Monday, November 28, 2005

HD Radio: Digital Boondoggle

I've not written about HD Radio in a while, largely because I wanted to see it play out a while before trying to add anything new to the discussion. Here we are nearly two thirds of a year later and it seems that my initial reactions were largely spot on. HD Radio, on AM looks to be just as stillborn as AM Stereo was. The reasons are different, as I'll detail below, but the result is the same; namely, nobody outside the radio community seems to care. On FM, the rage is multicasting, that is the capability to broadcast multiple audio streams on the same frequency. Quality on both bands does not meet the initial set expectations of CD and FM quality for FM HD and AM HD respectively.

Sales of new HD radio receivers has been dismal at best. Many outlets have them on back order, or simply do not know they even sell the units nor understand what their value proposition is. I can't blame them because I've not seen any clear statement on the matter from the industry either. On that topic, it's worth noting that Arbitron is not rating Satellite and Internet streaming radio listeners at the request of the major radio players. Could it be those numbers won't look good, or that there are just too many problems? Although my gut suggests the former is true, I'm perfectly willing to accept the latter for the time being. We will know the truth soon enough. I'll step up right now and just say it: listenership is down and will continue to be down. Population growth will bring new listeners to the table, but not as quickly as they are likely to be leaving for other venues. Put simply, radio is losing it's mind share one podcast, satellite subscription and Internet stream at a time.

I've been evaluating technology for a long time now and there is one sure sign of trouble that always rings true. I call it the "coming soon" syndrome, or vaporware for short. HD radio will have better quality, more stations, promise of surround sound, more receivers, multicast capability, improved AM capability, nighttime any day now, etc... For a technology that's been cooking for as long as HD Radio has, these are very bad signs. Where are the success stories? Of course, the answer remains, "It's still early". Really? I'm thinking it's getting fairly late actually.

Numbers are hard to come by, but it's obvious that new Satellite subscriptions outnumber new HD radio purchases at least 10 to one, if not worse. There are plenty of HD Radio stations on the air now and the Christmas holidays are upon us. Yet I see nothing about HD Radio anywhere. It goes without saying that you just can't enter an electronics store without seeing at least one Satellite radio kiosk.

So what's the dirty secret of HD Radio? Glad you asked because the answer is becoming increasingly clear: Technical issues aside, HD Radio does not add any significant value to the radio listeners experience. When all is said and done, radio is radio. People will either bother to listen or not. And of course a growing number of them are not.

Let me make something clear here and now: I love radio, particularly AM radio. I want nothing more than to see the medium and the many great people working to continue to bring it to us every day, grow and continue to be a healthy, vibrant part of our culture. My personal reasons are all about the simplicity radio brings to the table. You just grab one, turn it on and tune the dial. Three steps to portable, quality entertainment that's almost impossible to beat from a cost standpoint. However, there are other reasons as well. In times of need, radio, in particular AM radio, has proven it's ability to inform, entertain and educate people despite the worst happening. None of the other technologies can come close to the power radio has. In good times people may choose their alternatives, but in bad times you can bet every last one of them will tune the dial looking for news and entertainment that will help them through.

If radio has such value (and you can bet it does) why then are people turning to alternatives in droves?

Content, relevance and diversity. Those three words lie at the core of our radio troubles today and HD Radio does exactly nothing to address any of them, save diversity and even that one is questionable given the IBOC system makes receiving distant and or low powered stations more difficult. Despite industry claims to the contrary, quality is not part of the discussion, content is!

While radio listeners everywhere are looking for interesting programming, the radio industry is bogged down in it's own digital quagmire --HD Radio. It seems the lure of the word "digital" has blinded those people that matter in the industry. "Going Digital" is a mantra repeated throughout the industry. This is a mantra of death as the precious dollars necessary to cultivate, develop and deploy new and interesting programming are consumed with technical software license purchases, expensive studio audio chain upgrades and untold transmitter site tweaks to make it all go. And as of today, nobody is listening!

It seems I read news of good radio people being downsized for cost reasons, yet these supposedly cash strapped radio giants will spend those dollars many times over to "go digital" without even asking just what the value add is. What's worse is the HD Radio technology is currently the focus of the media content companies. They want legislation to make an already limited value proposition more limited by mandating additional restrictions, such as the ability to control what listeners can and cannot record off of their new digital radios! The one killer radio application, being PVR type capability, will be hamstrung before it's even born. This makes no sense.

I've got an iPod and I've put a lot of very interesting content on it, from e-books and music to great segments from one of the very few quality stations (Go KNRK!) here in the Portland area. What's on my iPod is not anywhere as important as why it's on there.

The e-books are just cool. Reading good stories or news while listening to music is great entertainment. Having that portable just makes sense. The music tracks are a no brainer as well. Everybody has their favorites and having them on the iPod works when...


That's the biggie right there and I'm just stunned that nobody in the industry that matters actually gets it. But wait there is more!

I've got KNRK recordings on my iPod because that station is just great. The various shows and music sets really resonate and are worth actually listening to again and again. That's content worth tuning for and it competes with my iPod nicely. Frankly, nothing else on the dial, save some talk radio, actually does that any more.

Let me put it this way: The content on KNRK (and some other great stations here that just don't fit me musically) is worth keeping because I fear it might not be around much longer. So many great radio productions have gone dark, replaced by automated systems featuring what is best described as lifeless attitude. I enjoy my station enough to archive it for when it's no longer there.

For all those in the industry seeking to cut costs, consider the value quality people with passion bring to the table. Sure it's a two way street in that you will end up needing them, but is that so bad given the digital system you are spending many more dollars for will be just as needed and offers no solid value where it's needed most?

I know this is getting long, but bear with me just a bit longer while I weave podcasts and Internet streaming audio into this mix.

People are streaming today because the Internet brings them access to the content that fits them best, no matter where it's actually being broadcast. Podcasts let them carry similar content with them for use when THERE IS NOTHING ON THE RADIO.

Let me say that again:


The prevailing view seems to be that podcasts and Internet streaming audio are competitors to radio like Satellite radio is. Let me offer a counter view that is exactly the opposite. Given the current focus on quality, automation, scalability and low cost, Internet streaming audio, podcasts and Satellite are competitors. Not because they are better, but because the radio industry lowered the bar!

If the emphasis is on content that is relevant, engaging and compelling to the listener, then radio becomes the source for a lot of great podcasts and streams, thus leveraging the Internet and it's (dwindling) in-house audio production strengths. HD radio is an awful expensive way to add additional stream capability when the podcast and Internet are up, running, hip and largely free by way of comparison. Imagine the returns some dollars spent on working out licensing issues would bring, given the existing audience and growth potential it has.

So, forget HD radio. It's nothing more than a boondoggle that looks good on paper, but does nothing to address the core business issues of growth in both listenership and revenue. So, how to embrace the new digital media without going digital?

That's the subject of my next post --stay tuned!

(Thank you, thank you Entercom and KNRK for continuing to broadcast radio worth keeping on my pod!)