GENEVA — The experience of the last few decades shows that the broadcasting market does not transition independently between technologies. It requires that all stakeholders align with the same objectives and coordinate their actions. To achieve this level of involvement, clear incentives must be provided by public authorities.
Following the European experience, South 180 recently undertook a strategic analysis of the necessary incentives to facilitate a smoother and quicker transition from FM to DAB+. Its results, however, apply to other broadcasting technologies.
In such a process, the potential benefits of the required investments begin to be realized in the medium term, fully manifesting over time. Conversely, the costs are incurred initially in the short term, persisting throughout the transition period. It is therefore logical and necessary for public authorities to become involved, since they can stimulate this transition in several ways.
Consequently, we have identified a series of incentives that have encouraged broadcasters’ involvement in this process.
Financial incentives
Any transition must guarantee the profitability of commercial radio stations by ensuring that competition will not increase. Radio markets tend to be oligopolistic, with a limited group of operators controlling most advertising expenditure. Maintaining the status quo of analog players in DAB+ is a key incentive for these players to invest their resources in the transition.
Similarly, the financial support provided for the costs of simulcast broadcasts, which are necessary for several years, positively affects broadcasters’ willingness to embrace the transition. In some countries, the government has also assumed coverage costs in road tunnels, as the new network is also used to broadcast emergency messages.
Public administrations can also provide financial support for radio’s technological transition by reducing the economic burden on broadcasters. This can be done in two ways. Firstly, by directly linking financial support to the transition, for example, by co-financing communications campaigns to promote the new technology. Secondly, by reducing general costs, for example, by cutting the fees that broadcasters pay for the use of the spectrum.
Transmission and reception incentives
Any technological transition invariably involves a reallocation of listeners. It is imperative that the approach to distribution is comprehensive, with the capability to deactivate previous distribution networks being a prerequisite. In Europe, this has usually entailed the discontinuation of medium wave and the possibility for broadcasters to independently determine the cessation date for their FM transmissions, which often occurs at the local transmitter sites, based on the radio listening behaviors in that region.
Another incentive for industry players is to ensure that only licensed players use the spectrum reserved for DAB+.
Given the need to acquire new reception equipment on the listener side to tune in to DAB+, it is of the utmost importance for broadcasters to minimize any potential loss of listeners that this could entail. To facilitate this transition, public authorities can offer various forms of support. Notably, they can secure the position of the new technology in vehicles, as they are a key location for radio listening.
In the European Union, the regulation stipulates that vehicles equipped with radios must include a digital tuner. This measure has been instrumental in promoting the broader adoption of digital terrestrial radio.
An additional incentive is the requirement that digital radio tuners be installed on other equipment, such as traditional radio receivers.
However specific tuners are no longer sufficient. Many receivers, including smart speakers and in-car radios, offer a variety of alternative audio services. In this regard, it is becoming increasingly important to request that policymakers give prominence to radio, ensuring listeners can find and access radio content easily without additional costs.
Licensing incentives
Although it may seem counterintuitive, some countries have linked the renewal of analog licenses to the obligation to invest in the development of DAB+.
Licenses are a vital asset for commercial radio stations; without them, there is no business. Offering greater guarantees of renewal of current and profitable analog licenses in exchange for investments in the new yet-to-be-profitable digital licenses is a relevant stimulus that allows broadcasters to commit long-term investments by eliminating an obvious risk to their business.
Similarly, certain countries have introduced deregulatory measures in conjunction with investments in DAB+. These measures include relaxing concentration rules, reducing requirements in terms of formats and genres and reducing or eliminating local and regional output requirements.
In a context of investment requirements for the deployment of new technology, the ultimate goal of these public incentives is to accelerate the transition, thus reducing the associated costs. They are intended to serve as a guide to facilitate constructive discussions between radio stakeholders and ensure that such a transition is aligned with long-term market sustainability.
The author is a co-founder and research director at South 180.
This story originally appeared in the July/August 2025 edition of RedTech Magazine.
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