Some call it the 21st-century Walkman, others, the next iPod. In a phenomenon that hints at Back to the Future, the humble radio is being positioned as the gateway to easy music downloads without a PC.
Radio stations in the U.K. are leading the charge to morph Digital Audio Broadcast (DAB) radios into pocket radios that integrate TiVo-like features such as pause, rewind and record along with an electronic program guide (EPG). Using a simple "I want this" button on models in the design pipeline, a listener would be able to download a song without having to go home, turn on the PC, search the Internet for the track, download the file and transfer it to an iPod or other MP3 player.
It's an idea that will "give radio a chance to reinvent itself," said Glyn Jones, operations director at Digital One, a leading multiplexer of digital radio broadcasting in the U.K. Moreover, "If the radio industry does not get engaged now, the mobile-phone industry will claim this space," said Nick Piggott, digital content manager at Creation, the GWR Group plc's programming and content services division.
The radio has always been the technical and emotional link between record companies and listeners. Now, some want to use it to connect those listeners to the Internet, portable music players and even mobile phones. This scenario is based on the market perception that "the best time to sell a song is when one is listening to it," said James Cridland, head of new media at Virgin Radio. "Radio can play songs people haven't heard before. Radio is where people are surprised by new songs."
GWR Group which owns 63 percent of Digital One last year teamed with BT Group to develop a mobile digital datacast operation called BT Livetime. It will launch this year with live TV-to-mobile service; music downloads are scheduled in 2006. The BT-GWR venture uses Digital One's digital broadcast capacity, running alongside eight national digital radio stations.
GWR last year launched its "Hear It, Buy It, Burn It" campaign, the world's first music download service for radio. It redirects DAB listeners to their radio station's Web site to download music from the PC and burn it on a recordable CD. By using DAB's datacasting spectrum, digital radio broadcasters will take the next step in this progression: downloadable digital music services that sidestep the PC. That's the setup that Piggott describes as the 21st-century Walkman.
The jury is still out, however, on whether radio can survive a download melee that includes practically everyone, from mobile operators and handset manufacturers to Microsoft Corp. and the consumer electronics giants. Radio carries some intrinsic advantages, industry players argue. "Once broadcast, digital radio's signals can be received by 100 people or a million people," said Digital One's Jones. "The cost remains the same and there will be no busy signals." And a pocket radio's memory capacity gives consumers somewhere to store the music they download.
But Simon Dyson, senior analyst for the market-research firm Informa Media Group in London, observed that broadcasters are entering into "very untested waters. Digital radio services are just starting to look into selling downloads," he said. "Although radio has been servicing consumers with music for many years, they have not acted as a retailer."
Another advantage for radio is that personal off-the-air recording is legal enshrined as a consumer right. It may not remain free, however, if rights owners start wrapping certain digital tracks with digital rights management (DRM) technology.
Another drawback: Digital radio can't match the Internet's volume and variety. DAB's spectrum yields a data rate of 1.2 Mbits/second, and in the U.K. 20 percent of this or up to 230 kbits/s is available for datacasting. That's hardly enough to offer the range of music tracks consumers are accustomed to from the Net.
There are several ways radio stations can offer downloads, said Matthew Honey, managing director at Unique Interactive, a London-based data aggregator and distributor that is a part of UBC Media Group, the U.K.'s largest audio production company. UBC Media is preparing a digital radio music download service to compete against Apple Computer Inc.'s iTunes and mobile-phone operators' 3G services.
Option one is an EPG that displays, for example, an upcoming 60-minute retrospective of 1960s Top 40 hits. By pushing "record" on the radio's EPG, the consumer stores the entire program automatically.
Another download option is to "prebroadcast" a music track in a compressed audio file a few minutes in advance via a data channel available to DAB broadcasters. A listener tuned to live radio who finds an irresistible track can hit a "record" or even a "buy" button. The file subsequently downloaded would not be recorded from the live broadcast, but from a data channel linked to the broadcast.
But without a return channel on a radio, how to buy a song? There are several scenarios, said Honey. A prepaid card could be issued, for instance, able to decode 10 songs. A consumer might also dock a pocket radio onto a PC to purchase songs, although that option has scant appeal to some in the radio community. Alternatively, a mobile phone or PDA integrated with a DAB receiver chip could offer a return channel capability.
In redesigning a pocket digital radio for music downloads, the first question is the identity of this new device. "Is it going to be a threat to MP3 players, or is this an evolution of MP3 players?" asked Andrew Moloney, marketing manager at RadioScape Ltd. (London). Alternatively, will the new box to be a part of mobile handsets or something that competes with them?
"Choosing the right technology for portable radio devices is not trivial," said Creation's Piggott, because of the broadening divide between the mobile world and Microsoft's PC platform, characterized by different DRMs, audio codecs and file formats. "We need to pick a format that's sympathetic to the compact form of our pocket radio," said Piggott. And while consumers prefer transparency, "supporting two separate DRMs bumps up the cost."
A USB port is another big question. Although some radios are equipped with USB to enable software updates Pure Digital's BUG radio is one of them (see story, this page) "our study shows, 'Don't do USB,' " Piggott said. "People don't want to get their radio connected to a PC."
Another issue is static vs. removable memory, said Honey. "Record companies want the static memory, but I am not sure if that's what consumers want."
The bottom line is that broadcast, to most consumers, means stability. "People will use one radio for 12 years," said Piggott. Microsoft changes its software regularly and consumers swap out their mobile handsets often, but "a portable radio has to be the right system for the long haul."
Thanks to innovative programming by a number of forward-thinking radio stations, the U.K. thus far enjoys the highest DAB penetration, at 1.3 million radios sold. The United States has adopted a different terrestrial digital radio broadcast standard, HD Radio, and also has competing satellite-based digital radio broadcast standards (Sirius and XM Radio). Although U.S. operators have begun discussing their own plans for music download via the radio, the DAB community, by far, is the most advanced in its planning.
Moreover, DAB stations in the U.K. believe they are better positioned than their U.S. counterparts, largely because they enjoy a more relaxed business relationship with the record industry. The recording industry in the U.K. is happy to have radio broadcasters explore things like music downloads, as long as they get their cut. In the United States, by contrast, the Recording Industry Association of America takes a much tougher stand. As every new platform (such as satellite digital radio) comes along, the RIAA wants tight control and develops a new business model.