DAB digital radio – a platform for Europe Patrick Hannon Kraków, 6 October 2016

1 International association Promote digital radio (DAB / DAB+) around the world 95 members from 27 countries - from all parts of radio ecosystem WorldDAB – who we are

2 UK Norway Sweden Germany France Spain Italy CH NL Bel DK Poland Czech Austria Ireland Portugal Slovenia Hungary Slovakia A digital radio wave is moving across Europe

3 UK Norway Sweden Germany France Spain Italy CH NL Bel DK Poland Czech Austria Ireland Portugal Slovenia Hungary Established markets Slovakia First four markets: UK, Norway, Denmark and Switzerland

4 UK Sweden Germany France Spain Italy CH NL Bel DK Poland Czech Austria Ireland Portugal Slovenia Hungary Norway Slovakia Followed by Germany (2011), Netherlands (2013), Italy (2014) Second wave

5 UK Sweden France Spain Italy CH NL Bel DK Poland Czech Austria Ireland Portugal Hungary Germany Norway Slovenia Slovakia Third wave: France, Belgium, Poland and Slovenia France: Paris, Nice, Marseille launched 2014 Belgium: DAB+ on air 2015; federal launch 2018 On the move Slovenia launched September 2016

6 UK Sweden France Spain Italy CH NL Bel DK Poland Czech Austria Ireland Portugal Germany Norway Hungary Slovenia Slovakia Trials: in Austria, Czech Republic, Slovakia and Hungary Trials

7 UK Sweden France Spain Italy NL Bel DK Poland Czech Austria Ireland Portugal Slovakia Germany Norway Hungary Slovenia Digital Switchover CH First countries moving to Digital Switchover (DSO) Norway: 2017 Switzerland:

8 Norway and Switzerland – Digital Switchover (DSO) Norway: Five national stations on FM; 25 on DAB+ DAB+ coverage is greater than FM Digital Switchover starts January 2017 – completes December 2017 All national and large local FM services will be switched off Public service stations switch first – followed after ~3 months by private broadcasters Switzerland: DAB+ coverage – 99%; 53% of listening is digital : major marketing campaign Public funding pays private broadcasters for part of simulcast costs until 2019 DSO starts in 2020; finishes by 2024

9 UK and Germany: two largest DAB markets UK: criteria for potential DSO decision expected to be achieved in DAB coverage of 97% -50% of listening digital Digital Radio UK (public / private broadcaster alliance*) plays key role in marketing to consumers, retailers and car makers Strong political support from Federal Government and Länder ARD has published roadmap to DSO; Government now consulting Have established Digitalradio Büro Deutschland (similar to DRUK) Authorities asking EU to mandate that new radio receivers* have FM and digital capability * Membership includes BBC, private broadcasters, Arqiva (network operator) – plus associate members Tech UK and SMMT (automotive association)

10 Netherlands is next in line; France is starting to move France: 2015: CSA (regulator) publishes timetable for national roll-out -Lille, Lyon, Strasbourg due on air: Radio France now on air in Paris French receiver law: when 20% of population covered by DAB+, receivers* must have digital capability NL: launched in 2013 with strong collaboration between Government and broadcasters (regulation, coverage planning and marketing) In 2015, Government asked EU to mandate that new radio receivers* have FM and digital capability * Automotive and consumer devices

11 Nearly 50 million DAB radios have been sold Global DAB receiver sales (domestic & automotive), cumulative, m Source: Industry bodies, WorldDAB analysis Prices from €15

12 In advanced markets, most new cars have DAB as standard % of new cars with DAB+ digital radio Source: Digitalradio Norge, SMMT / CAP, MCDT 78%70% UKNorwaySwitzerland Technology is tried and tested 85%

13 European Digital Radio Alliance established March 2016 Countries where members 1 are broadcasting PolandAustria Belgium Sweden (1) Public and private broadcasters Norway Switzerland UKGermany DenmarkNetherlands CzechSlovakia Italy

14 Lessons learnt

15 Key messages DAB+ is core future platform for radio in Europe 1 Private broadcasters need incentives 3 At national level, key to success: political vision / industry collaboration 2 At European level, we need receivers with FM and digital capability 4

16 FM spectrum is full No new services / poor audio quality Limited innovation Long term decline

17 DAB+ brings benefits to all stakeholders ListenersBroadcastersSociety Benefits of DAB+

18 For listeners, DAB+ brings clearer sound

19 DAB offers extra choice (UK example)

20 Annual cost to broadcasters of transmission per service 1, $k Source: GatesAir. Note: (1) Opex costs; on DAB+, assumes 18 services on multiplex; for further information, see: 19_Harris_comparison_DAB__to_FM_and_DRM_final.pdf? DAB+ offers lower costs -92% -89% -82% New small scale DAB offers lower costs for very local stations

21 DAB brings enhanced traffic information to the car TPEG via DAB+ 20x as much detail as TMC Recently launched in Italy by Infoblu (Autostrade per l’Italia) km of roads -instant information to drivers about traffic speeds, accidents and delays Strong support for TPEG via DAB+ from German Ministry of Transport (BMVI)

22 Key to success is political vision and industry collaboration Industry collaboration ContentCoverageReceiversMarketingAutomotive Policy & regulation

23 Regulators provide incentives for private broadcasters Australia: No new entrants for six years Switzerland: public funding to support costs of dual transmission UK / NL: automatic extension of FM licences for services on DAB Relaxation of regulation of FM business - e.g. rules on ownership, formats, production and advertising Government contribution towards costs of infrastructure roll-out (subject to European State Aid rules)

24 Is this enough to persuade private broadcasters? Dee Ford – Group Managing Director Radio, Bauer Media

25 Analogue and digitalDigital-exclusive services For broadcasters: opportunity to launch new services CASE STUDY: Absolute Radio (UK)

26 Weekly listening hours, m Source: RAJAR +136% Absolute has doubled its audience – with digital-exclusives

27 What about IP?

28 For listeners on the move, depending on IP alone would be high risk IssueInternetDAB / DAB+ Free to air (for listeners) Economic model 1 (for broadcasters) Reliable (in emergency) X X X (1) Mobile network operators have limited interest in audio and less interest in radio. They will demand payment for infrastructure (e.g. eMBMS) required to provide universal coverage – source Telefonica (2016)

29 DAB coverage on Norwegian road-trip – from Oslo to Bergen DAB drop-out

30 Mobile telecom coverage on Norwegian road-trip: 42 drop-outs *Illustration based on 42 drop-outs covering 80 kilometers, map not representative.

31 DAB Digital Radio Free to air Universal Reliable in emergency Interactive Personalised eCall and M2M IP Audio and traffic information services DAB and IP are complementary platforms

32 What about receivers?

33 Europe should mandate receivers with FM & digital capability Across Europe, DAB radio emerging as de facto standard -56% of European citizens are covered First countries moving to DSO, but market development is fragmented Analogue radios (including in-car) will not work in DSO markets Receivers with FM and digital capability will -accelerate development of DAB across Europe -protect consumers (as markets move to DSO) International campaign calling on EU to introduce this regulation

34 Conclusions - for Poland DAB+ is the core future platform for Europe 1 Clear political vision required at national level 2 Create regulatory environment to encourage all broadcasters 3 Create industry body to promote DAB+ to consumers 4 Work with European partners to secure FM and digital capability in new receivers 5

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