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.