Thoughts on Radio’s Digital Transition
So How Are We Doing: A Conversion Reality Check
Welcome and thanks for finding your way to my initial online column, ‘Thoughts on Radio’s Digital Transition’. My intent is to fairly regularly put fingers to keyboard and give you all a candid inside view of what we at iBiquity are thinking and doing to speed AM/FM’s conversion to digital.
Importantly, I’d love your feedback. It’s thoughts@ibiquity.com. I read them all and try to respond to everyone but the truly loony and those peddling commercial real estate. I commit to consider all the feedback I get, and to bring interesting viewpoints into future columns.
I’ve been inspired in this effort by many in radio who write regular opinion pieces, so let me give them their propers. Peter Smyth, Paul McClain, Fred Jacobs, Dave Martin and the Edison guys have great thoughts with which I generally agree. I regularly read Mark Ramsey and Jerry Del Colliano too, usually fundamentally disagreeing but always being entertained. There are many others adding to this healthy debate. The passion of radio people never ceases to amaze: it is a great strength and may be our saving grace.
So with that intro behind, as a first topic, let me try to answer the simple question I get asked the most: ‘how’s it going?’ In a word, fantastic.
That answer may surprise some, given a lot of the contrasting opinions out there. No one is better at beating up radio than radio people. I will qualify my assessment by highlighting the reality that there is a long way to go. More on that later.
First, the fantastic part.
Broadcasters have built a comprehensive HD RadioTM broadcasting infrastructure, with almost 1800 stations on the air covering more than 80% of the population. Almost 50% of radio listening takes place on stations which have converted to digital. Big markets like NY, Chicago, LA, Detroit and Washington are saturated with 20 to 30 HD Radio stations. On average, one station every day converts. More than 800 stations have new HD2s and HD3s pumping out diverse content. Two years ago, when I pushed a receiver manufacturer or retailer or automaker to include HD Radio technology in their mix, the overwhelming response was ‘why would I do that when there are no stations on air?’ I rarely get that pushback now.
We have more, better, cheaper HD Radio receivers being widely distributed. More than 60 different types of HD Radio receivers are available in all segments – OEM and aftermarket car, high end stereo, home and table top. Recognized brands like Sony, JVC, Yamaha, Jensen, Panasonic, JBL and Polk are selling product. Prices have come down to the $79 level (we were at $199 two short years ago). And those products are available at more than 12,000 storefronts across the country. Go into a Best Buy, Circuit City, Wal-Mart, Target or Radio Shack, as well as many regional retailers, and you will find HD Radio receivers (granted, you may have to ask a few times).
The car momentum is accelerating. BMW and Mini offer the technology across their full lines. In the past twelve months we’ve had announcements from Ford, Volvo, Hyundai, Mercedes, Toyota’s Scion, Jaguar and Land Rover about their HD Radio launch plans. Most of these automakers will be rolling out HD Radio equipped vehicles this year, so stay tuned for that, as well as more auto announcements.
I could go on about new applications and money making opportunities for broadcasters like multicasting, iTunes Tagging or instant traffic distribution, or the progress on getting into portable devices, or the exciting international scene, but let me save some of that for future columns.
I look at all that progress in a fairly short time and get tremendously excited. When I read some of the strident HD Radio critics, I am reminded of the Seinfeld Superman Bizarro world episode. Things will never be perfect and legitimate criticism is helpful, but doing so by ignoring the tremendous momentum described above is delusional or dishonest.
But there is still a lot to do and we are a long way from clinking champagne glasses. Our industry must keep converting stations, putting quality HD2 and HD3 programming on, and promoting the digital upgrade to our listeners. We can’t stop with dozens of radio SKUs, we need hundreds. The retail scene has gotten better, but we have a long way to go on sales floor knowledge, merchandising and product demonstration. And we need to be in all cars, every last one. These are our challenges and objectives, and we won’t quit until we have attained them.
But we all have to recognize that for an industry that has been around almost 100 years, a total upgrade will be a long term proposition. Think of how long every other mass media upgrade has taken – black and white to color TVs, AM to FM, and most recently, digital TV, even with a conversion mandate. Comparatively, the HD Radio transition stacks up quite well.
A little history lesson, which was given to me by one radio’s legends, Jerry Lee, may be helpful. FM broadcasting was approved by the FCC in 1940 and was given its current frequencies in 1945. Jerry put WBEB on the air in 1963 (I remember that because it is the year I was born). There were no FM receivers available, so Jerry had some manufactured and gave them to his listeners. Oh, they only tuned to ‘BEB.
You know how the story ends. After years of broadcasters giving away their FM licenses and consumers enduring AM simulcasts, some smart programmers got busy. By the late ‘70s, FM had taken over as the dominant listening medium.
So when I hear a naysayer urge me to throw in the towel, I chuckle and think that’s like pushing to shut down FMs in 1967. We now know that would have been ludicrous back then, and it’s just as silly now.
Every other consumer medium is digital already or on a strong path to get there, and radio cannot be stuck in the analog world of the last century. Our future is digital – online and over the air. I’m encouraged by our progress and hope you are too. We will get there together.
Thanks for reading, and let me know what you think.
All good things.
Bob Struble
Columbia, MD
July 2008
