Tuesday, December 30, 2008

HD Radio - The Grand Illusion

So the HD Radio Alliance issued a press release yesterday.

"HD Digital Radio Alliance Continues Aggressive Marketing Campaign in Q1 Despite Down Economy"

It makes for fascinating reading, although probably not in the way intended by the Alliance.

The new 2009 campaign will focus on HD Radio's evolution (not sure how that will play to a certain segment of the population, but we'll let that pass).

So what will this fantabulous new campaign be about? According to the press release,
HD Radio has 'evolved' and wants to show off its cool new features (iTunes Tagging), low price-points (as little as $79), extra stations (from Indie Rock to Smooth Jazz to The Irish Channel), and no subscription fees (perfect during a recession). And with less advertising 'clutter,' there has never been a more perfect time for the message to resonate with consumers.
OK, let's look at those points in detail.

Cool new features (iTunes Tagging) - What customers want:
  1. Hear a song on the radio
  2. Press a button
  3. Download song
What customers got with iTunes tagging:
  1. Hear a song from an HD Radio broadcast that has compatible metadata on an HD Radio tuner that has the iTunes tagging option
  2. Press a button
  3. Metadata (NOT song) stored on tuner until customer syncs iPod with tuner
  4. Customer syncs iPod with computer
  5. Metadata loaded into iTunes and displayed as an option to purchase
Not only does this take way too many steps, but look at all the qualifiers in step one. Only some of the radio stations in this country broadcast an HD Radio signal. Of those that do, only some have the iTunes Tagging metadata. And there are only a few tuners capable of even using said data. My dad might think this is cool, but I'm used to downloading directly from the Internet. I find this a lukewarm feature at best.

Low price-points (as little as $79) - Low prices are good, in context. Getting a product you want for $79 instead of $300 is a real bargain. Being asked to spend $79 dollars for something you neither want nor need is just a waste of money. So far, most consumers have shown a steadfast indifference to HD Radio.

Extra stations (from Indie Rock to Smooth Jazz to The Irish Channel) - This could be attractive, if all of these stations were available in all markets. They aren't. Most commercial stations only have one HD Radio signal -- the simulcast of their regular programming. Of those that do offer an alternative channel, it's up to the station to pick the one -- or two -- other programming feeds it offers. So I'm sure the Irish Channel is being aired somewhere, but not in every major market, and certainly not in most other markets throughout the country. So if you're thinking of getting an HD Radio for that fine Indie Rock Channel, better check your local program listings first.

No subscription fees (perfect during a recession) - Cool. But analog broadcasts are also free. So if money is really tight, why not save $79 (see above) and just keep using the radio I already have? I know this tis a swipe at satellite radio, but that's still a small percentage of the radio market. This seems to be paying it a disproportionate amount of attention.

And with less advertising 'clutter,' there has never been a more perfect time for the message to resonate with consumers - Does it mean that the Christmas season is over, so there's fewer ads? Nice, but filling the empty spaces with HD Radio spots isn't really the solution. Listeners have consistently complained about the overburdened spot breaks for years. Too many commercials in every break simply makes every ad less effective, and all of them more annoying. This press release acknowledges that there's clutter -- so why not address that problem (less spots at higher ad rates) and make everyone happy?

I'm not sure talking about HD Radio in terms of evolution is the way to go, but one thing's for sure. This isn't intelligent design.

- Ralph

Day 189 of the WJMA Web Watch. (We could do with a little evolution here.)

3 comments:

  1. I'd pay $30 for one, and that would only be as a novelty. I'd like to hear what WVTF/Radio IQ are putting on their auxiliary channels, and would love to access to program one of them. Of course, what's the point if there aren't listeners?

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  2. 1) "Editorial: 'Tagging, You're It'"

    "Among all the new ideas introduced to U.S. radio broadcasting in 2008, we believe among the most exciting is the addition of music tagging to analog FM. When the tagging concept was announced as an additional feature for HD Radio, we found it interesting, but upon learning how cumbersome the process was to actually execute by listeners, and how few devices actually supported it, we tacitly concluded it was much ado about very little, at least in the near term."

    http://www.rwonline.com/article/71716

    Tagging now being done on analog - Apple's products do it seamlessly without HD Radio.

    2) Consumers buy few radios these days - RadioShack is no longer a "radio shack". Even Struble admits this much:

    "First and foremost, AM/FM receiver unit volumes are way off. For at least a decade, more or less 100 million devices with AM/FM tuners in them were sold every year, 15-18 million or so in new cars, and 85 million in all other segments: home stereos, clock radios, aftermarket auto, boom boxes, etc. Well just a few years ago, we noticed something disconcerting, 100 million had become 80 million, almost overnight."

    I can buy an excellent Sony ICF-S10MK2 for $10, or an excellent AM/FM/SW Kaito WRX911 for $15.

    3) Extra channels - niche channels, like CCU's Format Lab are a failure:

    "Harvard Business Review: Should You Invest in the Long Tail?"

    "Chris Anderson, editor of Wired magazine, argues that the sudden availability of niche offerings more closely tailored to their tastes will lure consumers away from homogenized hits. The 'tail' of the sales distribution curve, he says, will become longer, fatter, and more profitable... What she found may surprise you: Blockbusters are capturing even more of the market than they used to, and consumers in the tail don't really like niche products much."

    http://www.citeulike.org/user/mmkurth/article/2984768

    "CC Radio’s Format Lab gone?"
    November 2008

    "So bottom line, the Format Lab is no longer available on the web and has cut some of its formats down to the most successful/desirable. The www.iHeartMusic.com website seems to only list the main audio streams of CC stations--not multicast HD formats--but does offer a few off to the side: erockster; Pride; Verizon New Music; Smooth Jazz; Real Oldies; Slow Jams and New Country. There used to be something close to 100 formats listed on the site."

    http://www.rbr.com/radio/11252.html

    4) HD Radio may not be free for long, and RadioGuard will obsolete current HD radios:

    "Now on HD Radio: Subscriptions, Pay Per Hear, and More"

    "A new 'conditional broadcasting' feature for HD Radio called RadioGuard, from NDS, will allow owners of compatible HD radios to pay for premium content via a subscription, a one-time charge, or as part of a sponsored deal... They're primarily looking at home and car use right now because it's hard to design a device like this to consume so little power that it can be carried away from a power source."

    http://blog.wired.com/music/2007/04/now_on_hd_radio.html

    ReplyDelete
  3. bobyoung8:06 PM

    Sean Tubbs don't waste your money, they're not worth having even if they paid YOU 30.00 for the annoying fact of having stations drop out, of having adjacent stations hissing over each other, and of having your receiver range cut to at least 50% of analog. In ten years HD radio will be a huh? what's that?

    ReplyDelete