Broadcast, IP or Both?
     

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LONDON — The discussion about broadcast vs. Internet streaming is seemingly as old as the Internet itself; but new research, commissioned by digital radio developer iBiquity Digital Corp., seems to indicate a third way.

Price comparisons between Internet and FM transmissions are a logical place to start, yet these are complex, since an FM transmitter is charged at very different rates to Internet streaming.

COMPARISON
An example station broadcasting to a transmission area of around 2 million people in the United Kingdom indicates that its FM transmission rental costs are around US$75,000 (approximately €55,000) per year, regardless of the size of the tuned-in audience.

The station has a 5 percent market share, and examining its audience figures, it reaches around 43,000 concurrent listeners at its peak time; and this figure — the peak concurrent audience — is generally used in larger streaming setups.

A U.K.-based streaming company, which negotiates low-bandwidth rates for its streaming customers said that streaming costs to reach these 43,000 concurrent listeners on mobile or desktop would be around US$276,000 (about €201,000) per year.

This threefold difference in cost is amplified in many countries that charge extra for music rights to broadcast online.

Battery life can be a concern for many smartphone users. Gunnar Garfors, president of International DMB Advancement Group, and advisor for Digital Radio, NRK, tested reception of an NRK radio station on his Samsung mobile phone. In a single charge, FM reception lasted 48 hours, 12 minutes, while he said streaming lasted just six hours, 53 minutes: a difference of seven times the battery life. “Battery life is just one out of many reasons why broadcasting is proving to be a must-have functionality in future smartphones,” he said. “It will make a massive difference with regards to power consumption if everyone who consumes the world’s most popular media will have to do it via IP. Mass-market radio listening, i.e. live listening to national or local programs, only makes sense to do via broadcasting, the perfect technology for the task.”

A BBC Mast at Alexandra Palace in London.
Photo by James Cridland
SURPRISE
Mobile streaming doesn’t mean bigger mobile bills, however. The U.S. census gives an average commute-time of 25.4 minutes. An average commute with a 48 kbps live radio stream being delivered to a mobile device would be equivalent to 394 MB of data over a month.

According to research published by Cisco, an average North American smartphone user consumes 1.38GB of data per month. But North American mobile companies normally recommend 2 or 3GB inclusive packages for consumers. It’s likely, therefore, that most consumers wouldn’t notice a cost for streaming live radio just yet.

In Europe, inclusive mobile data packages are typically smaller, and commute times are less in most European countries. However, the increased use of public transport in some parts of Europe, notably the U.K., means radio listening while commuting can be significantly lower than the U.S.

Capacity problems and spotty coverage are regularly cited as negative aspects of mobile networks, but the evidence shows that these will increasingly become issues of the past.

Frank Hermans, head of Market & Proposition Development for cellular network provider Ericsson, says that the difference between 3G and newer 4G networks is “phenomenal.”

“It brings a lot more capacity. And we’re working as an industry to bring 5G standards by 2020, and 4G Advanced, which again almost doubles the 4G capacity as we know it of today, with a timeframe of 2016 or 2017.”

ROOM TO GROW
Hermans points out that networks are now being built for data. “Ten years ago the networks were dominated by voice; nowadays networks are designed to handle large streams of data traffic, specifically video traffic is now the dominant factor in the networks. That automatically opens up the opportunities for radio, which uses much less bandwidth, and easily can be part of this new distribution network as well.”

Hermans points to eMBMS, a broadcast/multicast system that is part of the LTE specification, as something network operators will be adding. “Looking towards the future scenarios of traffic we’re looking at, all means of enhancing the efficiency of the networks will be needed to cope with the increase of bandwidth demands in the coming years.”

The success of music services like Pandora in the U.S. and Spotify, particularly in Scandinavia, appears to show appetite for music consumption on mobile. Yet most broadcasters report that consumption of their radio stations on IP-delivered mobile is relatively low. Published figures from some U.K. broadcasters appear to show that, on average, people use their radio app twice a week for just 12 minutes each time.

FM radio is installed in some mobile phones, but the reception performance varies. Additionally, the user experience has not historically been comparable to streaming apps, which can offer album artwork and more information.

The situation is different in developing countries, with India seeing FM-equipped mobile phones as the most popular way to consume radio. Lucas Adamski, director of engineering for Firefox OS, a new, low-cost, operating system for mobile phones, says that FM is a must-have in mobile. “It’s one of the most requested features in countries like Central and South America. Radio is really popular, and it’s a big part of people’s lives there.”

An Internet sign is displayed at a store in Prague,
Czech Republic. Photo by James Cridland
COMBINATION
Increasingly, broadcasters are coming to the conclusion that both broadcast and IP are the future distribution platforms for radio.

“The future for mass-market radio is still a combination of the two. The majority of the live listening will occur via broadcasting networks, but a lot of the added functionalities and most of on-demand listening will be delivered via IP. Combination is king,” said Garfors.

Nick Piggott is chairman of RadioDNS, an open hybrid radio technology project. “There’s no doubt that IP is a transformative technology that broadcasters must engage with, but its technological limitations and business risks are sometimes not given enough consideration. Conversely, broadcast radio can feel like a legacy technology but its unique strengths aren’t valued as much as they could be,” he said.

“The hybrid radio proposition is that we mix-and-match the attributes of both approaches that best suit our listeners, customers and businesses. Listeners and clients get the appealing and interactive environment they want, and broadcasters get cost-effective and reliable scale of distribution.”

James Cridland reports on the industry for Radio World from London.

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