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An editorial on HD radio's fate

landtuna said:
If, as virtually everyone is saying, HD has no financial future in commercial radio why then is it still being used?
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Probably several reasons. At the station level, it costs almost nothing to throw a music format on an HD channel. Then add a translator, and you have something that can reach a few more people. If you don't have a translator, it's another channel available for streaming, You keep hearing people say content is king, and the HD channel is just another platform for content.

Then, let's say in ten more years, it reaches critical mass somehow, the way FM did in the 70s, and at that point, it's worth the wait. I'm always reminded of the radio companies who gave up on FM in the 60s. The Washington Post donated WTOP-FM to Howard University in 1966. If they had just waited a few more years, it would have become a huge asset. Instead it's an asset now owned by Howard University. They make millions from it even today.
 
TheBigA said:
Probably several reasons. At the station level, it costs almost nothing to throw a music format on an HD channel. Then add a translator, and you have something that can reach a few more people. If you don't have a translator, it's another channel available for streaming, You keep hearing people say content is king, and the HD channel is just another platform for content.
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I'm still confused. From what I've read on this forum I have gotten the opinion that implementing HD radio is not an inexpensive exercise. ibiquity license, new equipment etc., (especially if a translator is involved). Then the cost of the content (which seems in most cases to be Oldies of one sort or another and we all know you can't make money on Oldies).

The digital signal I listen to most of the time has but one major advertiser (perhaps two but since I automatically blank them out I might be wrong). That can't be enough to cover the costs of a license, translator (which they bought a year or two ago for several hundred thousand I think) and the music royalties. Or is it?
 
landtuna said:
That can't be enough to cover the costs of a license, translator (which they bought a year or two ago for several hundred thousand I think) and the music royalties. Or is it?
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I don't know. It depends on the specifics. Long term investing means that you don't make a profit for a while.

Which station are you talking about? If it's part of a big cluster, there are ways accountants can handle those things.
 
DavidEduardo said:


The hope for HD is entirely based on in-car usage. In the meantime, HD serves many licensees a useful purpose in allowing them to have an FM translator, that in all but the largest markets can often be a competitive signal.
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I just picked up one of the Echo Auto devices (introductory price...as with any first generation, I expect some kinks....comes with the territory). Of course it relies on data from your phone, which may or may not be a cost issue depending on your plan, and the ability to maintain a signal while driving, so it's not going to be for everyone. But if devices as simple as the Echo Auto catch on...that's going to further erode HD's slice of the pie in cars.
 
TheBigA said:
I don't know. It depends on the specifics. Long term investing means that you don't make a profit for a while.

Which station are you talking about? If it's part of a big cluster, there are ways accountants can handle those things.
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We lovingly call it The Lumberyard. AM=1440 FM=92.7 and HD =93.3 HD2
 
TheBigA said:
Mother Hubbard can afford to lose a few bucks on HD radio.
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I don't know how much we're talking about here so it may well be inconsequential but even retailers expect a bottom line appreciation with loss leaders in their offerings. How could a GM, even a well heeled one, justify running something that detracts from their bottom line?
 
landtuna said:
I don't know how much we're talking about here so it may well be inconsequential but even retailers expect a bottom line appreciation with loss leaders in their offerings. How could a GM, even a well heeled one, justify running something that detracts from their bottom line?
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In today’s groups, decisions like that are not made by the local General Manager. It would be a corporate decision.
 
TheBigA said:
We're already over 20 years into it. So consider it's around 1962 for FM. In a few years, the patent runs out, and it becomes shareware. That's when its use will grow.
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The situation wth radio today is completely different than it was during the rise of FM in the 1960’s.

Most factory car stereos from the past 20 years have an auxiliary input that provide smartphone audio output with an acceptable sound quality. This means that anyone with a smartphone and a cheap data plan has access to 50,000 radio stations of any genre imaginable. If that’s not enough, many people choose to pay an extra $10/month to listen to any song ever recorded and customize their playlists in an experience that’s free of commercials and DJ-chatter. Some people choose not to pay for Spotify, but I don’t know of one person that doesn’t know how to stream music on a phone. However, I can count on one hand the number people that have even heard of HD Radio.

When have you ever heard of a “must have” programming that’s only available on HD Radio? Any HD2 station that’s worth listening to will probably have an analogue translator rebroadcasting its signal. If not, the station will probably be available as an Internet stream. Satellite radio has Howard Stern to draw listeners to the service. What compelling content does HD Radio have in any market?

I recently replaced the factory radio in my car with a Sony double-din multimedia radio that supports Apple CarPlay. I could have purchased the Sony model that supports HD, but that would have cost me an additional $150. I couldn’t find a reason to listen to HD when so many options are available from my phone.

Here in Vancouver, we’re serviced by 6 HD radio stations (4 in Vancouver and 2 from Washington State). None of the HD sub-channels on these stations broadcast any original programming. Instead, these stations use the technology to rebroadcast their AM sister stations on FM. It’s more of a convenience factor so people don’t have to switch bands between AM and FM.

I was a big proponent of HD Radio when I tried it in 2006. I was amazed by how a public radio station was broadcasting multiple feeds of news, local music, and the BBC World Service all from one signal. I imagined what it would be like to have triple the number of radio stations with diverse content for free. Unfortunately, it was poorly executed from the beginning and consumers graduated from iPods to smartphones shortly after. As an earlier post mentioned, it’s been over 10 and we’re still waiting for it to catch on.
 
DavidEduardo said:


The demand for new radios is essentially non-existent. What consumers want now are devices that can control the home, play videos and music, tale pictures, make phone calls (with video, too) and send text messages as well as offering games and information. They want a newspaper, cable, radio, a CD player, a camera and a bunch of other things all rolled into one.
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What David said is the bottom line. I would also argue that as with other historical examples, the introduction of HD radio came at the wrong time, not that it is/was necessarily inferior. When finally debuting, the marketing was weirdly confusing, and limited to founding groups open commercial or promo inventories only. Devices like Ipod's were flooding the market. Plus Internet streaming and playlist sharing (pirating) was starting to gain younger consumer interest.

Radio groups thought they needed a "digital" solution. Station GM's liked the concept of having one frequency with multiple formats, assuming it didn't cost much to operate.

Fast forward to today: One small device will help you find your way geographically, companionship (aka hook-ups), web browser, gaming device, book, news source, and TV. When one is driving, just link the phone to your car, or walk around with ear pieces and check out of the world around you.

For those radio listeners (and there are still a lot), most don't pay any attention whether what they're hearing out of their radio is an HD-whatever channel. They know when pressing this preset, they hear a selected format. HD Radio penetration in vehicles is about 20%. That's better than SiriusXM's 1.3% any day.
 
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louisparker said:
Some people choose not to pay for Spotify, but I don’t know of one person that doesn’t know how to stream music on a phone. However, I can count on one hand the number people that have even heard of HD Radio.
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Back in the 80s, people got used to having a radio combined with something else. A radio combined with a cassette deck or CD player. The mistake HD Radio makers made was offering it primarily as a table radio. That's not how people listen to radio. But because the owner of the HD radio patent wanted to charge radio makers for including the technology, most radio makers didn't include it. So ten years later, and most radios don't include HD. It would have been smarter to allow radio makers to include HD for free, get people hooked, and then make money on the back end. But that's not how it was introduced. Radio companies are stuck with the system that exists.
 
It will be interesting to see what happens with the TiVo merger with Xperi. I wonder if that will shake up HD Radio.
 
rbc said:
It will be interesting to see what happens with the TiVo merger with Xperi. I wonder if that will shake up HD Radio.
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Or kill it off entirely. In 1998, Microsoft bought WebTV with no real intention of making it a significant player in internet access. They just wanted some of its proprietary technology, got what they needed, then let the service atrophy with no significant upgrades before finally shutting it down. Maybe that's what TiVo's after here.
 
Virtually all of the comments on HD so far have been surrounding the technology but aside from music quality what does HD provide? You don't need it for sports, talk or any other of the myriad traditional uses of radio. So music is now a niche on radio given the number of outlets that are not radio based.

There might be a genre that takes full advantage of HD radio but if there is I haven't heard it yet. A quality analog FM signal is just fine for any music genre of my lifetime. And I am saying this as an owner of one of the finest HD/mobile sound systems yet put in a luxury vehicle. Given the physics of an FM signal, digital or otherwise, there is not a lot more the industry can do to address the only significant shortcoming - the range. AM HD is homeless so no happiness there either.

I am not anything approaching an expert on the subject but to an ordinary radio listener it seems digital radio has gone about as far as it can without significant new content to draw an audience. I would certainly not pay a penny extra for the technology.
 
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