Thursday, August 14, 2008

When $$$$ just are not enough

Regular readers know that I have a commercial radio broadcasting background...23 years on the air! Nowadays, my day job involves planning and buying advertising, so I have even more reasons--in case I needed any--to follow what is happening with traditional radio. And there are plenty of things, most of them not so good.

Obviously, there are more and more ways for people to get audio entertainment, and even video is quickly becoming as ubiquitous as the traditional "tower-on-the-hill" over-the-air radio stations. In an attempt to blunt some of the momentum away from radio, broadcasters finally, after many years of wrangling and in-fighting, settled on a digital transmission standard as the way to stop the bleeding. Dubbed "high definition radio" or HD radio, this new technology offers listeners greater fidelity, even for AM, the ability to send digital text to receivers, such as traffic reports, stock market updates, or sports scores, and--maybe most intriguing--allows stations to have sub-channels that might offer alternative programming. In effect, one station would now be two or three stations. Of course, anyone wanting to hear the greater fidelity and sub-channel stations offered by HD radio would have to invest in a new receiver.

Well, the technology has been in place for a while now, and the National Association of Broadcasters and a unified group of station owners have been touting it extensively for a couple of years. This has involved millions of dollars in marketing and untold dollars' worth of air time on radio stations. They have had a little success in getting some auto manufacturers to make HD receivers an option in their new vehicles.

Otherwise, the effort has to be considered a bust. The chart at the top of this post is based on Internet searches on Google for "Internet radio" (orange line), "satellite radio" (red line), and "HD radio" (blue line). Granted, people searching on the Internet might have a slight tendency toward searching for an Internet streaming audio source, but this clearly shows that HD radio has hardly made a ripple, despite the air time, dollars and marketing behind it. Google searches are usually a pretty accurate indicator of the public's awareness and interest.
A blog I read regularly by a media researcher named Mark Ramsey (and the place where I stole the chart above) maintains that broadcasters completely misunderstand what listeners really want. Fidelity is not the issue. Most people think regular FM sounds just fine. It is not even variety that people want...a fact that has led to a flattening of satellite radio subscription rates since that is their key selling point. They want entertainment, information, and compelling content they cannot find anyplace else, and they don't care how they get it--iPod, Internet, cell phone, Blackberry, a speaker in the dash of the car. And more and more, they want all that stuff to MOVE. They prefer video to go along with it.
I'll go a step farther. I think people want companionship. They want a friend on the radio who understands what they are experiencing. A buddy who makes them laugh. A guy who can't wait to share a new band or song or story with them.
Like everybody, broadcasters are looking for a quick technological fix, and the cheaper and simpler, the better. Install some stuff in a rack and run some HD radio ads on their stations and instantly people break up with their iPods, drop their cell phones, divorce their XM subscriptions and flock back to their old girlfriends.
But it takes more than that. They have to give the people what they want. And that costs money. Money and time and creativity and risk. In an industry that has gravitated to primarily attempting to please Wall Street analysts, those four words are equal to the preaching of the anti-Christ.
Whoever is the first radio group to really, really invest in research and talent and take a few calculated risks will be the one that shows the way. I see nobody really stepping up to lead the parade.
I love the medium of radio. I hope it is not too late to save it from itself.
Don Keith


Anonymous said...

iPods, iPhones, cell phones, and personalized music services such as Pandora and are killing radio. I have been posting these graphs on Ramsey's, and other sites for a while, now. Amother good site, besides Google Trends is Compete, which shows direct traffic to sites, such as

All of the graphs are contained in my blog:

Anonymous said...

I agree with your premise, but I still maintain that radio is committing suicide. Any creative endeavor -- be it movies, TV, radio -- that completely turns over control to bean counters is doomed to lose when some other choice comes along for the consumer. Yes, any entity has to be run in a businesslike manner. The bottom line, the stock price, the P&L -- those are all hugely important. But when that is ALL that matters, or when the product suffers, then the business is doomed.

Those devices you list can do a far better job of giving people song after song that they want, with no interruptions, no babbling deejays, no commercials. Anyone can program an iPod better to his or her taste than a radio station can. But the stuff between the songs, the way those songs are mixed together, the "aura" or personality of the delivery mechanism are the things that could make radio different and more desireable.

"30 in a row!" won't cut it.

"The best of the 70s, 80s, 90s and today with no nasty, ugly old commercials to get in the way" won't either.

And neither will "near-CD-quality HD audio."

Creativity, human warmth, interaction, information unavailalbe elsewhere...all those things...could make radio far better than a list of songs spewed back through ear buds.

Thanks for the comments!

Don Keith

paul vincent zecchino said...

Why do some say 'everything about HD is a lie'? Why do press reports deem it a 'carny shill' and 'high stakes corporate scam'?

Why do HD promoters deny HD's jamming with just a bit too vehemence?

Doesn't HD amount to State Sponsored jamming?

Why does BigRadio - whose stock prices reflect investor disappointment - insist we discard billions of good analog radios and purchase costly, balky HD stooge radios?

Isn't that what's called 'churning', or endless obsolescence for perpetual revenue?

Does BigRadio like the idea that blatant HD jamming hurts competitors and forms a false pretext to deny new licenses to aspiring broadcasters?

But citizens aren't quite so naive as BigRadio assumed, are they? Isn't that why listeners long ago rejected HD radio?

Got HD? Here's the juice:
Older listeners don't want it.
Younger ones laugh at it.
Manufacturers dislike it.
Retailers can't sell it.

Doesn't jamming billions of good analog radios to uselessness constitute a 'taking', just as if your property were unlawfully seized for cronyistic purposes?

Listeners will strain through the worst interference to hear compelling programs, but they tuned out supposedly 'crystal clear' HD, where one pays over and over and over to hear the same old dull faire.

Truth won. HD lost.

Paul Vincent Zecchino
Manasota Key, Florida
15 August, 2008

Anonymous said...

Paul, thank you for your comments. I don't think BIG Radio has any sinister ulterior motive. I just think they are grasping at any straw that costs them few dollars and involves minimal risk. That is why in-band, on-channel HD was the system approved in the US while other countries go for totally new technology.

US broadcasters did not want to invest in any more new transmitting equipment than they absolutely had to in order to get those extra sub-channels (which they can't sell because there is no way to measure any audience they might accidentally get...and they are really only slicing up their main channel listenership in the few places where something interesting is being put on those signals). That and to have something new to talk about -- the first real change in commercial broadcasting since FM emerged.

I don't necessarily agree that listeners have rejected HD. I just don't think those who are even aware of it give a rip. Why go to Best Buy and beg a completely uninformed sales rep to drag out a demo HD radio from the back room and show it to markets where there may not be any stations to listen to...and even if you can, the signal in the big-box store is so bad you can't really get them?

Give me one reason to go to the trouble and expense!

Don Keith

bobyoung said...

You said:

"I don't necessarily agree that listeners have rejected HD. I just don't think those who are even aware of it give a rip."

As the consumer goes I guess they can't reject something they haven't heard of, but it certainly has been rejected among many of the people who most matter: The engineers and radio station employees themselves including many who have been forced by their bosses to install this lousy technology, even big box salesman know it's junk and know it isn't selling. There seems to be only a small percentage of people who really care about it, pro and con. The rest really couldn't care less except for the ones who have bought them and have had negative results which seems to be the majority of buyers. The result of all this is of course, no sales.
IBOC is dead as a door nail.

Bob Young
Millbury, MA

Doug said...

HD Radio certainly hasn't taken off the way Big Radio would like, but don't we have to give the broadcasters credit for at least trying something different?

Traditional radio is gonna go away? Don't bet on it. There are millions and millions of AM/FM radios out there. Traditional radio is free and it may not be perfect but it's free. Satellite radio has maybe 13 million subscribers - just a drop in the bucket vs. traditional radio.

Internet radio is great but if you can't listen on your computer or cell phone, you have to buy a new radio, just like HD. For that matter, how many hours of battery life are you willing to give up to hear your favorite music when you could just turn on your MP3 player?