Internet killed the (digital) radio star

During a trip to the US four years ago, I rented a car fitted with an XM satellite radio — which gave me well over 100 radio stations, each carrying a continuous stream of crystal-clear talk radio or music in a surprising array of genres. Station ID, current song, artist and other information were displayed, and the broad reach of the satellite meant it worked even in the most rural areas.

Around 18 million Americans spend about US$10 a month for satellite radio, which is quite reasonable given the huge array of content they provide and the large distances Americans regularly drive.

With that country's Federal Communications Commission this week indicating it may well approve the merger between XM and archival Sirius, the market is about to get the certainty and scale that was lacking in a protracted battle not unlike that between HD-DVD and Blu-ray.

Australia, on the other hand, still doesn't have satellite radio despite the fact its blanket coverage makes it ideal for providing equitable access across Australia's vast spaces. Instead, industry body Commercial Radio Australia (CRA) is looking towards digital radio, which uses conventional terrestrial broadcasting techniques to transmit high-fidelity sound and whatever gimmicky extras the content producers can think up.

Digital radio's progress in Australia has been glacial at best: trials began in 2003, but real, live digital radio services are expected to begin next year.

But that's not where the story ends: even when it goes live, CRA CEO Joan Warner told attendees at ACMA's recent Radcomms08 conference, that digital radio is being compromised by the lousy spectrum allocation it has received from the government.

Turns out the signal doesn't penetrate buildings, and drops off dramatically even if you're in the open but a building is obstructing your line-of-sight to the digital radio tower. "Our [coverage] predictions weren't accurate enough, and a driving tour [of Sydney's suburbs] shows a significant dip as you head behind buildings," Warner conceded. "We need enough field strength to make areas like that work."

That, she explained, means getting guaranteed access to frequency other than the 9A spectrum band — a TV-band frequency between 202MHz and 209MHz that was granted by ACMA for the trials.

These frequencies, Warner said, are "not optimum spectrum for our launch. We must have access to spectrum that enables us to broadcast across the whole licence area at appropriate power levels. This is a long-term investment, and we really can't launch the network [effectively] unless we know where we're going to be in five to 10 years' time — and currently we don't have that."

Perhaps I can clarify where digital radio is going to be in five to 10 years' time: nowhere.

It may have seemed like a good idea a decade ago, but digital radio is simply not important or relevant anymore. It is a "me-too" effort of the grandest scale, a redundant, pointless exercise born more from the industry's desire not to be left behind, than from any real need.

I don't think anybody's really complaining about the current AM/FM line-up. Whereas digital TV is the only way to deliver HD and its eye-popping resolution, digital radio offers little real advantage over conventional analog radio.

Honestly, who needs to hear Kyle and Jackie O in 5.1 surround sound? Apart from the few dozen SACDs on the market, almost no content out there has even been mastered in 5.1.

Album pictures? Hardly compelling. Song titles? This information could be delivered using subchannels on existing FM stations, the same way TMC (Traffic Message Channel) delivers live traffic information to your GPS.

Here's the biggest problem: nearly every car, household and office in the world has an AM/FM radio. They're on bedside tables, in garages, in thousand-dollar home theatre systems, in MP3 players, mobile phones, and everywhere else in between.

To have even a distant chance of working, digital radio would have to convince people to replace this gear with digital-capable devices.

Car owners are a natural target — and, like XM and Sirius have done, CRA is trying to convince car makers to include digital radio-capable kit in their cars. Car makers think long-term, however, and by the time your average car has digital radio — easily five years down the track — two other forces will already have hammered the final nails in digital radio's coffin.

One is Internet radio, which is already widespread and available in consumer electronics components that let you tune in radio stations from Melbourne to Moscow, from Saskatchewan to Swaziland. These stations are usually rebroadcast in mono or at low bit rates to cut bandwidth costs — but they don't have to be. (Local firm Torian Wireless deserves special mention here for iRoamer, a universal Internet radio platform that will be licensed to third-party electronics makers from next month.)

The second nail will be 3G mobile phones, which will increasingly be used to free Internet radio from the desktop PC. This is already happening: applications like FlyTunes and iRadio already let iPhone users stream radio stations. Plug your iPhone 3G into your car radio, and — voilà — you've got almost any radio station in the world, wherever you go.

Even the satellite providers smell inevitability in the air: XM streams 25 stations straight to US mobiles with its XM Radio Mobile service. And for US$12.99 a month, Sirius offers 64 streaming radio channels through its Sirius Internet Radio service.

It's a breeze to port this stuff to the iPhone; build it into phones from Nokia or Samsung or whoever; or offer it through existing mobile content portals. Sure, many existing and coming mobiles can access Internet radio, but bandwidth consumption will make it too pricey unless the carriers offer unmetered access to certain radio stations — and that requires a partnership between telcos and radio broadcasters.

Stations like Austereo currently stream online, but sharing revenues from a subscription service would be a nice little money-spinner. And while CRA is still flying the flag for digital radio, the services will flop — not because they are bad, but because streaming mobile Internet radio offers ease of access, lower cost, and a far larger selection of content.

If CRA wants to be involved in the next generation of radio, it should forget about talking spectrum with ACMA, and instead start cold-calling Telstra, Optus, Vodafone and 3 to discuss their mutual interests. There's no point waiting for tomorrow; when it comes to Internet radio, tomorrow is already here.

Am I being too harsh? Do you see a future for digital radio? Would you buy it? Is it worth further consideration by the government? Or should that spectrum be used for more relevant services?