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Digital radio technology can double broadcast sector’s revenue in five years: ICEA-EY report

Radio stations will go up from less than 300 today to over 1,100 without additional spectrum.

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Mumbai: The adoption of digital radio technology will help the broadcast sector double its revenues within five years to Rs. 12,300 crore, according to a report prepared by the India Cellular and Electronics Association (ICEA) and EY.

The report shows that digital radio broadcasting can be extremely beneficial for all the stakeholders in the sector—broadcasters, listeners, advertisers, and regulators—and can help the FM radio segment boost revenues. This comes at a time when the FM radio segment has been struggling to generate robust revenues over the past few years.

It would lead to more advertising inventory to sell 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.

Another significant benefit of these technologies for broadcasters is that their transmitters use significantly less power than analogue radio transmitters.

India has also tested two technologies – HD radio and digital radio mondiale (DRM), for digital broadcasting in the FM band.

ICEA chairman Pankaj Mohindroo stated, "India is a heterogeneous market and provides audience segments with differing tastes as well as payment capabilities. 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 the areas of health, education, emergency, and weather, which by complementing data networks, decongests them. Communication usage with IOT devices is next envisaged in the pipeline too."

Citing the report, Mohindroo said, "Digital technologies would go a long way in widening the network of broadcast infrastructure in the country and the number of radio stations would grow multifold from the current numbers of less than 300 to over 1,100 without any additional spectrum."

EY India partner Ashish Pherwani said, "Digital radio can provide a much-needed boost to the Indian radio segment. As a free-to-air medium, radio plays a very vital role in India's informing and educating its people. Systemic issues around measurement, reach, operating models, competing products, and COVID-19 impacted the segment with failing revenues and shrinking opportunities. Digital radio can help grow the radio segment in India by 3x over 5 years, if implemented keeping in mind the requirements of various stakeholders and with the correct policy support."

According to the report, the number of channels will increase significantly from the perspective of listeners. Around 4x more channels are possible within the same frequency, which can provide more options to listeners. Furthermore, the technology is broadcast-centric, and consumers would not have to pay any data charges. Analogue transmission would also be enhanced as it provides a better listening experience than digital transmission across both audio quality and user interface.

Digital technologies would also bring about major reforms for the regulators as it would result in optimum use of scarce spectrum in the middle and long term and lead to increased taxes from increased revenues. It would also allow the authorities to use digital radio infrastructure for emergency warnings and traffic information.

The report prepared by ICEA and EY noted that a complete transition from analogue to digital radio infrastructure would take three to five years. Radio broadcasters cannot enable a switch-on-switch-off transition to digital radio as they are dependent on linear FM reach for their revenues. This would mean that analogue and digital broadcasting will need to exist in parallel till adequate reach is achieved.

Consequently, for some years, there would be no spectrum saving, said the report. The report has recommended innovation around cost-effective chipsets, antennas, and software to drive quicker adoption of digital radio. It has also been said that competing products using low bandwidth data and consensus on music royalties are issues that need to be addressed.

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