Speech

Ed Vaizey's speech to Drive to Digital

This speech was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government

Minister for the Digital Economy Ed Vaizey spoke at the 'Drive to Digital' conference on digital radio

Good morning everyone.

Well here we are again at the fantastic home of BBC Radio.

I have had the enormous pleasure and honour of being the Minster responsible for radio over the last five years during a time when there has been a massive creative explosion across all UK creative industries - of which radio remains a fundamental part.

The creative industries are an area that the UK excels at and which has grown by almost ten per cent in 2013, three times that of the wider UK economy and accounted for 1.7 million jobs in 2013, which was 5.6 per cent of UK jobs.

This massive contribution is an all-time high and equates to around £8.8m per hour, or £146,000 every single minute, therefore playing a key role in supporting our long-term economic plan, which has turned the economy around.

Perhaps the most dramatic change since 2010 has been the leap in connectivity and the roll out of superfast broadband - pushed by our investment - and the resulting explosion of access to video and audio entertainment.

With an apparently endless choice of TV channels, on demand content, thousands of radio stations and music services like Spotify and Deezer what is most surprising – certainly to many outsiders – is the strength of the UK radio industry - more popular and just as relevant as ever.

Radio does face challenges against competition for advertising. Though it remains a powerful medium it is not perceived as sexy - rightly or wrongly - by lots of advertisers. It remains the most underrated medium in terms of its share of advertising.

But radio has shown itself time and time again that it is a medium which remains well adapted for the digital age: the perfect accompaniment to just about anything from digital surfing, cooking, working to driving home.

The trick for radio is to grow both its reach and commercial impact – as gauged by average revenue per listener.

And digital radio is absolutely central to this – there has been a widening of choice and content over the last four years to the point where we are now short of national capacity.

As well as the massive success of BBC 6 Music, almost as successful has been the launch and rise of Radio 4 Extra. Launched in 2011 it is now the 2nd most popular digital station.

Over on national commercial radio we have seen an increase in the number of stations available from four in 2009 to 14 today.

Many of those stations are doing well, with Absolute 80s being the leading commercial digital station with over 1.5 million listeners. In the last few years we have seen more new national stations added such as Capital Xtra, LBC, and Magic and the capacity is now totally full.

However, there is a risk of radio descending into sameness, with the same formats and playlists chasing the same mainstream audience. In my view, digital radio needs to promote a broader and more diverse range of services.

So the new D2 multiplex and the ability to deploy DAB+ with the new service seems to me to be a golden opportunity to broaden the range and types of radio content, to widen its reach to listeners and help increase it’s commercial impact and I was very pleased with the plans presented by both bidders – Listen2Digital and Sound Digital - to broaden and strengthen the appeal of DAB.

But to even discuss issues arising from a full national commercial multiplex and D2 shows how much has changed since 2010 and the scale of what was needed to get from there to here.

One of my early actions when I came to DCMS was to launch the three-year Digital Radio Action Plan.

The previous Government had put in the legislation – but there was an urgent need for a comprehensive plan supported by Government, industry and Ofcom to support the expansion of digital radio, tackle the barriers to digital migration and to assess the feasibility of a future radio switchover.

The issues then included:

  • the lack of an agreed set of technical standards for DAB receivers;
  • very limited DAB coverage at a local level with national services also falling short of FM; and
  • limited engagement with the car industry and a very low level of standard DAB conversions in cars

Following the completion of work on the Action Plan, I set out our long-term vision of a digital future for radio at the Go Digital conference in December 2013.

I did say that it was too early to set a date for a future radio switchover and that we need to see the majority of listening move to digital and have DAB coverage expand to close to FM equivalence before we will be ready to be talking about switchover dates.

But what I was able to announce was a series of measures that helped us achieve those criteria.

Well today I can confirm that the planning and – the lengthy debate about expanding DAB coverage has finished and we are now ready to commence the biggest ever expansion of DAB.

Today we are formally announcing the building of 182 new digital transmitters across the UK – in England, Scotland, Wales and Northern Ireland as well as modifications and frequency changes at a further 49 sites.

Ofcom have now published the detailed coverage maps and an outline timetable for the completion of this work – by summer 2016. The programme will almost double the number of local digital transmitters and will take local DAB coverage up to the level of local commercial radio on FM.

It will also create more of an even playing field so commercial stations can compete more effectively with the BBC on digital.

These new transmitters start to be built next month and will increase local DAB coverage from less than 75 per cent of households today to above 91 per cent.

This is fantastic news for millions of listeners who will now be able to listen to their favourite local stations on DAB – including BBC local and nations stations.

It is also great news for motorists who will now be able to enjoy an uninterrupted DAB signal on thousands more miles of roads. I look forward to benefiting from the improved services when I’m out and about on the campaign trail.

The new local transmitters are being part funded by Government along with the BBC and the commercial multiplex operators. And I can also announce that we have laid the regulations which will allow local Mux operators who build out to the plan to extend their local licences to 2030, something I announced in December 2013.

Getting to this point has taken a long time, it has been difficult and complex process but I think it is a great example of cross industry cooperation working closely with Government and Ofcom.

But it also a very tangible sign of the Government’s long-term support for digital radio.

I would like to thank everyone who made this happen especially Will Harding [Global] Grae Allen [Bauer] Gregory Watson [Muxco] Jimmy Buckland [UTV] Paul Eaton [Arqiva] Tony Moretta and to Tim Cockram and Hellen Keefe at the BBC.

In 2013 the BBC announced a programme of 162 new transmitters to take their National DAB BBC coverage to beyond 97 per cent.

I would like to congratulate the BBC and Arqiva on this excellent progress. Already 100 new transmitters have been added and BBC national DAB coverage increased to 95 per cent. This work is scheduled to complete by the end of 2015.

During our deliberations about radio’s future I have been struck by the importance of local radio stations and the passion of those who run them.

I believe local radio – in all its forms has a strong and sustainable future - whether on FM, which will be sustained for the smallest stations, or on local DAB. But small local stations do need a DAB solution that works for them.

For that reason I was pleased to announce in December 2013 £500,000 of funding for an important programme of work by Ofcom to develop a low cost solution for small local stations to get onto DAB.

I am delighted that Ofcom are making very good progress on this development and I am pleased to confirm that Ofcom will be commencing a series of 10 area trials – more than originally envisaged - for small scale DAB starting this summer.

So taken together the expansion of local and national DAB coverage and the launch of the 12 licensed but un-launched local DAB multiplexes over the past 18 months is a massive step forward by the industry.

It means that so many more people can enjoy their favourite stations on DAB. It means that the entire primary road network will be fully covered. Hopefully it will finally end all those conversations about how much people love digital radio but it does cut out for 10 seconds under that bridge….

It will also signify that - by the end of 2016 - coverage criteria set by Government for a switchover decision will have been met.

The priority for radio going forward is for the radio industry, supply chain and vehicle industry to really come together and take the next step to deliver the benefits and communicate the benefits of digital radio.

Given the collective work already in train I am sure that together you will be able to move the digital listening from 38 per cent towards the switchover criteria of 50 per cent in the next couple of years – but as we have seen from the latest RAJAR figures there is much to do.

The theme of the conference is ‘drive to digital’. A huge amount of progress has been made since 2010 to tackle perhaps the biggest barrier to any future switchover – the conversion of cars. The car is where 22 per cent of radio listening occurs and digital radio in car is a much better listening experience than analogue.

We have had tremendous support from the vehicle manufacturers and their trade association the SMMT and I would like to thank to Mike Hawes, the SMMT and all the vehicle manufacturers for their brilliant support. I was pleased to hear that as of Q4 2014 over 60 per cent of new cars now come with digital radio as standard with a further 14 per cent having digital radio as an option.

That’s an incredible shift since 2010 when the percentage of cars with digital radio fitted as standard was only four per cent.

In the last 12 months 1.5 million cars have been sold with DAB. The Q4 2014 data also shows that commercial vehicles are now increasingly being fitted with digital radio as standard with now almost 30 per cent of vans coming with digital radio, which compares with four per cent at the beginning of the year.

But there remains the challenge of the existing stock of cars and finding a new low cost solution for cars, which do not have an installed DAB. I am keen to look at ways we can support research and innovation and I will be discussing this further with Digital Radio UK to see what might be possible.

When I spoke in December 2013 I was really pleased to be able to announce that DRUK would be taking a lead on the launch of the digital tick mark, working with manufacturers and retailers in both the domestic and vehicle sectors.

This is important as it raises the specification standard of radios on sale and will provide consumer reassurance and a better listening experience.

I am pleased to confirm that the majority of manufacturers have had their products tested and approved to use the tick mark and these products are beginning to arrive in stores.

I am also delighted to confirm that the DVLA is working with DRUK and has started to include digital radio messaging and the tick mark on 40 million tax reminders they are sending to motorists.

So in summary, good and continuing progress over the past 14 months, but there is still much to do.

It’s probable that the radio switchover criteria will be met by 2017 and the Government of the day will be able to take a measured and informed decision of when to set a timetable for the switchover from analogue to digital.

This will put us in line with other European nations such as Norway, Denmark, Switzerland, Sweden and potentially Germany where the rollout of DAB+ services has been given a recent boost by commitments from their public service broadcasters.

I am confident that radio will continue to thrive and prosper - a powerful, relevant modern medium prepared for the digital age - and you can be sure that I will be listening somewhere.