Wednesday, August 05, 2009

HD Radio sells out

Something interesting happened in Gainesville, Florida this week. The city completely sold out of HD Radios. There're some lessons to be learned here, but first a little background, and then some perspective.

The background
Public radio station WUFT had been the area's sole classical music station for some time. The station, owned by the University of Florida, decided to ditch the classical format for news and talk. Rather than just pull the plug, the classical music was moved to an HD2 channel. In answer to the howls of protests from long-time listeners, the general manager said: "buy radios." Which, apparently, they did.

The perspective
It's no secret (except to the radio industry) that HD Radio is a non-starter with the general public. So the total number of HD Radios available for sale in the Gainesville area was not that high, to begin with. I would be surprised if a retail store like Best Buy had more than 10 units total in stock.

No matter how vocal the opposition, when it comes to format changes, only a fraction of the pissed-off audience actually does anything. Out of tens of thousands of listeners, a station will receive perhaps 10 or 20 letters of protest. So the total number of people looking for HD Radios to keep listening to classical music is only a fraction of the total disenfranchised audience.

The takeaways
This story has three important messages if you pay attention.

1) Want to move HD Radios? Give listeners a compelling reason to use them.
Most HD Radio signals are just simulcasts of a station's regular programming. That's not compelling. Some do additional programming, but it's not promoted. In WUFT's case, the switch was a highly publicized one, primarily due to the controversy. And it was the only source of the programming people wanted.

2) Music to talk: get used to it.
Just because a station's non-profit, doesn't mean they're not looking at the bottom line. For public radio stations, the numbers speak for themselves: news/talk attracts more listeners than classical music, brings in more donations to the station, and (because it's all syndicated) can be run with less staff. WUFT's switch may seem evil to its long-time listeners, but in management's eyes, it was the logical thing to do. The story's been played out on other stations throughout the system and will occur in much more in the future.

3) HD Radio offers a way out.
WUFT's management knew their decision was controversial, but they had an out. They didn't kill classical music, they just moved it to another location (albeit an underpowered one that few had the necessary equipment to access it). WAMU did it with their popular bluegrass programming, and other stations have done it with formats they wish they weren't saddled with. This is a tactic we'll see used again throughout the system.

4) Internet streaming, the untold story.
Missing in all the coverage is the fact that WUFT's exiled classical programming is streaming on the web. And that's really where the potential for audience growth lies. As it gets easier to access the Internet in portable devices you can use in your car, Internet radio listening will continue to grow. So in the end, it doesn't matter how many bought HD Radios. The smart people have made the move to their smartphones, and even if it didn't make the news, that's where the action really is.

- Ralph

Day 116 of the WJMA Podwatch.

5 comments:

  1. "AllAccess.com: The Letter"

    "So when the local Best Buy finally started to sell them, I fought through the mobs of excited HD Radio purchasers and... Okay, there were no mobs. In fact, that's 'Nobody Cares,' Chapter 1: If you don't go searching for them, you will never find an HD Radio in the store. These were hanging on a forlorn pegboard all the way in the back of the store, next to the cassette and CD portables, which, sadly, is appropriate company. There were no signs. There were no other models. There was no attempt to educate consumers about the technology. They were just hanging there in the Ghosts of Technology Past department, without even a price sticker on the peg. I don't think the staff even knew they were there. All that stuff from the NAB and the Grand Exalted HD Radio Alliance about major marketing to get people to adopt, embrace, LOVE HD Radio? That's happening in another universe. I think they bought ads on the sides of unicorns. The first portable is out there, in the wild, and there's no marketing for it at all. Nobody cares."

    http://tinyurl.com/mrn283

    The BB stores stocked about 5 per store, and there was a run on the portables by the broadcast industry. The general public couldn't care less. Struble refused to disclose any sales figures.

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  2. Anonymous12:03 PM

    What you may not know about the program switch is the very duplicitous manner in which it was carried out. At a time when UF is facing its worst financial crisis on record, the dean of the college decides to hire two highly paid consultants to study the situation at the stations. They then unilaterally make the choice to move to more of an NPR talk format. What they neglected to mention is how will the college pay for these programs beyond their free trial period, particularly since they offended and cut off the majority of the donors.

    I do not necessarily disagree with the switch, but the way in which it was handled is purely disgraceful. Seventeen long-time employees have been axed (not the consultant's daughter of course) and the reputation to the J-school permanently damaged.

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  3. To HD Radio Farce:

    I guessed 10 radios per store, and I admit I was being overly optimistic. I read the letter from AllAccess.com and based on my experience, I think it's 100% accurate.

    HD Radio was DOA, and the more time passes the smellier the corpse gets. Flawed as the technology is, though, I think it would have gained greater traction if stations had invested in attractive and unique programming to cause some kind of a demand for the radios.

    I think the Gainesville run on HD Radios (all 30 of them) illustrates what could have been. Maybe.

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  4. Anonymous:

    Unfortunately, the situation you're describing is becoming a standard one. For most people "public radio" = "NPR." And in a world where fewer of the decision makers even make a pretense of caring about classical music it's a lot easier to pull the plug. Especially as it will pull in all those NPR fans.

    There's also the lure of easy money with the NPR affiliation. Most stations can directly attribute large percentage of their donations to "Morning Edition" and "All Things Considered." How much of said funds are paid back to NPR for the airing of those shows is another story. But there's apparently still enough left over to make it worth while.

    So when a station is looking at ditching local programming for NPR affiliation, the advantages seem to be an instant audience increase and a corresponding increase in revenue (talking perception here, not reality, which is a little messier).

    But something else happened in Gainesville that I haven't seen a lot of discussion about, and that's using HD Radio as an audio Siberia. "We didn't kill classical music -- we just put it on a different channel." (We didn't take Ivanoff out of circulation by yanking him off the streets of Moscow, we just gave him a new home in a gulag several hundred miles away).

    It keeps management from being a bad guy (at least in their own minds) while doing exactly what they want. And if classical withers on HD2 for lack of an audience, well, I guess the listeners weren't really that dedicated, were they? (Notice how no one ever suggests moving news/talk to HD2 exclusively).

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  5. "Struble: Radio Is the Last Analog Medium Standing"

    "Insignia HD — I think this will be a nice little interim step for jogging or working out. It proves the viability [of the technology] and hopefully we'll get sales; but no, this is not going to sell in the hundreds of thousands... Radio alone — the sad reality of where it is — as a standalone device, it just doesn't exist anymore as a category. Nobody goes into Best Buy and says 'Where's the radio department?'"

    http://www.rwonline.com/article/87370

    The Insignia was obviously short-supplied at Best Buys, as Struble admits HD Radio sales are a flop, but we already knew that. The Zune HD, with the HD Radio chip is also a flop, as the 16GB is ranked about 150th at Amazon, and the 32GB is ranked about 50th:

    http://www.amazon.com/gp/bestsellers/electronics/ref=pd_ts_e_nav

    At the most recent NB show in Philly, Struble was touting HD Radio sales - LOL!

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