Strategy Analytics Blogs and Podcasts

Europe Dials into DAB/DAB+

by Roger Lanctot | Mar 10, 2016

At the WorldDAB gathering at the Geneva Motor Show yesterday I got an eerie feeling about just how different Americans are from Europeans. After the third presenter estimated the percentage of radio listening time occurring in cars at less than 20% of the total I could no longer contain myself and simply had to ask (channeling Ben Stiller’s character in “Tropic Thunder”): “What’s wrong with you people?”

Sensing an intervention at hand, the attendees at the conference explained to me that the lack of automotive radio listening as a percentage of total radio listening derived in part from the fact that Europeans use their cars and televisions less than Americans. Public transportation is more comprehensive, inexpensive and easy to use and Europe is just generally smaller and more densely packed than the U.S. - ergo, less driving.

What emerges from this minor revelation is the fact that the U.S. is far more car obsessed and, perhaps as a result, more willing to pay for its radio listening – whether that be contributions to public radio stations, data for streaming audio, or subscriptions to satellite radio. The obsession with cars, though, is critical to understanding both markets.

Both the U.S. and Europe, like many regions around the world, have been confronting the limitations of the existing analog broadcast radio spectrum. This supply-demand disconnect was what gave rise to the shift to digital radio: HD Radio in the U.S. and DAB/DAB+ in Europe and elsewhere around the world. Broadcasters wanted more room to grow, innovate and compete.

Digital radio promises a lower cost of operation and lower power requirements while offering higher capacity and the ability to transmit higher volumes of information, new types of data and content and a higher quality signal. In the U.S., the transition to digital radio using HD Radio technology from iBiquity, which is now part of DTS, has moved rapidly relative to Europe thanks, in part, to the car-centric culture of the U.S.

Companies seeking to influence the use and adoption of radio technology in the U.S. over the past two decades have repeatedly turned to the automotive industry as the linchpin of radio listening. Companies that have followed this path have included iBiquity, of course, along with Sirius Satellite Radio, XM Satellite Radio, Pandora, iHeartMedia and TuneIn.

IBiquity’s initial efforts focused on broadcasters – seeking to establish a wide range of content on the digital dial – while simultaneously developing automotive industry contacts including suppliers and the car companies themselves.  Today thousands of stations are broadcasting digital content to millions of cars.

Sirius and XM launched their satellites while building a model guaranteeing hardware and service subsidies that the combined company now estimates has put billions of dollars in the bank accounts of car makers.  As in the case of HD Radio, the result is millions of cars subscribing to SiriusXM's broadcast services.

Pandora got its start online, but its rapid transition to mobile is well documented as has been its path to automotive adoption. Pandora committed substantial resources to establishing a strong foothold in the automotive industry which continues to serve as a base for building a wider, global effort now including podcasts and spoken word content and, maybe soon, on-demand services.

WorldDAB has worked with regulators, broadcasters, consumer electronics companies, semiconductor and component manufacturers and car companies for more than 10 years to speed the adoption of DAB. At long last, these mighty and far flung efforts have Europe on a path to adoption that has the finish line in sight, including anticipated switchovers from analog to digital in Norway, Switzerland and the United Kingdom in the coming years.  In many countries digital radio coverage surpasses the coverage of analog broadcasts.

But the effort behind DAB/DAB+ adoption has been a struggle very likely due, in part, to Europe’s slightly diminished focus on the use of cars for radio listening. Car companies are now aggressively moving forward with DAB/DAB+ integration – with 98% of car companies exhibiting at Geneva offering DAB/DAB+ in their cars. (Ferrari is the lone holdout.)

Make no mistake, regarding consumer interest in car radios in Europe.  RadioPlayer presented survey results, and related consumer videos, demonstrating that consumers have come to expect radios to be in their cars and that the lack of one would be a deal breaker.  Strategy Analytics' own surveys have shown a similar sentiment throughout the world.  The radio is a "must have" item in the car.

After returning to my hotel room following the WorldDAB event I reached out to Larry Rosin, president of Edison Research, publisher of the annual Infinite Dial report, political survey operative, and all around good guy and he had this to say: “Well, I do believe (in-car listening) is much lower (as a percentage of total listening) in Europe than in the USA because they are just less car-oriented.”

Rosin estimates in-car listening to radio in the U.S. as a percentage of total radio listening at approximately 40% - “higher if you remove 55+ listeners.” What is most unusual about this is that radio ratings provider Arbitron, now owned by Nielsen, has built a multi-hundred-million-dollar business around radio ratings with only a limited understanding of what consumers are listening to in their cars.

Nielsen’s in-car listening blindspot is matched in Europe where researchers are focused on radio listening outside the car. In spite of the diminished role of cars in Europe, car manufacturers are playing an essential role in digital radio adoption which has finally achieved critical mass.

The best news of all is that boring old car radios are now seeing enhancements ranging from digital weather, traffic, parking and fuel pricing information to news feeds, emergency alerts and graphics. Having spent an entire week without driving a vehicle I can honestly say “you” Europeans may be onto something. But I’m looking forward to taking the wheel again later today upon my return to the U.S. and feeling the radio dial in my fingertips, or the steering wheel controls, or the touch screen or whatever.

Previous Post: Is INRIX Calling the Right Signals in Seattle? | Next Post: Data Collection Dilemma Facing the Connected Car

Let's talk

Now you know a little about us, get in touch and tell us what your business problem is.
Inquiry / Message: