Friday, July 12, 2013

Media: The Real Cost of Digital Radio

This is Naustdal, my home village on the West Coast of Norway.
My mother, who still lives there, can receive 5 radio stations via FM or over 20 via DAB. 
Digital radio is very expensive. Or at least so we are usually told by wannabe experts. I have previously shown that is not the case. To build a DAB+ network from scratch is actually cheaper than staying on FM. But what is the real cost of building digital radio in Norway?

The mountainous country demands 765 DAB+ transmitters to cover 99,5% of the population with up to 20 radio stations. NRK P1, the main radio station of Norwegian Broadcasting Corporation, currently reaches the same percentage via FM. The government demands that the broadcasters will cover the same amount of people with DAB+ as with FM.

But DAB+ will also cover a lot more roads than FM has ever been able to. With more radio stations. One FM transmitter can only carry one radio station, whereas a DAB+ transmitter can carry up to 20 radio stations. Not to mention road tunnels. There are 1,200 road tunnels in Norway, 500 of which are 500 meters or longer. These 500 tunnels will be covered by DAB+ by 2017 and also double as an emergency system. In case of a fire or an accident, authorities can override the normal radio stations and distribute potentially life saving information to motorists. FM currently covers 200 road tunnels. The cost to distribute DAB+ in tunnels is marginal, as there are huge synergies with the emergency network which is currently being built to cater for communication between emergency services. The bill to cover the tunnels with emergency services and DAB+ is being picked up by the Norwegian Road Authority.

925 transmitters on 765 transmission sites
In Norway public service broadcaster NRK and the commercial broadcasters have joined forces to build the network. Or networks, as there are actually two, but they share sites and antennas. That saves costs for everyone. NRK needs 765 transmitters on 765 transmitter sites to cover 99.5% of the population. The commercial broadcasters need an additional 160 transmitters on 160 of the same sites as NRK to cover 90% of the population. Or put differently, covering the last 9.5% of the population requires 605 transmitters. That is almost five times as many as the first 90%, although the last 605 are on average much less powerful than the first 160. There are 5 million people in Norway.

The prices for the two networks are then as follows.
To build the two DAB+ networks costs almost 1 billion NOK (126 million Euro).
That is an average cost per transmitter of only 1.1 million NOK (137,000 Euro).
Running costs each year the next 20 years amounts to approximately 200 million NOK (25.2 million Euro).
The yearly running costs for FM are currently 190 million NOK (24 million Euro).

The DAB+ networks will, when finished in 2014, use less than half the electricity of the current FM networks.

And people all over Norway will get between 15 and 40 radio stations. Why such a difference? Around half a million people will receive NRKs 15 or so radio stations by the end of 2014. The remaining four and a half million will receive almost 40 radio stations from NRK and private broadcasters by the end of 2013. The DAB+ networks in Norway are expanding by the day. They now cover approcimately 85% of the population.

No cinemas, no pubs
Currently, around half the Norwegian population receive as little as between 1 and 5 radio stations via FM. These people do not live in cities or large towns. They do in other words not have access to operas, theatres, cinemas or a decent selection of restaurants, cafés or pubs. Some do not have web access, let alone broadband. To many of the rural Norwegians, a huge increase in the number of available radio stations therefore matters. I should have a certain idea, I am from rural Norway myself.

Many people that are critical to DAB are from the big cities. They already have a wide selection of entertainments on offer. Including a lot of radio stations via FM. Luckily, the Norwegian government includes less urban people. They know how great radio is and what a difference it can make in people's lives. The government has been brave enough to decide to switch off FM in 2017 so that broadcasters can concentrate on making great programs that will be available to everyone.

The British are about to follow suit.