GCap’s DAB debacle 

11 February 2008 tbs.pm/858

As my colleagues here have been reporting here on the MediaBlog, GCap have annouced the sale of Xfm outside London, the closure of all GCap’s digital-only stations on the national Digital One multiplex, and the sale of GCap’s majority stake in Digital One to partner Arqiva.

However, having read the release from GCap themselves, we have to un-spin some of the propoganda that is coming out from GCap, and put the facts out there in the public domain.

In their press release, they talk about…

“…Focusing on platforms that listeners want and that generate higher revenues and profit…”

How on earth they can describe DAB as a platform that listeners do not want is beyond me. RAJAR’s own figures, published just last week, show that digital radio listening grew for the fourth quarter in a row, to over 100 million hours. The Digitial Radio Development Board reported strong sales in the pre-Christmas 2007 rush, and a forecasting that DAB sets will be in 30% of UK homes this year. Does that sound to you, like a platform that listeners don’t want? A platform that is showing that is showing consistent growth, both in sales and in listenership. That sounds like a platform that listeners want to me.

And they are equally downbeat on AM and their own Gold Network, which broadcasts on that platform.

“…AM is fast becoming obsolete for music radio given the low quality of its transmission and we do not believe that the next generation will want to tune into AM-quality radio. GCap Media has a network of 25 Gold stations which are also broadcast online, on DAB and on digital television. Our AM transmission contracts run until between 2012 and 2016 depending on the individual licences, which is why immediate exit from AM is not an option for GCap Media. We will be lobbying vociferously for AM switch off.”

They want to switch off 25 licences in major towns and cities around the UK because they believe AM is fast becoming obsolete? I’m sure BBC Local Radio, Virgin Radio, BBC Radio 5 Live, Talk Sport and others do not yet believe that AM is obsolete. In fact, the frequencies are being tested for a new form of transmission called Digital Radio Mondiale or DRM. Unlike DAB, which uses a differnet set of frequencies from analogue FM transmissions, DRM uses the same AM frequencies in the bands Long Wave, Medium Wave and Short Wave, to transmit digital signals, that according to those who have heard them are superb quality. There are many boradcasters across Europe who have been testing DRM transmissions, such as RTL,and the BBC from the old Plymouth MW frequency of 855 kHz. I fully espect that the BBC will broadcast services such as the BBC World Service on the new DRM platform. AM obsolete? No, not obsolete, it will just morph into a new digital platform.

On the Gold front, this excerpt from their press release is not too promising…

“…We also have one transitional brand – the Gold Network,. We have decided to scale back our investment in Gold to a level that will allow us to sustain an on-air product that remains attractive to our listeners, but which reflects that it is broadcast mainly on the declining AM medium.”

You see, there’s just one problem with that sentence. Gold is NOT attractive to listeners. In the last set of RAJARs, The Gold Network was down to just 1.2 million listeners. And as if that wasn’t enough, one of the worst performers in the network, Gold Plymouth, continued to decline from the 67,000 in the last days of Plymouth Sound AM, to just 13,000 6 months ago, to just 7,000 listeners today. If stats like that one do not reveal just how unattractive the Gold brand is to listeners, then what else could it say? Oh of course, what GCap says, that AM is an obsolete medium. Sometimes, it’s so pathetic to hear them not even admit the truth, that it just makes me sick.

And since AM is “declining” and they are “backing out” of DAB, I guess the Gold Network doesn’t have much of a future, does it?

I’d like to hear GCap just admit that they have basically given up on Radio. Because everything they say, everything they do, sounds and looks like defeatism. This is a group of stations that just looks like takeover fodder. I see the possibility of some venture capital group buying the comapny and selling off parts of it to other radio groups, whilst building a core collection of stations including Classic FM, Capital FM, Xfm London and a few others and turning those into hot commodities.

As for Digital One, well, now it has been freed from the corporate straight-jacket of GCap Media, who knows what might happen. BFBS, Classic FM, TalkSport and Virgin Radio could be the only stations on the mux for a while, or we could see a new wave of stations deciding that now is the time to join the DAB bandwagon, and become successful. Only time will tell if GCap’s attempts to basically kill off DAB Digital Radio will be successful, or whether someone else will make a success out of DAB. One thing is for certain, DAB is not Dead And Buried yet, but it will need vision and confidence to turn DAB back into a successful platform.