure of multi-payments and multi-clearance is unviable.
– Access to spectrum
AER would like to underline that it is still unsure how internet transmission can efficiently replace broadcasting. Therefore, radios’ activities still require use of spectrum, as a primary user. As mentioned, in most of Europe, currently and for the foreseeable future, there is only one viable business model: free-to-air FM broadcasting on band II, which only represents 20,5 MHz. Across Europe, nearly every single frequency is used in this bandwidth. Thanks to the broad receiver penetration and the very high usage by the listeners this small bandwidth is very efficiently used. Radio’s plans to broadcast digitally could use band III (174-230 MHz), and L-band (1452-1492 MHz), depending on the EU Member States.
Moreover, and as most of them are SMEs, commercially-funded radios are in no position to compete for access to spectrum with other market players . So, now and for a foreseeable future, commercially-funded radios need guaranteed access to spectrum, in all bands described above: regulation must be tailored to local, regional or national needs in order to allow the best possible development of radio. In these bands, market-based approaches to spectrum management (such as service neutrality or secondary trading) should not be enforced.
AER welcomes RSPG’s acknowledgement that “spectrum is a national resource”. When considering radio, AER would like to highlight that, as mentioned, audience is local, regional or national. Moreover, spectrum is currently efficiently managed by European States and this should remain the case: national radio frequency landscapes and national radio broadcasting markets are different, with divergent plans for digitization, diverse social, cultural and historical characteristics and with distinct market structures and needs. Consequently, enhanced coordination at EU level of spectrum management of bands used by radios does not seem necessary, or appropriate.
However, across the EU, plans to migrate from a satisfying analogue technology (FM) to digital technology are being actively discussed and tested. Any shift towards digital radio broadcasting entails very long-lasting and burdensome investments. Nevertheless, some individual nations may wish to proceed with a move to greater digital broadcasting at a faster rate, as there will be no ‘one-size-fits-all’ approach.
So any shift towards digital radio broadcasting will most likely require a very long process. Decision on the adequate time-frame should be left to each national industry: as a matter of principle, transition to any improved digital broadcasting system should benefit from a long time-frame, unless there is industry agreement to move at a faster rate.
As mentioned, on-air commercially-funded digital radio has not yet achieved widespread take up across European territories. The same is true for internet-based economically sustainable radio. These two means of transmission will be part of the patchwork of transmission techniques for commercially-funded radios in the future, but it is hard to foresee when. So no universal switch-off date for analogue broadcasting services should be envisaged at EU level and decision on standards to be used for digital radio broadcasting should be left to the markets.
2. What is your view upon market evolution regarding Radio Broadcasting in Europe (over the time frame of 2 – 5 years)? Please outline any scenarios you believe to be likely.
Each EU Member State is developing a different scheme for radio, based on its history, culture and needs: commercially-funded radios are local, regional or national actors, and regulation dealing with their access to spectrum should be adopted at the same level, in order to ensure continuity of programmes listened to by millions of EU citizens.
The situation of digital radio’s development illustrates this clearly. Please see the answer to the next question.
As mentioned, the development of digital radio is being intensely discussed and tested across Europe. However the existing framework based on FM broadcasting in band II is likely to remain the main business model for radio in Europe for the next few years, complemented by a growing part of digital online and on-air. To give an example of FM’s possibilities, the Radio Data System (RDS) already enables the transmission of digital data on-air via the FM signal. This provides information to the listener, such as the programme name and identification, or information related to the music or content being broadcasted or soon-to-be broadcasted. RDS also enables the receiver to switch from one frequency to another transmitting the same programme, or to programmes broadcasting information of immediate public interest, like traffic news. FM signal with RDS content resembles hybrid analogue / digital signal, illustrating the spectral efficiency of FM transmissions.
3. There are many different technical platforms at hand that can deliver digital radio – what do you see as the most likely future scenario regarding these – and why?
As mentioned, on-air commercially-funded digital radio and internet-based economically sustainable radio will be part of the patchwork of transmission techniques for commercially-funded radios in the future, but it is hard to foresee when. Broadcasting is currently the only conceivable transmission technique enabling radio with a sustainable / efficient business-model. Therefore, as planned in ITU / CEPT negotiations, band II, band III and L-band should be maintained for radio broadcasting. To illustrate this, please find below a short description of the situation regarding technologies used for radio broadcasting in a selection of European countries.
Finland: in Finland, 5-year broadcasting licenses are granted. The next tender is organised in 2011 for analogue frequencies and there is very little being said on digital radio since the last DAB trial ended four years ago. Therefore the situation with regard the technology used for radio broadcasting should not evolve in the near future.
France: radio will remain primarily based on FM broadcasting in the next few years, as there is no efficient business model yet for radios apart from FM free-to-air on Band II. There are advanced digital radio tests being run, for different technologies, but there is still no obvious financing solution found to migrate to digital radio. Thus, after deciding to prepare the launch of digital radio services (DMB) 3 years ago, with a beauty contest to deliver licenses in 19 main cities in France, the regulation authority decided last year to restrain the contest to 3 cities. Finally, no license has been delivered yet (June 2010). There is still no digital radio service in France, nor any commercial offer of digital radio receivers. Digital radio for the next few years will be, at the most, a complementary solution to FM.
Germany: in Germany, FM on Band II is the most important means of transmission for VPRT’s radio service members. FM on Band II will remain, in the foreseeable future, the basis of commercial activities for private radio stations. In complement, internet radio will also play a certain role in the future. After carefully analyzing the risks and chances of introducing DAB+ in Germany, VPRT’s radio members came to the conclusion that DAB+ is not a market-driven solution and the necessary prerequisite for a successful DAB+ introduction are not fulfilled. To develop digital radio, band III in particular has to be safeguarded for radio use.
Italy: in Italy, the government has finished consulting stakeholders on their suggestions for broadcasting in digital technology. Radios will have the choice to broadcast in DAB+ or DMB. 640 local programmes, 15 national and the public sector (RAI) should start simulcasting programmes in analogue and digital technologies in 6 regions as from November 2010.
The UK: in the UK, commercially-funded radios have worked with the government to set criteria for a potential transition to digital after certain requirements are fulfilled: getting the right infrastructure in place, make sure that listeners will continue listening to digital, etc. Precise elements were set in the UK Digital Economy Act adopted in April: 50% of audience listening to digital radio, the same coverage as the analogue radios have must be guaranteed (98%) and 100% of road coverage must be achieved. If there is sufficient investment in an upgrade, then there will be a transition to digital. The assessment will be run in 2013 to see if the criteria described above are met. In this case, switch-off of analogue radio’s main services would take place in 2015. This is very important, because since the mid-1990s radio stations have borne the costs of maintaining 2 platforms and this is no longer sustainable. Moreover, regarding access to national platforms, commercially-funded radios can only compete in an adequate manner with the BBC on digital radio (DAB). A possible outcome of the current discussions in the UK is that only small local stations continue on the Band II.
Switzerland: in Switzerland, the license to digitise FM signals is included in the new FM license of commercial radio stations. In September 2010, five major commercial stations will start transmitting with HD Radio technology. In October 2009, the first DAB+ multiplex with commercial radios started, but commercial participation is still weak. So it is very likely that a combination of FM, DAB+ and HD Radio will develop in this market.
Markets will decide what is the best suited technology for digital radio broadcasting in Europe: a choice endorsed by consumers. However, as the situation stands now, the most likely scenario for the development of digital radio in Europe will take the form of a combination of different technology standards.
4. What do you think would be the most efficient use of the VHF bands (47-68 MHz, 87,5-108MHz and 174-230MHz) and the frequency range 1452-1479,5 MHz?
As mentioned, radio across Europe is already granted with an efficient, simple-to-use and free-to-air technology: FM on band II. This efficiency relates to the business-model: it is actually an essential part of the only currently-known viable business model for commercially-funded radio. Besides, and as mentioned too, free-to-air FM broadcasting on band II only represents 20,5 MHz. Across Europe, nearly every single frequency is used in this bandwidth. Thanks to the broad receiver penetration and the very high usage by the listeners this small bandwidth is very efficiently used . The success of FM is also evidenced by the fact that very modern communication devices such as mobile phones, smartphones and “media-players” have FM receivers included. Furthermore, by its feels-like-free, widely-spread, mobile, simple and direct model, commercially-funded radio is an essential actor of cultural diversity, media pluralism, access to creativity, and social inclusion. It is also the only reliable way to inform the public in case of a catastrophe and a regional power cut as many devices are powered by batteries. Although analogue, AER therefore perceives FM to be a state-of-the-art efficient technology.
However, as mentioned, across the EU, plans to migrate from a satisfying analogue technology (FM) to digital technology are being actively discussed and tested: Radio’s plans to broadcast digitally could use band III (174-230 MHz), or L-band (1452-1492 MHz) depending on the EU Member States. And, as described previously, nearly each AER Member defends a different approach to digital broadcasting and the standards to be used. This underlines once again the varied approach, and the need to ensure that decisions are taken at national level for spectrum management and for standards to be used for radios. AER therefore believes that the various markets should decide which is the most efficient radio standard, depending on the local situation. However, AER would call the EU to support interoperable solutions.
AER remains available to explain this position in further details.
AER Secretary General
76, av. d’Auderghem,
Tel: +32 2 736 9131
Fax: +32 2 732 8990