DAB+ as a systemic innovation: Stakeholder interests and the introduction of digital radio

Abstract

Radio is on the brink of a digital wave brought about by the introduction of digital audio broadcasting (DAB+). Despite market success in a few European countries, there remains little evidence of industry support and consumer demand. By means of a stakeholder analysis, the article identifies the main stakeholders in the implementation of digital radio in the region of Flanders, to recognise tensions between public and private interests and to discuss possible government policies aimed at promoting the standard among all stakeholders. By seeing DAB+ as a systemic innovation, it offers a structural approach to address the ongoing dynamics of the organisational and institutional system around DAB+ and other media distribution technologies in other European markets (or beyond).

Keywords

Digital radio Flanders innovation media infrastructure media policy

Introduction

Unlike other branches of the media industry that are undergoing rapid digital transformation, radio broadcasting remains largely an analogue island in a sea flooded by digital platforms. Mobile apps, music streaming and Internet radio aggregators are raising popularity among young media consumers, yet traditional radio broadcasting networks continue to command the bulk of listening time. About 85% of total listening time in Europe is still on traditional broadcasting networks, where the total number of stations is rather limited because of spectrum scarcity, whereas Internet radio (web and/or apps), giving access to thousands of available stations, accounts for about 10% of total listening time (European Broadcasting Union (EBU), 2018a). These data support the thesis of Oliveira etal. (2014) claiming that radio is a resilient medium. Radio’s position as a means of simultaneous communication with large and unseen audiences has been challenged by newer media indeed but maintained by consistently embracing new technology that deepened radio stations’ engagement with listeners and provided opportunities to reach new audiences (p. iii).

Despite radio transmission and reception remaining overwhelmingly analogue, radio broadcasting may well be on the brink of a digital wave brought about by the introduction of digital audio broadcasting (DAB+). DAB+ is a digital standard used for the terrestrial distribution of radio signals and is supposed to replace the analogue frequency modulation (FM) standard. A full overview of the presumed advantages of DAB+ goes beyond the scope of this article, but literature describes how DAB+ emerged as a technologically superior successor of FM (see Hoeg and Lauterbach, 2009; Lax, 2017; O’Neill, 2009). In brief, DAB+ is said to offer prospects of wider choice of radio stations, improved reception and sound quality for listeners, lower distribution costs for radio broadcasters and lower energy consumption for multiplex operators. Digital radio in the form of the original DAB standard was developed in the late 1980s and has been seeking mass market adoption since. By 2005, it had become clear that DAB was considered to be inefficient and outdated (Ala-Fossi, 2010). Nevertheless, pressure from industry lobbying to upgrade the system led to multiple European countries to implement the DAB+ as the newer standard for digital radio and to set milestones for switching off FM transmissions. But, despite a few countries (among others Norway, Denmark and Switzerland) where DAB+ is performing relatively well, most European markets show little evidence of industry support and consumer demand for a technology that has been on the market for about 20 years (EBU, 2018b, 2019).

This article sees DAB+ as a systemic innovation which necessitates the involvement of both the demand and supply-side of radio broadcasting. Collaboration between and coordination of all stakeholders in the value chain is therefore seen as a prerequisite for a successful implementation of the new distribution standard (EBU, 2014). Since the introduction of DAB+ means a significant reorganisation of the radio broadcasting value chain (see O’Neill and Shaw, 2010), its success crucially depends on the alignment of public and private interests and the willingness of all main stakeholders to support the technology. However, as Halbert (2015) states, the success of a new standard for digital radio broadcasting is a ‘complex negotiation system’ in which multiple factors come together and shape the outcome of the technology (p. 215). Radio broadcasters may be reluctant to invest in new transmission facilities because of a lack of a sizable audience, which makes it hard to sell advertising. Similarly, automobiles manufacturers may be reluctant to include DAB+ as standard radio receivers in the car as long as there is no substantial demand for such receivers. All this even reinforces consumers’ reluctance to purchase a new digital receiver, eventually leading to a chicken-and-egg problem. In response, government policy may unveil a digital switchover plan to overcome problems related to power inequalities in the chain and to ensure a smooth transition from analogue to digital radio. The goal of this article is, therefore, to identify the main stakeholders in the DAB+ implementation process, to recognise tensions between public and private interests and to discuss possible government policies aimed at promoting the standard among all stakeholders.

The context of this research is Belgium’s Dutch-speaking region of Flanders, where government presented its Digital Radio Plan in 2016 and multiplex operator Norkring launched a commercial DAB+ offering in 2018. However, scepticism about the potential economic success of the standard as well as a commercial dispute between the main stakeholders hampered industry support and led to slower than anticipated market development. Together with FM radio’s popularity (over 80% daily reach of population), which increases concerns that the anticipated switch-off date of 2022 is highly unrealistic, as well as the quick uptake of competing Internet platforms for audio consumption, conflicting interests between multiplex operator Norkring, public service broadcaster VRT and leading commercial broadcaster Medialaan prompt us to examine critically the momentum and future success of DAB+. By considering DAB+ a systemic innovation, the article reveals how the critical interplay between the different stakeholders in the radio broadcasting industry in Flanders has hampered the introduction of DAB+. The institutional context of Flanders may be specific, yet the problems regarding the implementation of DAB+ are relatively comparable with other European markets and necessitate further academic scrutiny. For this sake, the article offers a structural approach to examine the ongoing dynamics of the organisational and institutional systems around DAB+ and other media distribution technologies in other European markets (or beyond), which might prove valuable for similar research undertakings.

Although the study is limited to its empirical context, the article aims to contribute theoretically to a more general understanding of how digital radio distribution technology can be introduced in national media markets and how government policies can shape the outcome of this process. In contrast to the massive focus on the global switch to digital television, the transition from analogue to digital radio remains understudied in media and communications literature. Recalling Pease and Dennis (1995), radio remains ‘the forgotten medium’ as scholars, analysts and journalists tend to overlook radio’s influential role in the media industries (see Dubber, 2014). Moreover, this article responds to a renewed call for critical research that addresses the logics of media distribution infrastructures and that explores the relationship between technology, government, industries and audiences. Most scholarly emphasis is on ‘platforms’ as the underlying (infra)structure of digital media, yet the presence of physical distribution infrastructure remains critical for and its ownership reflects power structures in the media and communication industries (see Halbert, 2015; Jauert etal., 2017).

DAB+ as a systemic innovation

The technical and organisational design of DAB+ is very different from that of traditional FM broadcasting systems, and its introduction demands a change of the entire radio broadcasting industry. The digitisation of radio involves more than simply upgrading the distribution system, but necessitates a significant modification of the value chain. On the distribution side, multiplex operators enter the value chain as new middlemen, responsible for building, maintaining and upgrading the technical infrastructure (transmitters), guaranteeing regional/national coverage and grouping the channels into multiplexes (mux) (Hoeg and Lauterbach, 2009). In contrast to FM where individual stations organise their own transmission, DAB+ introduces separate functions of programme provider, data service provider and multiplex operator. One DAB+ mux typically carries services from 8 to 12 radio broadcasters, who need to enter into commercial agreement with a multiplex operator to secure distribution. Unequal bargaining power in the value chain increases risks of certain broadcasters who are left with no distribution contract. Jauert etal. (2017, p. 19) warn that such gatekeeper model for administrating multiplexes may cause competition concerns (e.g. discriminatory treatments and pricing) and suggest such a model may favour commercial needs over audience-driven interests. On the reception side, DAB+ requires digital equipment so that listeners need to replace FM receivers by digital receivers if they want to continue to listen to their favourite stations. Since radio consumption in the car is high, the availability and uptake of in-car receivers is paramount to the success of DAB+. Automobile manufacturers would thus need to include DAB+ receivers as an option and preferably as standard in their models.

The situation described above implies that rather than a technological innovation, DAB+ should be considered a systemic innovation, which requires not just focussing on the technology itself, but on understanding the (lack of) dynamics of the organisational and institutional system around DAB+. Systemic innovation comprises interrelated technological, organisational and institutional adaptations as well as changes in human behaviours and practices (Maula etal., 2006). The success of technological systems is shaped by a dynamic network of stakeholders interacting in a specific industrial area under a particular institutional framework that is involved in the generation, diffusion and acceptance of that technology (Carlsson and Stankiewicz, 1991). However, change and innovation in complex systems is often difficult to accomplish and time-consuming due to the many stakeholders and opposing interests involved. Government policy is justified so as to coordinate the introduction of a systemic innovation and develop a shared collaborative project among all key stakeholders. Innovation-specific policies may reduce the financial risks and regulatory uncertainties associated with the implementation of the technology (Wieczorek and Hekkert, 2012). However, the role of government is not only limited to that of a market fixer when innovation systems fail to deliver positive effects but also to a market maker when public actors become responsible for actively shaping systems and creating relationships of trust between the stakeholders (Mazzucato, 2013). A critical challenge for public actors lies in dealing with the difficulty of seeing the horizon of the future policy environment and the ability to properly anticipate and plan in the present. Since the success of a technology is hard to predict and its potential often overestimated, it is paramount that governments keep outside options and develop flexibility so as to avoid ‘policy myopia’ which can lead to ‘government failure’ when mass adoption of the technology ultimately fails (Nair and Howlett, 2017). An active role of government is particularly important in case commercial and public interests are out of balance.

(Lack of) balance of interests

The introduction of DAB/DAB+ has been widely criticised for serving national and European interests but not necessarily those of the entire radio broadcasting industry. As O’Neill and Shaw (2010: 39) claim, its development was not driven by the quest to find the most innovative neutral solution, but by a need to serve the needs of the status quo: Digital radio was said to foster the needs of national public service broadcasters that dominated the industry before the introduction of commercial radio. At the end of the 1990s and again in the late 2000s, public service organisations were thought to act as a driving force for innovation in the radio industry and were used as the ‘DAB locomotive’ (Jauert etal., 2010: 106). However, the prominent role of public service broadcasters could not prevent market failure as commercial broadcasters were initially reluctant to embrace the standard. Most stations saw little return on investment and were reluctant to increase expenses for digital-only channels without any prospect for additional revenues: Simulcasting (i.e. simultaneous transmission via FM and DAB/DAB+) would almost double the transmission costs (Bonet etal., 2009). However, some broadcasters saw potential for an increase in the actual number of commercial stations, which offered further scope for expanding their channel portfolio and extending their brand. At their turn, community and small-scale stations have widespread concerns about the high transition costs for going digital, which raises questions about the financial sustainability of DAB/DAB+. Moreover, local stations are less suited to DAB/DAB+, which were designed to cater for nationwide coverage (Evens and Paulussen, 2012). It is thus fair to conclude that neither commercial nor community broadcasters were very eager to adopt DAB/DAB+ as the new radio transmission standard.

Governments have been pushing DAB/DAB+ to the market while favouring the interests of the industry over the public interest. Indeed, the social need of the technology has been questioned in literature (Anderson, 2013). Since the launch of DAB/DAB+, too much emphasis has been put on its presumed technological benefits rather than on consumer benefits. According to Lax (2017), there was a major difference between how technical staff understand radio and how listeners use and appreciate it. Rarely has there been a direct reference to the listeners’ perspective; all too often the focus was on ‘technical solutions for non-existing problems’ (p. 39). The idea of relative advantage is key to understanding the weak consumer adoption of the new radio standard (Halbert, 2015). While marketing campaigns focused on DAB/DAB+’s technical superiority over FM, improved sound quality and clear reception were not a decisive factor for listeners. Although these campaigns certainly increased consumer awareness, promotional airtime has not had a substantial persuasive effect on consumer demand (yet). Rather than the (contested) technical superiority, new and digital-only channels are generating interest in and driving sales of digital receivers. Albeit that broadcasters are operating digital-only channels, the question is whether these additional channels are worth having to the consumer. In most cases, these digital-only channels are nothing more than non-stop music offerings that hardly provide extra value to streaming or podcasts. As consumer interest remains low, adoption of digital receivers goes slow which is creating lack of sizable audience. This in turn discourages further commitment from radio broadcasters (Halbert, 2015).

The total lack of coordination among all stakeholders in the value chain and the lack of synergies with other related industries such as automobiles and consumer electronics retail induced policymakers to address the failing market for DAB+ (Bonet, 2017). The establishment of a working group, such as Digital Radio UK, that promotes digital radio to the public and acts as the interface between listeners and the industry has proved to be highly effective to drive the digitisation of the radio industry (Lax, 2014). Such representative body can overcome waning industry support and bring all key stakeholders, including representatives of listener groups, on board. Policies can provide appropriate incentives to stakeholders that are dependent on regulatory conditions. Commercial broadcasters, who may block DAB+ as a mechanism to avoid extra competition from new digital channels, can be incentivised by the prospect of deregulation (in terms of ownership structure or local content requirements) or a reduction of licence fees. They can also be encouraged by automatic renewal of analogue licences when they would start to broadcast digitally. However, the question is whether broadcasters are then seeing real value in offering services via DAB+ or are just blinded by the direct financial advantages associated with keeping their licence. Since simulcasting implies an increase in transmission costs, broadcasters advocate a quick FM switch-off. Governments need to plan the switchover process carefully by setting realistic milestones to be achieved and decide whether FM will be remained or abandoned in the post-switch-off period. Instead of letting the market decide, a clear choice for technical standards in consumer electronics, such as mandatory digital receivers in cars, is said to spur adoption and make available a wide range of reasonably priced receivers (EBU, 2018b).

Methodology

In order to map the complexity of opposing interests regarding DAB+ in the value chain, this article relies on 16 expert interviews conducted with representatives of public and private stakeholders involved in the introduction of DAB+ in Flanders. The sample includes representatives of all main segments of the radio broadcasting chain, ranging from broadcasters, multiplex operator, automobile manufacturers and consumer electronics, and attempts to represent a variety of perspectives on DAB+:

Public service broadcaster VRT accounts for approximately 64% of listening share and was assigned to support a sector-driven transition from FM to DAB+;

Nationwide commercial broadcasters Medialaan (DPG Media) and Mediahuis represent approximately 20.5% and 6% of listening share, respectively, and are must-have stations;

Regional commercial broadcaster Top Radio has a market share of 0.86% and was one of the first commercial broadcasters to go digital;

Local broadcasters hit fm and MIG were selected to examine local radio’s difficulties of accessing DAB+ frequencies;

Multiplex operator Norkring is the sole owner of DAB+ licences and operates the DAB+ network;

Automobile federation Febiac represents the car manufacturers, whose uptake of in-car receivers is crucial to the success of DAB+;

Consumer electronics companies Pioneer and Philips provide digital receivers to retailers and car manufacturers.

In addition, governmental institutions Department for Culture, Youth and Media and the SARC Media Council; umbrella organisations European Broadcasting Union (EBU) and Medianet Vlaanderen; consumer organisation Test Aankoop; and research company GfK were consulted for their expert opinion and background insights. In general, the sample reflects the organisational and institutional system around DAB+ in Flanders. Experts were selected based on convenience (personal contacts) and snowball sampling.

Expert interviews are a widely used method to gain access to specific knowledge, yet the results need to be handled carefully. Expert knowledge is not neutral since experts are part of the societal debate and may have the ability to shape the outcome of this debate. Experts might subjectively interpret or even strategically ignore developments, and may be biased in favour of the organisation (interest) they represent. It is therefore critical to not only identify issues that were addressed but also examine those perspectives experts tried to neglect or silence. In addition, the study benefitted from confidential information that was given ‘off-the-record’ (i.e. not upon quotation) but that helped to deepen our understanding of certain issues at play. Moreover, some stakeholders only participated in the research on the condition the statements would not be attributed to them.

Case study: DAB+ in Flanders

Context and history

Digital radio has been operated in Flanders since 1997, when public service broadcaster VRT launched the first DAB multiplex (12A). The multiplex covered the entire region of Flanders (Brussels included) and provided eight radio services: five simulcasts of FM stations and three digital-only channels (two with non-stop music, one with a news loop). With this, VRT attempted to create an attractive offer that would be convincing enough for consumers to purchase a digital receiver. Although the network signals covered about 99% of the territory, DAB became a failure due to the unavailability of a wide range of digital receivers, both in retail stores and cars (the number of receivers sold was estimated at around 50,000), and the absence of commercial channels Qmusic and 4FM. The latter denounced VRT’s double role both as content provider and multiplex operator, and refused to use a network controlled by the public service broadcaster to distribute their radio programmes. Moreover, lack of a licencing framework for digital radio created regulatory uncertainty towards the commercial broadcasters, who expressed interest in controlling a multiplex themselves.

The Flemish government responded to this call with, first, the development of a regulatory framework regarding the allocation of digital radio spectrum; second, the separation of the VRT’s transmitter infrastructure into an independent legal entity; and third, the licencing of the multiplexes. In 2008, the government released frequency block 11A that would be reserved for the launch of one national, commercial multiplex and that would be licenced based on a comparative evaluation process (or ‘beauty contest’). In addition, the VRT’s transmitter infrastructure was separated into an independent legal entity. Norkring, a subsidiary of Norwegian telecom operator Telenor and leading distributor of terrestrial broadcasting services, initially purchased a 49% share of the entity for €9.8 million (and currently owns 75% of the shares, the remaining part resides with the government). The privatisation of the infrastructure and the involvement of a neutral operator aimed to disentangle VRT’s double role and establish a level-playing field between VRT and commercial broadcasters: A neutral operator would avoid conflicts of interests between the different stakeholders in the value chain. In 2009, the licences to multiplexes 10 (digital television) and 11A (digital radio) were granted to Norkring for 15 years. Instead of licencing particular broadcasters, a wholesale model was preferred: Rather than selling services to an audience, Norkring charges broadcasters for transmission to the public. Such a model would allow a multiplex operator to optimise the level of service to its various customers and allocate spectrum the most efficiently. It also guarantees radio broadcasting would remain a free service to the audience.

However, it would take until May 2016, when the government approved a Digital Radio Plan to reform FM frequencies and support a switch to all-digital radio, before DAB+ appears on the policy agenda. Government approved automatic renewal of FM licences for the major commercial broadcasters, alongside an obligation to invest in DAB+. It also decided that FM would be switched off 2 years after digital reaching 50% listening share, expected by the year 2022 (or 2024 the latest). In addition, a Digital Radio steering group was established consisting of public service broadcaster VRT, main commercial broadcasters Medialaan (Qmusic and Joe) and Mediahuis (Nostalgie and NRJ), multiplex operator Norkring, and the government. A memorandum of understanding was signed, with the aforementioned stakeholders committing themselves to cooperate on marketing and communication and make agreements with the automobile industry and retail sector. The overall goal is to support the further development of DAB+ and formulate a coordinated plan for radio’s digital future. As part of this agreement, in November 2018, government supported a Digital Radio Week to promote the benefits of digital radio to the public. Moreover, a government-commissioned research revealed that the 25% of the population was aware of DAB+ and that 8% had listened to it recently (compared to 33% via Internet and 81% via FM). DAB+ accounted for 3% of total listening time (compared to 12% Internet and 76% FM) (Ipsos, 2018). Late 2018, Norkring was awarded a licence of a final multiplex 5A/5D, providing digital capacity to another 13 radio stations.

Stakeholders and interests

Despite being licenced already in 2008, it took Norkring about 10 years to launch a commercial DAB+ offering. This slow progress of DAB+ mirrors the complexity of opposing stakeholder interests that thwarted an efficient coordination of the radio broadcasting value chain and that were hard to reconcile by government intervention. The introduction of DAB+ in Flanders was highly contested by the main private stakeholders, who showed little enthusiasm to abandon FM and to face additional competition by going digital. The obvious hurdle was the traditional chicken-and-egg problem, which refers to a multi-party coordination and requires simultaneous commitment from all stakeholders. The involvement of VRT was an essential prerequisite for digital radio’s success. As stipulated in the renewed management contract with the Flemish government (2016–2020), VRT was asked ‘to support a sector-driven transition from FM to DAB+’. VRT also advocates that not only its own presence, but a wider availability of stations, more in particular those operated by leading commercial broadcaster Medialaan, was paramount to the success of DAB+:

We were actually seeking for a coalition of the willing. Although VRT accepted that the government wanted us to lead this process, the successful transition in Norway taught us all broadcasters have to collaborate to make DAB+ a success. We believe all broadcasters have to agree on the technology, but to compete on content.

However, Medialaan’s enthusiasm to broadcast via DAB+ was limited since they had little belief in the economic potential of the technology. The broadcaster was hardly interested in DAB+ as long as there would be no substantial group of listeners with a DAB+ tuner and tried to postpone its decision to adopt the technology until there would be a profitable business case for it. The commercial broadcaster was concerned about the substantial costs related to simulcasting via FM and DAB+ and therefore preferred to wait until consumer demand was proven.

One of our main concerns is a double distribution cost because we multicast our radio stations. Since digital uptake remains limited, we have to pay two bills: one for distribution via FM and one for distribution via DAB+. The optimal scenario is a quick FM switch-off in the near future since distribution via DAB+ is much cheaper than distribution via FM. For this reason, we prefer to go digital-only as soon as listener demand allows us to do. That’s why we will also increase our promotion efforts.

Whereas FM secured reach and market share, the lack of a sizable audience on DAB+ was expected to produce a negative impact on its advertising revenue. Similarly, Medialaan fears that the availability of more radio stations would ‘lead to too much fragmentation of audience share with advertising spending having to be divided among more broadcasters in order to reach a similar share of listening. This will put pressure on advertising prices’. Another commercial broadcaster states that at this moment ‘media agencies and advertisers certainly do not believe in DAB+ […] But we firmly believe that digital-only channels may address specific audience needs and will drive growth of the radio advertising market’.

As much as Medialaan was concerned about the prospects of a more competitive advertising market, the crucial reason for not going digital were its concerns about Norkring’s position as sole multiplex operator – the notorious elephant in the room during the interviews. Since Norkring controls all commercial DAB+ muxes, it operates as a monopolistic gatekeeper; a position from which it can ultimately decide on the conditions for carriage. Norkring responds,

The government selected us as the network operator based on an open procedure. We do not see our position as a monopoly. We believe we are a neutral operator willing to develop an innovative market and deliver a distribution service to radio broadcasters. We provide a neutral platform at a standard price. […] Carriage of more channels has brought our prices down. I believe we now charge a competitive price.

However, several stakeholders protest against this monopoly, which produces pricing power and may be counterproductive in the long term:

Especially in the beginning of its operations, Norkring behaved in a monopolistic way charging excessive prices. This has changed now, but the situation of Norkring being the sole entry point for stations that want to broadcast digitally remains risky. More competition in the distribution market would be more than welcome.

Qmusic and Joe are must-have channels for Norkring’s DAB+ offering – a hard-to-get position the commercial broadcaster took benefit of during the negotiations. As soon as the negotiations between Norkring and Medialaan about distribution had become in an impasse and it had become clear neither of the parties would change their position, government intervened to fix this market failure. Hence, its Digital Radio Plan stipulated that nationwide commercial stations would be awarded an automatic renewal of analogue licences provided that they would broadcast digitally by September 2018 the latest. A similar obligation was put on newly awarded commercial stations, except for the local stations. One broadcaster admits,

Let’s be honest. We broadcast via DAB+ because policymakers obliged us to be on that platform, not because we believe in the technology.

Lack of competitive dynamics in the infrastructure market, however, created the somehow inappropriate situation that the government mandated channels to broadcast via DAB+, who, therefore, had to negotiate with a monopolistic operator. Medialaan eventually launched Qmusic and Joe on DAB+ in September 2017 and obtained extra capacity for seven additional non-stop music channels, which are also available online (website and app). This allows the broadcaster to expand the number of stations, which was impossible in the saturated FM market, and to reach new commercial target groups. Other stakeholders see herein a grand design to reproduce current power structures. In this context, the transition to DAB+ is criticised by many for being ‘driven not by a future vision, but by a political agenda to serve and protect the interests of the existing broadcasting duopoly. For sure, the lobby efforts of the big media groups paid off well’.

The introduction of DAB+ was also assessed critically by local radio stations, whom policymakers have been historically treating as the Cinderella. The sector, which represents about 8% of listening share, is concerned about the high transition costs for going digital, which makes such a transition unlikely. A few local stations eager for national coverage were able to negotiate a deal with Norkring, but had to stop transmissions soon because financial return was almost non-existent. Unlike smaller commercial broadcasters, local stations have little bargaining power to negotiate favourable conditions with Norkring. Most have no interest in nationwide DAB+ allotments, but see opportunities when ‘national multiplex 5A/5D would be reorganised into regional clusters’, a policy option that has hardly been explored.

We are interested in broadcasting via DAB+, but not as long as Norkring continues to treat us as national broadcasters. Norkring is clearly not interested in including local stations in its ensemble. […] We fear there will be just no place left for local stations in the digital era.

This is due to the fact that Norkring is granting access on a first come, first served basis, which induces the main broadcasters to introduce new digital-only channels to preserve their market position. As a result, local broadcasters are left with no spectrum, unable to broadcast digitally provided they were capable of paying for (national) distribution. By prioritising commercial needs over public interests, it can be questioned whether such a gatekeeper, using a spectrum as a scarce public resource, produces the best possible outcome for society. Since an operator may deny small-scale radio stations in favour of more popular ones, it is suggested must-carry regulations could be imposed to transmit at least one non-commercial station in each service area. Furthermore, some stakeholders question whether government should preserve fair and reasonable terms of access to digital spectrum and impose wholesale tariffs on multiplex operators.

Whereas some stakeholders argue government intervention has remained largely insufficient to fix the market, others rather contest the government’s active role in making the market. Most commercial broadcasters believe that 5G rather than DAB+ will be the future distribution infrastructure for digital radio and question whether the government really had to impose a new standard for digital radio instead of letting the market decide on technology. The government’s neutrality was questioned by many stakeholders, especially because it owns 25% of shares in Norkring. One broadcaster states,

Government has to incentivise free and fair competition and create the optimal conditions in which media organisations operate. When government decides on technology, things usually go wrong. Government has picked a technology which has not proven its long-term sustainability yet, and which is expected to be overtaken by more advanced streaming protocols.

The involvement of the automobile industry (listening to the radio accounts for about 50% of total listening time) and retail sector (wide availability of reasonably priced receivers) is critical to the success of DAB+. Nevertheless, both branches hardly identify substantial consumer demand. Hence, they remain reluctant to lead the introduction of DAB+ and rather see themselves as a follower:

We tend to follow what the consumer wants. As much as Norkring wants us to lead and shape the market, we continue to integrate FM receivers as long as listeners prefer FM.

The automobile and electronics industries demand clarity in a possible switch-off date and favour a brief period of simulcasting. Most stakeholders agree that all will be fully engaged to make the transition to DAB+ a success once the government decides on a fixed, yet realistic switch-off date. In this context, they welcome the decision that, as part of the European Electronic Communications Code (EECC), new cars will have to be equipped with a digital radio receiver by end of 2020:

In-car reception is extremely important for the success of DAB+. If government would oblige digital receiver in cars, then 50% of all cars would be equipped within 4–5 years. And if this would occur on a European level, then scale will come into play and tuner prices will fall dramatically.

Discussion

This article presented the results of a stakeholder analysis and discussed the introduction of DAB+ in the region of Flanders. This process has been described as a complex negotiation system in which conflicting interests between multiplex operator and radio broadcasters combined with a genuine lack of consumer interest in the technology thwarted a smooth transition from FM to DAB+. In an attempt to fix the market, the government was able to bring crucial stakeholders together with the aim to assure a performing network (coverage), value-added programming (content), availability of digital receivers (consumer electronics), involvement of the automobile industry (cars) and promotion to the public (communication). With its Digital Radio Plan, the government acknowledged that rather than a technological innovation, DAB+ had to be considered a systemic innovation and that coordination of all stakeholders in the value chain was needed to develop a joint vision on the future distribution of radio programming. The establishment of a steering group, the role of the VRT as a locomotive, the automatic renewal of analogue licences, the anticipated switch-off and the organisation of a Digital Radio Week should be evaluated in light of this goal.

Despite these attempts, however, DAB+’s bright future is not guaranteed. Not only do our results show that several stakeholders in Flanders show little enthusiasm in supporting the digital standard, further studies indicate that consumers see hardly any added value in a technology that has already been implemented, unsuccessfully though, since the late 1990s. The question raises to what extent the implementation of DAB+ as the new standard for radio broadcasting in Europe should be seen as a top-down, technology-led process rather than an evolution demanded and supported by the audience. Whereas the adoption of DAB+ is increasing slowly, despite being aggressively promoted in some countries, the popularity of Internet radio is growing rapidly, with online streaming, podcasting and personal audio devices challenging the status quo of the radio industry while representing a real centre of innovation and creativity.

Since alternative platforms are likely to further challenge the sustainability of DAB+ as the primary radio distribution infrastructure, government intervention to stimulate the DAB+ market was repeatedly criticised by stakeholders. By lack of consumer demand, the development of DAB+ was predominantly pushed by lobbying organisations, advancing the interests of the infrastructure and (parts of the) broadcasting industries. One, therefore, questions if we could speak here of regulatory capture, which occurs when in the policy process the commercial interests are prioritised over the public interests, and which could turn out to be counterproductive, both for the industry and audience. A single focus on DAB+, promoting it as being superior to FM, may eventually produce policy myopia and does little to address the structural transformation of the radio broadcasting industry. Although heavily contested, it becomes realistic to believe that the Internet rather than DAB+ is challenging FM as the primary distribution infrastructure, and that DAB+ will remain in place only until the 5G mobile standard will have emerged as a global platform for content and connectivity somewhere by 2025. Hence, there is a real challenge for policymakers to anticipate these evolutions accurately and develop future-proof, platform-neutral regulation instead of prioritising one standard to another.

Historical experiences in the implementation of digital radio in Europe show a great variety of country-specific combinations of the types of policies being developed, which makes it hard to ‘transfer’ success recipes. Success of DAB+ in one country (e.g. Norway or Switzerland) does not automatically produce success in another market, and heavily depends on cultural, economic and political conditions that are specific to each separate market. Detailed overviews of national radio markets (such as EBU, 2018b) may help policymakers to learn from best practices and develop future-oriented plans for smooth digital transition. Yet much scholarly work needs to be done in order to understand the underlying factors of change and continuity in the European radio markets, especially in a comparative manner. As mentioned in the introductory section, research in radio remains relatively limited, especially when it focuses on objects that demand in-depth insights into industrial and political developments together with a more advanced level of technical knowledge. Research in the underlying dynamics of media distribution and infrastructure would clearly benefit from a more holistic and interdisciplinary perspective that takes into account a wider institutionalist context.

The approach of systemic innovation used in this article might prove useful here as it provides an original framework to address structural conditions in which the digitisation of radio takes place. All too often media objects are researched in isolation from the ecology in which they are produced, circulated and consumed, which is leading to one-sided analyses or oversimplified conclusions. Evaluating the adoption of digital radio receivers cannot adequately happen without a critical analysis of the surrounding institutional context which shapes the conditions in which consumers decide to purchase a technological artefact. Neither can one look at the structure of media markets without examining the history and specificities of media policymaking which have affected, at least in part, the performance of today’s media industries. Future research could therefore address the interplay between technological, organisational and institutional systems as well as drivers of media consumption to produce a more holistic understanding of the relationship between media institutions, technologies, markets and society. An analytical framework considering media technology as systemic innovations may provide a valuable contribution to this.

Footnotes

Acknowledgements

The author would like to thank Rani Huttener and Joran Van Daele for their invaluable work related to the collection and analysis of the interview data.

Funding

The author(s) received no financial support for the research, authorship and/or publication of this article.

ORCID iD

Tom Evens

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