A Question

[radiorob2.0]

How are you gonna pay for it?

Finding revenue in today's crowded advertising market is already a challenge for radio. Adding a third more stations will have an effect on the so called "main channel". That's assuming this HD thing takes off.

 

[SUPERCASTER]

Agreed.
HD radio seems like a DEAD END, a real looser. No revenue, almost no HD radios (none cheap), reduced (divided) audience, more interference from other stations, more cost to stations and listeners, small coverage area (lousy for long distance commuters, and people are commuting longer distances then ever).
Soon we'll see this post "HD RADIO, MAY IT REST IN PEACE".

 

[xmradiopro]

I have read rumors online that new retails are in development for low cost HD radios. I'm guessing these radio might be anywhere from $99.00 to $149.99 by the holidays. Also look for price drops on Recepter and Radiosophy at that time.

 

[radiorob2.0]

I have read rumors online that new retails are in development for low cost HD radios. I'm guessing these radio might be anywhere from $99.00 to $149.99 by the holidays. Also look for price drops on Recepter and Radiosophy at that time.

That wasn't the answer to the quesiton.

 

[Chuck]

How are you gonna pay for it?

Finding revenue in today's crowded advertising market is already a challenge for radio. Adding a third more stations will have an effect on the so called "main channel". That's assuming this HD thing takes off.

I've eluded to this question several times, but so far no answers. I operate a small FM that rim shots into a "not so big" (top 200) market. Life is good here, but I'm having trouble with the concept of paying someone a lot of money to dilute our current audience.

The only time I can see this making sense for a small station like us is when local area sports are concerned. We could possibly broadcast two games at the same time. That might make money, but it wouldn’t be without its own complications. We could also keep the music playing for those who want it, and simultaneously run local sports for those who want that. I've found that a lot of our music listeners hate it when the music stops. Unfortunately, I think those people are just chronic complainers who never lift a finger to support the station. I don't see the "vocal ones" as a potential revenue source. I think that is too bad, but none the less a reality. I doubt very many of them would be early adopters and purchase a HD radio. Maybe in time, that will change.

In large markets, I can see how multiple channels might make sense. You need a very large potential audience if you are going to divide it up into groups who represent much less than a 1% share. A little less than one percent of the 15 million in NYC is still a sizable group. But in a small community of 15-25,000 people, it sounds more like a waste of electricity. Even small markets frequently have 20-30 stations to choose from.

I can also understand NPR and PRI's enthusiasm for multiple streams, but they have an unusual business model. Technology pros and cons aside, I have trouble with applying this idea to smaller stations, especially those who already address a niche market to begin with. If the pie gets cut so thin that there is nothing but crumbs left, a lot of stations won't have a reasonable chance of economic survival, at least, without greatly reinventing their business model. I'm not saying there isn't an opportunity out there, but it looks to me like there may be better ways to invest time and capital.

As they said in the movie Jerry McGuire, “Show me the money."

 

[JasonW]

Chuck wrote:

<I've eluded to this question several times, but so far no answers. I operate a small FM that rim shots into a "not so big" (top 200) market. Life is good here, but I'm having trouble with the concept of paying someone a lot of money to dilute our current audience.

The only time I can see this making sense for a small station like us is when local area sports are concerned. We could possibly broadcast two games at the same time.>

It sounds like using your SCA channel would help you more than an HD2 stream. You could broadcast one game (or music) on your main signal and run the game (or a second game) on your FM SCA channel. FM SCA receivers are inexpensive and easy to obtain. I bought a brand-new one on eBay for less than $40.

-- Jason

 

[autopaint-1]

And the HD's are still in the experimental stage in major markets. I'd say it's going to take quite a few years for this state of the art technology to find it's way into small market stations. I know 20,000 people is a large group but in a city like NYC it's not unusual for many more than that number to gather in one stadium to watch a game or hear a concert. Everything is relative of course.

 

[jegrant]

While I certainly think SCA does have appeal as an "off the shelf" solution at this point, I can see HD subchannels being worth a bit more even in smaller markets if or when HD Radios can get into the hands of more people. Small market stations could lease subchannels to religious and other networks who seek to get closer to "national" coverage. This could provide some steady income to the small market stations and help cover the cost of upgrading to digital.

 

[Chuck]

While I certainly think SCA does have appeal as an "off the shelf" solution at this point, I can see HD subchannels being worth a bit more even in smaller markets if or when HD Radios can get into the hands of more people. Small market stations could lease subchannels to religious and other networks who seek to get closer to "national" coverage. This could provide some steady income to the small market stations and help cover the cost of upgrading to digital.

I suppose that depemds on how much the receivers cost. SCA stuff is cheap, but it doesn't sound very good. I suppose that's why FMeXtra intrigues me. But if I can't get them to buy a $39.95 SCA receiver...

As autopaint said, "all things are relative."

 

[1q2w3e]

How are you gonna pay for it?

Finding revenue in today's crowded advertising market is already a challenge for radio. Adding a third more stations will have an effect on the so called "main channel". That's assuming this HD thing takes off.

It amazes me that people cant understand this......

If you put on an HD2 channel it is more than likely a nitch format. You dont need to run up big dollars on ads for an HD2 station (doesnt cost too much to run it). The idea is to draw in listeners you would not normally have, or advertisers you normally would not have. If you have a specific audience, you can narrow cast to that audience. Likewise you can narrow advertise. Charge less for the smaller advertisers (if it makes sense for them to advertise to that audience). To increase sales you need to bring in new advertisers..... this may just be a great way of doing it. For those of you that think that there is a limited amount of dollars, you are right, but not limited at the present levels. How many companies out there are not advertising on radio but could be? The list is VERY long.

Too many people are so used to doing things we haev in the past. Times change boys and girls!

 

[Chuck]

How are you gonna pay for it?

Finding revenue in today's crowded advertising market is already a challenge for radio. Adding a third more stations will have an effect on the so called "main channel". That's assuming this HD thing takes off.

It amazes me that people cant understand this......

If you put on an HD2 channel it is more than likely a nitch format. You dont need to run up big dollars on ads for an HD2 station (doesnt cost too much to run it). The idea is to draw in listeners you would not normally have, or advertisers you normally would not have. If you have a specific audience, you can narrow cast to that audience. Likewise you can narrow advertise. Charge less for the smaller advertisers (if it makes sense for them to advertise to that audience). To increase sales you need to bring in new advertisers..... this may just be a great way of doing it. For those of you that think that there is a limited amount of dollars, you are right, but not limited at the present levels. How many companies out there are not advertising on radio but could be? The list is VERY long.

Too many people are so used to doing things we haev in the past. Times change boys and girls!

That may be true in a large market. In fact, it's probably a "no brainer in a top ten market, but I'm not sure it will hold true on a smaller scale. For those of us who are happy in much smaller ponds, we might get to a point of diminishing returns very rapidly. How far can you subdivide a fairly small audience? How much value does a spot have if ten or fifteen people are listening? Will the fans of "All Polka, All the Time" pony up for a new radio, or will they just spend their money on some new Al Yankovitch CD's? Those are fair questions. Even though you may be able to bring some people back to radio (that's good) some of the niche audience will inevitably be from your own ranks. (That’s not so good.)

I suppose you could always broker the channels to some religious group. There is always someone out there who is desperate to get on the air, but I don't see that as a real positive. Besides, you can do that with your existing SCA channels. I can't say I've had a run of people wanting to do that. Will making it digital make it more attractive? I guess we'll find out.

In any case, I think that adding new channels is a very tenuous balancing act. I suggest exercising caution before jumping off in the deep end.

 

[autopaint-1]

"That may be true in a large market. In fact, it's probably a "no brainer in a top ten market, but I'm not sure it will hold true on a smaller scale."

I guess it all depends on how many potential listeners you lose to alternative sources of entertainment. If it's a small percentage than maybe you are correct in your coverage area and I know that's your concern but you have to see the country as a whole population wiae and large market (IE very valuable properties) have to do something to survive the competition of the sats, IPODs etc. Trust me, if everything in broadcasting were on the scale of small market stations IBOC, or most other technological improvements would not exist becaise the financial rewards would be small.

 

[Chuck]

Trust me, if everything in broadcasting were on the scale of small market stations IBOC, or most other technological improvements would not exist becaise the financial rewards would be small.

Probably so, but I believe that, at least percentage wise, most radio stations are in small to rural markets. After you get out of the top 50 markets, there are still a lot of stations out there.

 

[autopaint-1]

BUT most of the audience is in the more populous cities. Are we more interested in a large number of radio stations serving fewer people than the smaller number of facilities which provide content to the majority of the population. In other words, is the land more important than the population?

 

[Chuck]

BUT most of the audience is in the more populous cities. Are we more interested in a large number of radio stations serving fewer people than the smaller number of facilities which provide content to the majority of the population. In other words, is the land more important than the population?

So what do you do with the 2/3 or so of the 13,400 radio stations on the air that aren't in the populated areas?

 

[autopaint-1]

"So what do you do with the 2/3 or so of the 13,400 radio stations on the air that aren't in the populated areas?"

If your numbers are correct may I suggest that we do nothing. They can operate without IBOC and have their protected contours..Protected. If 2/3 of the stations in this country are serving areas without population then what is their point? If they are serving a rural population which is what I guess you meant then they are in areas where larger stations which are likely to go IBOC don't cover anyway, so what's the problem. If and when IBOC goes night those protections remain. If on the other hand if you want to cover a region outside of your protected area that's another matter. If those areas are in non ionteference zones may I suggest these stations do what KKOB has done. They've put in a low power transmitter to cover those dead zones the main doesn't cover and yet the low power keeps interference under control.

 

[Chuck]

If 2/3 of the stations in this country are serving areas without population then what is their point? If they are serving a rural population which is what I guess you meant then they are in areas where larger stations which are likely to go IBOC don't cover anyway, so what's the problem. If and when IBOC goes night those protections remain. If on the other hand if you want to cover a region outside of your protected area that's another matter. If those areas are in non ionteference zones may I suggest these stations do what KKOB has done. They've put in a low power transmitter to cover those dead zones the main doesn't cover and yet the low power keeps interference under control.

Even if it is 1/3, it is still a significant number of stations. Most small market and rural broadcasters count on audiences that are well beyond their protected contours. I know that the FCC guarantees nothing past your protected contour, but the reality of how radio currently works is a bit different from the theory. So far you are making a good argument for "HD is good for the big guys and not very good for the small guy." Being one of the small guys, that concept does give me some problems.

 

[autopaint-1]

"Even if it is 1/3, it is still a significant number of stations. Most small market and rural broadcasters count on audiences that are well beyond their protected contours. I know that the FCC guarantees nothing past your protected contour, but the reality of how radio currently works is a bit different from the theory. So far you are making a good argument for "HD is good for the big guys and not very good for the small guy." Being one of the small guys, that concept does give me some problems."

Sorry to sound insensitive and may I add that I thiink you are one of the very honest ones asking good questions as opposed to allegation. That said; asking that the FCC inforce protection outside of your protected contour is like my saying Officer, I know the speed limit is 50 MPH but I have to get to work by 7 and I can't leave home until 6 so that's why I must drive 80 MPH. if you want to cover more territory do the engineering to prove that you won't interfere with other stations and if after that is done you find yourself the victim of interference you'll have a leg to stand on.

 

[Chuck]

" if you want to cover more territory do the engineering to prove that you won't interfere with other stations and if after that is done you find yourself the victim of interference you'll have a leg to stand on.

Perhaps you'd be astounded at what kind of engineering it took to get on the air to begin with! It amazed even me. That's not uncommon these days, and some of those "shoehorned" stations are actually doing a good job of serving their communities. In many cases, I'm not sure how you could push the envelope much farther, unless the FCC relaxes some of its rules. Naturally, that would have its own set of consequences.

By the way, I appreciate the fact that you understand I have no ax to grind one way or the other. I do have genuine concerns and I am looking for answers. That’s all. I think there are very valid points on each side of the debate, as well as a lot of erroneous information coming from both sides as well. Broadcasting by its nature loves a good debate, and the more incendiary things get, the better people love it. It's probably why talk radio does so well....

 

[autopaint-1]

Well I think you said it yourself when you wrote that it took an engineering fete to shoehorn that signal in so that a certain community could be served. I would guess that community you are serving is within the protected contour and must be protected from interfering stations. It's those distant areas which some broadcasters have taken for granted as being within their market, even though those areas would be considered deep fringe out of market that we are talking about and as the days of the wide coverage 50 KW stations should probably come to an end, these smaller local stations have to realize they are licensed to cover specific localities and the .1 Mv contour is not protected from interference. In today’s world if a broadcaster of one of these smaller outlets wants to cover a wider area their best hope might be via the internet or through local cable distribution.