Look...if this thing REALLY sucks, you don't need the right lawyer with the righ

[Chuck]

Big A has asked this question. I will second the motion. With the possible exception of NPR stations, are there any HD radio success stories?

Presumably, commercial broadcasters are here to make money. So, who is making money from HD? It has been well over five years since it rolled out. If I recall correctly the IRS only allows three consecutive years to operate at a loss, before they declare your business to be a hobby. So what is it?

Post your success stories; that mean making money, unless you are a Public Radio station, which I acknowledge operate on a completely different set of rules.

 

[TheBigA]

I don't know anyone who is running an HD radio station as its own business. It's part of a bigger business. So it can operate as a loss indefinitely, or as long as the company wants to carry it.

 

[davideduardo]

Presumably, commercial broadcasters are here to make money. So, who is making money from HD? It has been well over five years since it rolled out. If I recall correctly the IRS only allows three consecutive years to operate at a loss, before they declare your business to be a hobby. So what is it?

That IRS condition applies to a narrow scope of individual endeavors. It's intended to keep people who breed dogs from having a nifty way to write off the Dog Chow bill...

Some startups, particularly in biotech and technology burn cash for years and years and years and that is part of their business plan.

The IRS has no say on divisions of a corporation (and nearly every US station is in some kind of corporation) that don't make money... many US AMs operated FMs at a loss for 20 years or more in the 40's through the 60's.

And there are indeed some HDs making money, most of them being those that are leased out for some kind of foreign language or ethnic programming.

 

[Savage]

Yes. IOW: the only return on HD is to convert it into a kind of new digital SCA, an RF ghetto for specialty narrowcasting. For this kind of "broadcasting" sound quality is of almost no significance. So - since we already have SCA - why do we need HD?

SCA is open-source, economical and is a proven technology dating to the late 1950s. It also generates no harmful interference to either the host signal or adjacent channels. Why expensively reinvent the wheel?

 

[pellmell]

Let me ask a dumb question. How does HD radio directly benefit the listener? Most listeners were happy with cassette tapes in car, and now they're happy with MP3s, so the quality benefit only appeals to a very few people. I'm very much assuming.

 

[mmnassour]

<crickets>

 

[hubcity]

Let me ask a dumb question. How does HD radio directly benefit the listener? Most listeners were happy with cassette tapes in car, and now they're happy with MP3s, so the quality benefit only appeals to a very few people. I'm very much assuming.

They pushed the quality benefit early on, but you're right - that's selling spoons at a knife fight.

Choice is a better angle, but most stations (again, with the exception of public broadcasters) are loathe to chip away at their own numbers for the sake of convincing listeners it's worth buying an HD radio.

But, as always, we need define "succeed" - iBiquity defines it as transmitters and receivers sold. I think if they defined it only as "transmitters sold" the service would be a bit more embraceable - both by manufacturers of radios (and/or devices with radios in them) and by the people who buy them.

 

[Chuck]

That IRS condition applies to a narrow scope of individual endeavors. It's intended to keep people who breed dogs from having a nifty way to write off the Dog Chow bill...
<snip>
The IRS has no say on divisions of a corporation (and nearly every US station is in some kind of corporation) that don't make money... many US AMs operated FMs at a loss for 20 years or more in the 40's through the 60's.

I used the IRS as an example of how long they give a business to "get real," and did not mean to imply that stations can't write off this stuff indefinitely. Obviously, it is just another facet of their over-all business. Just like anything else, not all parts of a business are cash cows, but it is always nice when they are.

The real point is it has been 3-5 years since the mass HD adoption, and I don't see much happening in the positive cash flow department. Some people would call that a failure. I'd be interested to hear some specific examples of stations that have turned HD into a positive situation.

Of my personal acquaintances in the radio business, I only have two friends (both station owners) who have adopted HD. Everyone else seems to be avoiding it like the plague. These gentlemen are both very good broadcasters who understand how to run a local radio station. Both of my friends are quite disappointed thus far. They keep spending money, but the best they can do is bonus spots on their HD channels. Why? Because nobody is listening.

And there are indeed some HDs making money, most of them being those that are leased out for some kind of foreign language or ethnic programming.

At this point, leasing the channel for ethnic programming is about the only thing that makes sense. At least, it won’t erode your core listenership on your analog channel. The only other possibility seems to be using it as an STL for one or more analog FM translators. Both of my friends have investigated that possibility, but none are available. Unless the Commission opens up a new filing window, they are out of luck on that possibility.

There is a difference between generating income and making a profit. I read recently that some station had reported generating a whopping $35,000 last year from their HD-2 channel. I'm reasonably sure that was gross, not net, but it was reported as "HD Turns a Corner." Sure, it is better than nothing, but it will hardly pay the electric bill, much less pay for someone to actually program the channel. Let's not forget the on-going Ibiquity licensing fees, music licensing, rent, office overhead and general maintenance. That is a dismal ROI on the sizable investment it took to convert. Given the dismal economy, it is easy to see why people are reluctant to pour more money down the rat-hole.

 

[TheBigA]

They keep spending money, but the best they can do is bonus spots on their HD channels. Why? Because nobody is listening.

Which gets back to the hardware issue. Nobody's listening because no one has a radio. They came up with an idea that required people to buy new radios at a time when no one is buying new radios. They're not buying HD Radios, but they're also not buying satellite, internet, or even AM/FM radios. And it's not because the content on all those radios suck, or because the technology is bad. It's because people aren't buying radios.

 

[Goat Rodeo Cowboy]

..... They came up with an idea that required people to buy new
radios at a time when no one is buying new radios.

..... They're not buying HD Radios,

..... they're also not buying satellite, internet, or even AM/FM radios.

..... people aren't buying radios.

We need for the "smart people" to tell us WHY people are not buying radios.

And then we need to come up with a plan.... that would cause people to actually buy radios.

Or can that NOT BE DONE?

If there is no way people can ever be motivated to buy a radio... the whole industry is destined to crash-and-burn. We should start a lottery around picking the time frame of crash and burn.

I agree with you. As I stated recently... when you tour the retail lindustry and you see that there are NO merchandisers who believe there is any significant traffic in radio purchases... how can one believe there is a future for broadcasting?

But! There are the ratings. The industry points to the ratings over and over again. Look: there is as much listening as there ever was! There is even MORE listening than there ever was.

All the industry needs now is for the FCC or the Justice Department to probe the ratings industry and see if the methodology they are using will pass the smell test. Are they fudging a little bit? Are they fudging a whole-bunch-of-bit?

 

[Chuck]

Which gets back to the hardware issue. Nobody's listening because no one has a radio. They came up with an idea that required people to buy new radios at a time when no one is buying new radios. They're not buying HD Radios, but they're also not buying satellite, internet, or even AM/FM radios. And it's not because the content on all those radios suck, or because the technology is bad. It's because people aren't buying radios.

Most of the radios I see in stores seem to have ipod docking stations built into them. That is not very good news for radio in general, HD or not. If they ae listening to their ipod, they are not listening to radio...

 

[mmnassour]

..... They came up with an idea that required people to buy new
radios at a time when no one is buying new radios.

..... They're not buying HD Radios,

..... they're also not buying satellite, internet, or even AM/FM radios.

..... people aren't buying radios.

We need for the "smart people" to tell us WHY people are not buying radios.

And then we need to come up with a plan.... that would cause people to actually buy radios.

Or can that NOT BE DONE?

If there is no way people can ever be motivated to buy a radio... the whole industry is destined to crash-and-burn. We should start a lottery around picking the time frame of crash and burn.

I agree with you. As I stated recently... when you tour the retail lindustry and you see that there are NO merchandisers who believe there is any significant traffic in radio purchases... how can one believe there is a future for broadcasting?

But! There are the ratings. The industry points to the ratings over and over again. Look: there is as much listening as there ever was! There is even MORE listening than there ever was.

All the industry needs now is for the FCC or the Justice Department to probe the ratings industry and see if the methodology they are using will pass the smell test. Are they fudging a little bit? Are they fudging a whole-bunch-of-bit?

In order to get people to buy a new radio, there has to be something on it they can't get on their old radio. With the exception of the NPR stations, this simply has not happened with HD. There is nothing on commercial HD that is not found on peoples iPods.

They're not buying any radios. Satellite (read: Sirius) decided it needed to be nothing more than a commercial-free Clear Channel. Once again, nothing you can't hear on an iPod.

Large parts of local radio were destroyed in favor of remote-controlled jukeboxes. OOPS! That niche is already occupied by the iPod.

Until radio delivers programming that can't be had elsewhere, it continues to be an also-ran in an increasingly crowded media universe.

 

[TheBigA]

All the industry needs now is for the FCC or the Justice Department to probe the ratings industry and see if the methodology they are using will pass the smell test. Are they fudging a little bit? Are they fudging a whole-bunch-of-bit?

I don't think the problem is ratings. I'm not saying people aren't listening to the radio. I agree that they are, and in big numbers, and radio does have influence. But none of that has anything to do with people buying radios.

There's a difference in buying a device vs. listening to radio. I watch my listeners carefully, and many of them are listening online. If you can listen to radio from your computer, while you're surfing, chatting, or working, then why would you buy a radio? Radio stations have been effective in building up their web sites as a place to go for people to listen. That means they're not motivated to buy new radios. But satellite radio is keping its content exclusive to their radios. And they've stalled out as a result.

Some would say it's a function of content. If the content on the radio was better, more people would buy radios. But the content issue hasn't affected listening. Just buying devices. And as I've said, I didn't buy an HDTV because of great programs or exclusives. I bought it because the device was what I wanted. And electronics manufacturers simply haven't created an exciting radio-only device in 30 years. That, to me, is where the blame lies. The Walkman motivated people to buy. Those cute stilletto radios motivated people to buy. Then everything ground to a halt.

The other point is that 99% of the public already owns at least one AM/FM radio. Most own more than one. So why would anyone buy another one, unless it can do something the others don't?

My view, and there's another thread on this, has to do with installing FM in other devices, like cell phones, iPods, and other portables. Radio needs to become portable again. THAT is the problem.

 

[TheBigA]

In order to get people to buy a new radio, there has to be something on it they can't get on their old radio. With the exception of the NPR stations, this simply has not happened with HD. There is nothing on commercial HD that is not found on peoples iPods.

That assumes people have the ability to load songs on their iPods that they've never heard before. I don't think they do. Most markets have HD channels that offer programming not available on the main channels, and not already loaded in their iPods. The question is: Do they want to listen to music they wouldn't buy?

I disagree with your premise. I didn't have to buy an HDTV. I could have stayed with my old tube TV and used an adapter. But I didn't. I bought an HDTV because the device was different, not the content.

Satellite (read: Sirius) decided it needed to be nothing more than a commercial-free Clear Channel. Once again, nothing you can't hear on an iPod.

Sirius offers lots of live sports that's not on an iPod. Lots of news and information not on an iPod. Howard Stern and Oprah, neither of which are on my iPod. Lots of music features not on iPod. On and on. But even with all that unique content, it's not enough to get people to buy their radios. Most of their subscribers are listening to them via their car radios, not their exclusive portables.

Large parts of local radio were destroyed in favor of remote-controlled jukeboxes. OOPS! That niche is already occupied by the iPod.

That's really not true either. Only a few formats are jukeboxes. The majority are live and local. And then you have news, sports, and talk.

Until radio delivers programming that can't be had elsewhere, it continues to be an also-ran in an increasingly crowded media universe.

We've had this conversation before, and the only programming not available elsewhere is the kind of programming that only a very small minority wants. If mass audiences wanted it, it would be on the radio already. There isn't a single mass appeal form of programming you can name that's not already available in some way.

 

[davideduardo]

But! There are the ratings. The industry points to the ratings over and over again. Look: there is as much listening as there ever was! There is even MORE listening than there ever was.

The ratings industry was investigated in the 60's, and the result is what is now the MRC, an independent board that determines whether to put its seal of approval, or accreditation, to the ratings process market by market.

The principal represntation on the MRC is the advertising industry because the principal use of ratings (and without which usage ratings would not be bought by radio stations and groups) is to establish a pricing metric for the medium measured.

An MRC accredited survey is one which is properly designed and implemented, and the process is re-audited every year. In radio, all but one (Puerto Rico) of the diary markets is accredited and PPM markets are being accredited as each meets the standards set by the MRC.

Interestingly, at a very broad and non-granular level, it's very possible to confirm the approximate shares of the major stations in a market, listening time and such with a sample of less than 100 persons... and I have done it enough times to be confident of that statement.

All the industry needs now is for the FCC or the Justice Department to probe the ratings industry and see if the methodology they are using will pass the smell test. Are they fudging a little bit? Are they fudging a whole-bunch-of-bit?

There is statistical error in everything that not a census. But to try to do a daily census of radio listening would of course be impossible, so we have used some form of a proportional but random sample since the 30's to measure audience.

Since radio ratings are used to evaluate each station's value to an advertiser, it's not necessary to be #1; that's what separates polls with a +/- 3% margin of errror in politics with those in radio. A minor error in radio has very little impact, while in politics it's often the differnce between loosing and winning.

 

[gr8oldies]

Re: Look...if this thing REALLY sucks, you don't need the right lawyer with the

People aren't buying radios because they pretty much have all the radios they need. If people aren't buying couches, its because they already have one.

 

[audioguy]

Re: Look...if this thing REALLY sucks, you don't need the right lawyer with the

People aren't buying radios because they pretty much have all the radios they need. If people aren't buying couches, its because they already have one.

Radio aficionados know that you never really have too many radio sets... just don't tell the wife when you bring home a new one!

 

[Tom Wells]

Do I have to tell her when I bring home an old one? That's my problem, adopting "new" OLD radios.

Honey, it FOLLOWED me home!

 

[tomservo]

iBiquity is gonna have to drastically change their tactics if they want HD radio to really grow.

The earlier posts are right — no one buys a radio just to have a radio anymore. And you can see why: radios are something that are "tossed in" with other devices like iPod docks, clock alarm radios, home theater receivers and even cars. Practically no one is buying aftermarket car radios anymore because the ones included have improved so much.

The point is, to increase HD decoder penetration they have to literally start giving away the product, via integration. Make it cost-negligible to include HD chips on portable devices and ease the licensing restrictions and more products will throw in HD as part of the package. That's how satellite radio has gotten in so many cars, right? They're giving away (paying) automakers to include the things. Very few seem to be buying the portables at Wal-Mart.

The next step is to back off all the fees and license costs for radio stations. They are already having to shoulder the burden of equipment & labor costs to install the service, so give them a break elsewhere. Make the license free, for example. Heck, offer a 20% equipment sale for three months (you buy it, we'll give you 20% of equipment costs when you get your license.) Or better yet, open it up and get rid of the license requirements all together.

 

[TheBigA]

Exactly what I've been saying. However, I don't believe a company like this, where HD radio products and licensing are the main products, can afford to give it all away just on the chance that it will catch on. There needs to be some income from something.