The adoption of digital radio technology can help the Indian radio broadcast sector double its revenues to Rs 123 billion in five years, riding on a robust mobile ecosystem, a new report showed on Thursday.
The country has so far tested two technologies — HD Radio and Digital Radio Mondiale (DRM) — for digital broadcasting in FM bands.
According to a report by the India Cellular and Electronics Association (ICEA) and EY, radio stations will go up from less than 300 today to over 1,100 without additional spectrum and mass adoption cannot happen without the support of a mobile ecosystem, IANS reported on the new research.
“Digital broadcast radio has the ability to cater to segments of entry-level smartphones and several hundred million feature phone users to receive enhanced services in areas of health, education, emergency and weather which by complementing data networks decongest them,” said Pankaj Mohindroo, Chairman, ICEA.
Digital radio broadcasting can be extremely beneficial for all the stakeholders in the sector — broadcasters, listeners, advertisers and the regulators — and can help the FM radio segment boost revenues, the ICEA-EY report pointed out.
“Digital radio can provide a much-needed boost to the Indian radio segment. It can help grow the radio segment in India by 3x over 5 years,” said Ashish Pherwani, Partner, EY LLP (India), in a statement.
Indianbroadcastingworld.com reviewed the report and found out that for the uptake of digital radio to happen, however, several things need to be done, including on the regulatory front. Some of the suggestions made in the report include the following:
# Approve digital radio rollout by all FM operators in a simulcast mode to protect ad revenues enabled within the existing spectrum mandate.
# Bundle digital radio with other proposed technologies (for example, digital video broadcast) to optimize costs and reduce the capex burden.
# Permit sharing of infrastructure costs between All India Radio and private FM companies to reduce the capex burden.
# A formal policy mandating automobiles/mobile phone manufacturers to include the required hardware in devices is also required
# From the technology point of view, the report suggests bringing the incremental cost of chipsets and antennas to a reasonable level so that the all-important mobile phone ecosystem comes into play at scale.
# On the implementation front parallel rollout could be advised along with linear FM for a few years till scale is achieved.
# Enable existing linear companies to transmit on digital frequencies without additional license fees in the short term to build the consumer base.
# Government continues to earn license fees for the frequencies auctioned.
# Additional ad inventory sales will earn additional license fees and taxes for the government.
# Permit new players to bid for additional or not utilized frequencies to support the transition to digital, but in a manner that is not detrimental to the interests of the existing licensees.
Moves to promote digital radio broadcasting would, according to the report, lead to more advertising inventory to be sold by companies with the ability to charge higher rates based on segmented audiences. “Given that the digital radio system can provide listenership data, broadcasters can build trust and eventually grow revenues,” the report added.
While globally, according to the ICEA report, 1.4 billion people can access digital radio services, in India presently digital radio is only available for three hours per day across a few cities using DRM technology and that too the broadcast is done by pubcaster AIR with no private radio company involved in digital broadcasting.
Though digital radio had been introduced in India 10 years back, it has been languishing due to lack of regulatory clarity. For example, the report stated, digital AM has been impacted by a lack of consumer receivers, no clear and affordable product roadmap or mobile phone integration.
HD radio has been tested and evaluated for the FM band in the cities of Delhi and Jaipur, while DRM radio has been evaluated and tested for AM band in Dhanbad in 2007 and for the FM band in Delhi and Jaipur.
HD radio and DRM+ FM trials have been completed in New Delhi and Jaipur in 2021 and a report has been submitted by Prasar Bharti to the Ministry of Information and Broadcasting, but the government has not rolled out any policy mandating digital radio adoption, the ICEA-EY report pointed out.
The global market size for DAB was valued at $83.61 million in 2020 and is projected to reach $254.77 million in 2028, growing at a CAGR of 14.95 percent from 2021 to 2028.
DAB is a digital radio broadcasting system that, through the application of multiplexing and compression, combines multiple audio streams onto a relatively narrow band centred on a single broadcast frequency called a DAB ensemble.