DAB radio faces threat from satellite rival

DAB radio, the digital radio format in which the commercial radio sector and BBC has pinned its hopes and invested heavily, is facing its biggest threat yet as US-style subscription satellite radio is set to launch throughout Europe.


Ondas Media, a private Madrid-based satellite radio group funded by a group of German and Swiss investors, has agreed to provide its radio devices to a string of car manufacturers such as BMW and Nissan, and will today announce a landmark deal with Britain’s Jazz FM to broadcast the station in 27 European countries when Ondas’ service launches in 2012.
The carmakers have been viewed as vital to making a success of DAB radio – although many have been slow to offer DAB radios. Some, including Vauxhall and Ford, have committed to offering DAB radios in some of their models.

However, many car manufacturers have been sceptical about the UK’s commitment to DAB, whether another platform will take its place and whether there will be a universal DAB standard that will work throughout Europe.
Some car manufacturers had been reluctant to participate because the UK is one of the few countries in Europe that has adopted digital radio and the motor industry wants to manufacture on a pan-European basis.
A deal with Audi is also close and deals with Mazda, Toyota, Honda and Jaguar are all expected.
Ondas is run by Dave Krueger, a former consultant to the popular US, advertising-free subscription satellite radio business Sirius.

Jazz FM chief executive Richard Wheatly will work with the group to create additional specialist radio channels with tailored content. The deal with Jazz FM is the first of its kind.
Ondas plans to launch with 150 channels in 2012, which will broadcast minimal advertising to its subscribers. Its devices will have the capacity for multi-lingual radio, music, video and data services. Some models will also feature personal video recorders.

The satellite radio company is also in talks to enter content deals with the BBC.


Ondas does not build the radio but licences its technology to electronics manufacturers including Bosch, Continental and Delphi.
Those car manufacturers that have signed up have agreed to buy either one-year, three-year or five-year subscriptions.
Mr Krueger said the monthly subscription will be €10-€12 a month for individuals. While refusing to comment on the value of individual deals, he expects revenues to be at least €200m by 2013 and double that amount in 2014.
The fact that so many car manufacturers have committed to satellite is a potential blow to DAB. Many commercial radio groups have pinned their hopes on DAB radio. However, despite plans for a 2015 switch-over, there is much scepticism as to whether this will be achieved.
Tim Davie, the BBC’s director of audio and music, recently said he had reservations about a switchover to digital radio by 2015, saying the time frame is “ambitious”.

Ondas' current deals with car manufacturers will see satellite radios fitted into 10m cars across Europe in 2012, although Mr Krueger believes this could rise to 30m-40m as more manufacturers sign up.
He is also hoping for households to invest in the technology, which he hopes to be available in other devices, such as mobile phones and Tom Tom sat nav devices.
In the same way television programmes are broadcast from satellites, music and chat can also be beamed to special receivers. However, unlike traditional radio stations, there is no interference and no driving out of range.
Mr Krueger said satellite radios also give users a more interactive experience, beaming playlists from their home computers to car devices and incorporating features such as satellite navigation.


By Amanda Andrews "Daily Telegraph."

Source:-

http://www.telegraph.co.uk/finance/newsbysector/mediatechnologyandtelecoms/digit...