The ultimate HD radio question

[radiorob2.0]

FM digital promises the wonderful world of HD-2 and HD-3 programming. Many owners and managers have produced sales projections for these new sub-channels but my question is, "Where are you going to find this revenue?"

I've posed this question before and the standard answer is, "The money is out there!" I've done media sales and the pie is already sliced pretty thin when you consider broadcast television along with cable insertion, radio, print and everything else is out there. Radio is planning to increase the stations by a third with HD-2 and the potential of two-thirds if everyone fires up HD-3 and that's not including HDTV and their sub-channels along with the net and whatever "door number 3" might be.

Anyway you shape it, the total amount of sales and ratings equals 100 which means somebody has to give for another to have.

 

[Mike Walker]

Well, one could have asked the same question before Google made billions on advertising! It's about keeping dollars in radio that might have gone to other media (partially), but it's also about defending radio against competition which previously could offer more variety. We all know that HD2 and HD3 stations can be added for little cost. Too little in many cases, as they're often referred to (justifiably so) as "just jukeboxes". But if the programming's right, isn't it better to have more options for advertisers. Hell, even if you GIVE the freakin' spots away, or "bonus" them for a while, it's something concrete you can show the advertiser that he's getting from you that he wouldn't have gotten last year, and can't from many competitors. THAT is the real value, imho, at least initially. Sometimes having a tool to promote the idea of extra VALUE, thus preserving your "slice of the pie" is worth considering...especially since it's not very expensive (to offer the programming).

 

[radiorob2.0]

Well, one could have asked the same question before Google made billions on advertising! It's about keeping dollars in radio that might have gone to other media (partially), but it's also about defending radio against competition which previously could offer more variety. We all know that HD2 and HD3 stations can be added for little cost. Too little in many cases, as they're often referred to (justifiably so) as "just jukeboxes". But if the programming's right, isn't it better to have more options for advertisers. Hell, even if you GIVE the freakin' spots away, or "bonus" them for a while, it's something concrete you can show the advertiser that he's getting from you that he wouldn't have gotten last year, and can't from many competitors. THAT is the real value, imho, at least initially. Sometimes having a tool to promote the idea of extra VALUE, thus preserving your "slice of the pie" is worth considering...especially since it's not very expensive (to offer the programming).

(Sigh)....So in other words, you're giving away inventory. Extra value and bonus inventory doesn't pay the bills!!! But you are right in one area, most HD-2 and HD-3 services are nothing more than glorified jukeboxes (or iPods). Why do I want to lay out money for an HD radio when my iPod is a jukebox that plays what I want and without commercial inventory, bonus or extra value.

My point was you're slicing up a revenue and ratings pie already in slivers. Didn't radio learn a thing when FM became a factor?

 

[Dighton Rockhead]

And while FM rolls merrily along (with FM HD on its coattails)......AM, and especially those AM's not fortunate enough to belong to ownership groups that are, as Edwin Howard Armstrong used to put it "in the front row of broadcasting"......are left to choke on the dust left behind.

And the "short-waving" of the AM band marches on......

 

[Radioman100]

The pie is going to be split whether radio participates in its splitting or not. People today want choices. At least they pay lip service to wanting choices. Despite the overwhelming popularity of the iPod, CHR radio is doing very well. Z100 is #1 in New York again. What does that say about the iPod demos desiring what radio has to offer?

Yes, HD2 and HD3 have the potential to fragment radio revenues, but they also have the potential to keep revenue that might go elsewhere in house and even grow it by pulling some of it from new media players like Google.

 

[davideduardo]

And while FM rolls merrily along (with FM HD on its coattails)......AM, and especially those AM's not fortunate enough to belong to ownership groups that are, as Edwin Howard Armstrong used to put it "in the front row of broadcasting"......are left to choke on the dust left behind.

They have been choking for decades. Of the roughly 1800 AM stations in the top 100 markets, noly about 250 cover at least 80% of the entire metro day and night. The rest are considered unviable and will be minuscule billers or run ethnic or religious shows.

 

[Mike Walker]

I'm not suggesting giving away inventory as a longterm, or even short-term solution to anything. But obviously an audience has to be built before the inventory IS of value. In the meantime it's of value to create the perception of added value. There's nothing wrong with "bonusing" some spots on the new services in the beginning, or if that's too radical, the bonus could simply be that you get "extra" inventory on the new services at a very low price.

HD now is in the situation AM was in the early 20s...an infrastructure has been built, but nobody's much listening yet but radio geeks (in this case, however, minus the crystal earphones).

 

[Play Freebird]

[ Of the roughly 1800 AM stations in the top 100 markets, noly about 250 cover at least 80% of the entire metro day and night. The rest are considered unviable and will be minuscule billers or run ethnic or religious shows.

If 80% coverage of a metro is what it takes to succeed, then the FM HD-2 and -3 multicast channels have an built-in problem.

 

[Mike Walker]

With due respect, PlayFreebird, I have no trouble receiving HD stations 80 miles away with an indoor antenna, and 100 miles without, and I'm way-the-hell outside of the metros of the markets with these stations. But then I have never tried HD in a moving car, so perhaps I should shut the hell up

On another subject, what a great screen name for anybody in radio who lived through "that" era, how many times have we answered the phone and heard "HEY, PLAY FREEBIRD, MAN!" ? "PlayFreebird" is right up there with "RF Burns" in the race for alltime great screen name!

 

[Radioman100]

With due respect, PlayFreebird, I have no trouble receiving HD stations 80 miles away with an indoor antenna, and 100 miles without, and I'm way-the-hell outside of the metros of the markets with these stations. But then I have never tried HD in a moving car, so perhaps I should shut the hell up

It works great in a car here. I'm able to listen without dropouts to about 30 miles out of town on the other side of the metro from the tower farm. The metro itself is more than covered.

Of course, if the 10dB increase in HD signal strength that's being tested now becomes the standard, your HD signals may well go further than the analog ones.

 

[davideduardo]

[ Of the roughly 1800 AM stations in the top 100 markets, noly about 250 cover at least 80% of the entire metro day and night. The rest are considered unviable and will be minuscule billers or run ethnic or religious shows.

If 80% coverage of a metro is what it takes to succeed, then the FM HD-2 and -3 multicast channels have an built-in problem.

Where I have actually monitored on a third generation receiver, the HD signal is usable and robust beyond the 10 mV/m of AMs in HD and the 64 dbu of FMs.. Those are the contours where nearly all (around 95% for most stations) of listening that can be attributed to a fixed location (home and work) takes place, per diary location plotting.

 

[Savage]

10 mv/m is "robust and usable" in AM-HD? Hardly. The CE of a major-market 50kw pioneering HD broadcaster reports that the 6 HD-AM radios in his wood-frame home are ignoring the digital signals with over 15 mv present.

A leading consultant recently calculated that the actual signal strength required under typical nighttime listening conditions is at least 30 mv/m for reliable HD decode. That's assuming no serious skywave interference or local electrical noise that can disrupt the fragile HD data. And we all know how QRM/QRN-free AM inherently is.

If anyone else on this board has ever encountered "robust" HD-AM reception with signal strengths of 10 mv/v please weigh in. And likewise, otherwise.

 

[hipporadio]

And while FM rolls merrily along (with FM HD on its coattails)......AM, and especially those AM's not fortunate enough to belong to ownership groups that are, as Edwin Howard Armstrong used to put it "in the front row of broadcasting"......are left to choke on the dust left behind.

They have been choking for decades. Of the roughly 1800 AM stations in the top 100 markets, noly about 250 cover at least 80% of the entire metro day and night. The rest are considered unviable and will be minuscule billers or run ethnic or religious shows.

The “AM Doomsday Hombre” is back! ...HOORAY! So WHY is he even promoting “defective and DESTRUCTIVE” IBOC technology on the AM band IF its significance is so miniscule and “unviable”? ...Because ANY enterprise of corporate radio is an enterprise INDEED :

[Believe it or not] I once WAS a SIX-FIGURE-earning radio Account Executive at an EXCEPTIONAL operation... The “pie” NEVER transcends one-hundred-percent. Even assuming the UNLIKELY—that HD-2 and HD-3 services [with their spotty reception and dubious audio quality] receive ANY significant audience tally – ANY revenue will come at the expense of their main-channel “Brother”. So much for “R.O.I.” when you're writing those royalty checks to Daddy-iBiquity, ASCAP, BMI, and soon-maybe—the RIAA!

 

[Radioman100]

[Believe it or not] I once WAS a SIX-FIGURE-earning radio Account Executive at an EXCEPTIONAL operation... The “pie” NEVER transcends one-hundred-percent. Even assuming the UNLIKELY—that HD-2 and HD-3 services [with their spotty reception and dubious audio quality] receive ANY significant audience tally – ANY revenue will come at the expense of their main-channel “Brother”. So much for “R.O.I.” when you're writing those royalty checks to Daddy-iBiquity, ASCAP, BMI, and soon-maybe—the RIAA!

The "pie" regularly exceeds 100% at stations that think outside the box. This is what successful NTR campaigns are all about.

The company I work for makes money selling ads on our web streams. This is additional "pie." HD is potentially additional pie too.

 

[radiorob2.0]

[Believe it or not] I once WAS a SIX-FIGURE-earning radio Account Executive at an EXCEPTIONAL operation... The “pie” NEVER transcends one-hundred-percent. Even assuming the UNLIKELY—that HD-2 and HD-3 services [with their spotty reception and dubious audio quality] receive ANY significant audience tally – ANY revenue will come at the expense of their main-channel “Brother”. So much for “R.O.I.” when you're writing those royalty checks to Daddy-iBiquity, ASCAP, BMI, and soon-maybe—the RIAA!

The "pie" regularly exceeds 100% at stations that think outside the box. This is what successful NTR campaigns are all about.

The company I work for makes money selling ads on our web streams. This is additional "pie." HD is potentially additional pie too.

Hippo gets it, Radioman not so much. HD-2 and HD-3 revenue potential has been the fallacy of "the money is out there" and "if we build it they will come". If I were an owner, I'd find better used for the six figure investment of HD radio equipment not including the increased operating cost and the extorti..I mean royalty payments to iBiquity.

 

[hipporadio]

...HD-2 and HD-3 revenue potential has been the fallacy of "the money is out there" and "if we build it they will come"... the investment of HD radio equipment not including the increased operating cost and the extorti... I mean royalty payments to iBiquity.

THANK-YOU RadioRob for observing mere common sense—a concept in lagging supply within the HD Enthusiasts Club... NOW— they’re even floating the fallacy that “a pie” can become “a pie-and–a-half”—just because of the jukeish and seldom-locked “stations between the stations” :

Hey... SAY IT, ROB... E-X-T-O-R-T-I-O-N—that’s what it is... Is it ANY less-gratuitous than their label: “HD Radio”?

BTW... I call it: “Contributing to the delinquency of a minor”—very minor.

 

[LinoNYC]

[Believe it or not] I once WAS a SIX-FIGURE-earning radio Account Executive at an EXCEPTIONAL operation... The “pie” NEVER transcends one-hundred-percent. Even assuming the UNLIKELY—that HD-2 and HD-3 services [with their spotty reception and dubious audio quality] receive ANY significant audience tally – ANY revenue will come at the expense of their main-channel “Brother”. So much for “R.O.I.” when you're writing those royalty checks to Daddy-iBiquity, ASCAP, BMI, and soon-maybe—the RIAA!

The "pie" regularly exceeds 100% at stations that think outside the box. This is what successful NTR campaigns are all about.

The company I work for makes money selling ads on our web streams. This is additional "pie." HD is potentially additional pie too.

In NYC if you are fan of; light A.C., deep cut classic rock, Country, All70's, All80's or want an additional full-time Classical -you are out of luck on main channel FM. These and more do exist on HD channels.

As for the "“pie” NEVER transcends one-hundred-percent" argument, consider if you are a fan of one of these genres -do you think you'll settle for hip-hop, hot AC or Spanish? NO, You'll "roll your own" and be lost to radio.

The pie can most certainly exceed the current 100% if you can retrieve some of those listeners from Satellite or custom media.

Lino.

 

[Radioman100]

Hippo gets it, Radioman not so much. HD-2 and HD-3 revenue potential has been the fallacy of "the money is out there" and "if we build it they will come". If I were an owner, I'd find better used for the six figure investment of HD radio equipment not including the increased operating cost and the extorti..I mean royalty payments to iBiquity.

I'm glad I don't "get it" if getting it means resigning yourself to the belief that you can only achieve just so much.

I'd really hate to be locked into that narrow mindset. It really limits your potential.

I bet the AM owners that could have had a prime FM allocation in the 50s and 60s but thought they could find a better use for that six figure investment spent a lot of time kicking themselves later on.

Lucky for you guys, you won't really have to pay for your own narrow-mindedness like they did. More savvy broadcasters will blaze the trail for you, and you'll be able to enjoy the fruits of our labor and our investment when you eventually add HD Radio to your stations. You may be held back a bit, because our HD channels will have already gained a foothold, but it won't be quite the catastrophe that passing on an FM license was.