Fig's take on HD radio.

Call me crazy or gullible like a radio trade mag, but I'm pasting in Bill Figenshu's comments on my "Wakeup Call" post (the one just before this one) below. Fig's one of radio's most respected execs, now consulting. (He supplies his own plug-links below.) I'm doing this not only because I agree with him, and not just to fill the space for free with no extra work (like the trades do--heck, like radio stations do; that's why we loved playing records), or because its flattering when a radio big responds to my modest, self-indulgent ego-blog (that's what my wife calls it), but I'm doing this because even if I'm enabling yet another radio consultant (dude with a briefcase, laptop, cellphone, and a portable radio, more than fifty miles from home) to market his business...this is the kind of thinking the radio guys are going to have to adopt if they're going to thrive in the new media economy. And, I'll add, you're going to have to realize that HD, Web radio, satellite radio, and podcasting comprise your opportunity to improve and promote content. Fig's right, it isn't about technology at all, except as a vehicle for what we always called but seldom produced: compelling programming. And you know what? Content may not be something you get for free, boys. This time the timebuyers can't call the shots: it's the audience, stupid.

OK, Fig, you're on:

Dave,

At the risk of another "standard freebie" here is a thought or 2 in response to your HD radio blog. It has been a pet peeve of mine over the past few months.
Fig

I have been watching with interest the rollout of a few HD radio stations over the past few months. If we're not careful we have a really good chance of making a mistake with this new technology. I believe the next 12-24 months will seal HD radio's fate with consumers. Kenwood is offering an car radio for $400+ in the Cruchfield catalogue. BMW has announced they will offer HD radio in the new 7 series cars next year. Others are here.

But before additional manufactures offer this new service, or consumers decide to buy an HD radio, we better have a talk with ourselves.

With apologies to the gifted engineers who have developed this technology and the masses of talented people who understand how it works, here’s my take on it. ( As any engineer from Citadel & Infinity will tell you, I know just enough engineering to be dangerous.)

Depending on who you believe, we will be able to offer up to an additional 5 channels of audio, data, and “stuff” that will be of digital quality from each of our current FM stations per market. So, in a market like Los Angeles, (with 75 FM signals scattered throughout Southern California) that means an additional 375 channels of audio with a signal strength equal to our current FM station. (for the moment, let’s forget about the AM stations, skywave, and the entire HD-AM issue.) Much more on the subject is available here.

At last, digital audio with the quality of CD’s or better. All delivered within our current analog signal using the same tower and coverage we have now. Great! But this newsletter is NOT about the techie side of HD.

If history is our guide, when it comes to technology, we can conclude " We’re not good at working together."

It's about the MARKETING of this changing technology. We are asking consumers to change their current use of the AM/FM band. Ok, fine!

Except for a small but significant issue. – WE HATE CHANGE!

We stink at rolling out new technology. Quadraphonic? People Meters (PPM) AM-Stereo? Even FM had to be mandated by the government to provide programming different from our AM stations of the 60’s. The FM Band was available in it's present form just after World War 2. We started picking up significant audience in the 70's. (20+ years later)

HD is expensive. (anywhere from 50 to 150k per station is my understanding) That's a big Cap-Ex bill for many broadcasters. But Clear Channel and Infinity along with many major broadcasters are clearly committed to it. And over the next few years it will be rolled out.

So we ARE going forward with it. But lets be honest, there are a few "issues" we must address first. So let's put them on the table.

Has anyone noticed that there are few HD radios out there? How do we get them into the marketplace? Why will people want to spend the money to buy them? What is the marketing plan?

What will we do to attract people to the new band? Quality? I can see many stations simulcasting their AM stations in HD to get people over to HD. There is an obvious quality difference. I recently had the chance to hear 740 KCBS-HD in San Francisco. Crisp, clean, and clear. For AM radio, this could be a good thing. (there is HD-AM but only during the daytime. At night, I'm told, AM stations must go back to analog to protect the skywave interference. This is like TV going to black and white every evening. ) Put the AM station on one of the FM HD channels.

But FM?

In all the research I have seen over the years, NO ONE has ever complained about the quality of a full power FM signal. Are people signing up for Satellite radio or buying I-Pods because of quality? Very few.

It's the content baby!

Are we all prepared to devote massive amounts of air time to get people to STOP listening to our high rated AM&FM stations and go to HD?

Our history as an industry suggests we won’t. We WON’T want listeners to leave our 80+ year old broadcast stations to go to HD. More audience fragmentation? We won't like that! Not one bit!

This will slow the growth of adaptation to the HD band.

How do we market the frequency of the band? Researcher Mark Ramsey has taken a hard line on this. And I think he's right.

(see Mark's excellent blog on many radio subjects here. )

Look for this:

"HD Radio set to botch its first impression.

What to call this thing? Country Kiss-FM HD 2 at 98.7-1? (I can see Dave Michaels trying to come up with a logo for them)

Ugh! that will be tough to brand for sure!" (Mark suggests 1 to 100 similar to the Sat guys. Not a bad idea. )

But here’s the big reason we will struggle with HD:

We will try to put the same programming on HD that is currently on AM & FM. The same type of music, commercials, DJ’s & marketing that drive (or don’t drive) AM & FM will be shoved at consumers in market after market. If this happens, HD will be a slow adapter.

Let's say you have the #1 FM station in the market. (Let's call it uh, Kiss Country 98.7 FM) And we put on the HD band 2 or 3 more versions of "Kiss Country". A "Classic Kiss" and a "New Country" Kiss. Where might those listeners come from? ( your FM perhaps?) Why will they go out and buy an HD receiver? (to get away from your "big" station?) And what will we do about the diary recall for Arbitron? (another bag O' worms)

We must start to employ out of the box thinking to attract the very people that will embrace the new band. Then they will buy HD. If there is a mere digital Classic Rock version of your current Classic Rock station (with loads of commercials and silly DJ’s) why would consumers want to go there? (would someone like to get 12 to 34 year olds back to radio for a change? HD radio may be the chance.)

Do we have the creative thinking to avoid the mistake of our TV brethren? Hmmm, let’s see!

Did the traditional Networks grow Cable TV?

Who developed MTV, CNN, ESPN, HBO, PPV? The Networks? Nah! It was people who were everything the networks were not!

The networks were into protection. They didn’t want anything developed that will take audience from their affiliates. The bosses at CBS knew there should be a news channel on cable. But "Ted" did it first. A channel for youth? Bob Pittman (a former PD at country WMAQ-Chicago when it was owned by NBC) developed it at Warner Cable in 1979. Could he have pitched it to NBC-TV at the time? Would they have approved it?

Quick, name ONE currently successful cable channel developed by the traditional (NBC, ABC ,CBS) TV networks?

We in radio are capable of the same mistake. We may not be developing the best HD "radio" brands. Just re-cycled old programs. This may not be attractive enough for consumers to buy a new car radio for the old Ford Explorer.

What to do? (here’s the part you’re not going to like)

Major companies should create a separate HD Radio Division. NOT attached to the AM&FM Radio division. As current broadcasters we won't want people to leave our traditional stations. We are into protection. It's only natural for us to think that way, but it may not be the best way to grow this new radio band.

With the exception of offering the programming of low power, directional, daytimer, AM stations, the HD Radio division should create brands that are NOT part of the current AM/FM band. (check out on line independent streamers, I-Pod bloggers, and pirate programmers for inspiration).

Remember, there can be as many as 300 additional channels in a major market. So after we put on "Classic Lite" and "50's oldies" , now what? That leaves only about 270 channels left. (ok, so you can put your low power AM station on there. It will fill a few channels. )

Books on tape? (yes, playing the actual books for downloads) Health & Fitness, Technology, All Traffic & Weather Together? A travel channel devoted to your (and other) cities, local dining, home and car repair (done by local repair or classic car fabricators) "how to" stations. Local movie, restaurant, entertainment information, and much more.

The HD Radio Division should NOT generate revenue in a traditional way. (That’s what we AM/FMer's do!) In other words, no screaming car dealers or penis pump ads. A few of us remember when emerging FM station ran 6-8 units per hour. And then, the spots had to have a certain"sound" as not to emulate the AM stations.

David Field, President of Entercom has suggested many broadcasters combine their HD channels to offer pay radio to compete locally with XM and Sirius. Not a bad idea. Trying to get them all in one room could be interesting. Trying to get them to agree on programming choices could be really, really, interesting.

The HD Radio Division should employ mainly people who are NOT currently running traditional AM&FM stations. ( otherwise, “Jack” will have many brothers and sisters.)

If there is innovative, breakthrough, challenging programming, then, positioned and branded properly, and with marketing that give people a real reason to buy these new radios, the band will grow. (hint - there may be new companies formed for the purpose of providing programming ideas to HD stations. Hmmm - wonder who might do that? ( www.figmedia1.com )

We May NOT be capable of doing it. We may need different thinking. We may need a different type of radio programmers, marketers, managers. Are we prepared to compete with our own current AM/FM stations?

(hint - the Sat people, phone companies, Podcasters, and other content providers are!)

We may need help! Are we ready to admit it?

Check here,

( ) Yes, I’m ready for new thinking. Form a group of major broadcasters to tackle the band branding issue in cooperation with iBiquity. Then look to other programming ideas outside of the traditional.

( ) Pretend the issue is not there. Do Nothing!

( ) What! Are you crazy! We can’t afford that. Were using the same overworked staff we have now! If a GM, PD, Sales Manager can run this cluster, they sure can run a few little digital stations. Look, it’s just a matter of hooking up one of those I-Pod things to the transmitter and………

Your response is welcome!

fig@figmedia1.com