HD Radio: too little, too late

Mark Ramsey must be a really nice guy. While he's critical of various aspects of the HD Radio situation, he has tried hard to make his criticisms constructive and not alienate radio colleagues who are working on it. His latest effort over at Hear 2.0 is a list of things that are wrong with the $200 million HD marketing and promotion campaign. I think he is missing the core issue. I posted this along with the comments:



The problem lies not in the details of the marketing campaign, but in the deficiency of the value proposition for listeners.

Satellite has succeeded (sort of) not because they spent $200M on promotion (they did) or executed the rollout perfectly (they didn't) but because the service itself offered listeners a better value proposition: a cable system sized banquet of radio channels (including dozens of neglected music formats), little or no advertising, 100% coverage of areas that were underserved by terrestrial radio, and a truly national service.

So the cost of the new hardware and the subscription was compensated by a strong, unambiguous value proposition: more content, desired content, uninterrupted content, national coverage. It all adds up to being worth the $12.95 a month for many millions of people.

What about online radio? Now you have tens of thousands of channels: a mind-boggling array of niche and specialty content in addition to deep choice of mainstream formats. In many cases, you have fewer or zero commercials. You have on-demand access and deep archives. You have asynchronous subscription delivery, aka podcasting. And you have ubiquitous wired access, with wide-area wireless Internet rolling out starting last year on the 3G cellular nets. And now the hardware cost is rolled into your smart cell phone, which is being upgraded every 2-3 years on average anyway.

One more benefit that's not user-centric but should get the attention of broadcasters: online provides a more flexible, more powerful platform for delivering advertising. Ask Google.

Face it, folks...when you add it up, HD Radio as a platform will never be competitive with satellite or Internet radio on a value for value basis for the end user.

All you can hope is that AM and FM will decline slowly enough that radio stations and producers can adapt to new media delivery methods while they continue to operate their old franchises. HD radio is not a new method: it's good old single channel point to multipoint local broadcasting in digital drag. It can barely provide time-shifting of favorite shows, much less the other listener/viewer value enhancements that are driving the Internet media explosion.

HD will fail to get a meaningful level of uptake, and it will waste more time and money in the process. Incumbents are stubborn that way. Broadcasters who access the situation correctly already have better places to put their development energy. I'm really sorry for the folks at iBiquity. They've worked long and hard, but the bar has been raised beyond the ability of conventional broadcasting to compensate.

HD radio is just too little and too late.

Comments

[Greg]

Stephen,

You are right about Mark Ramsey - a REALLY smart guy, who is just trying to be nice to the broadcast industry. Having done much research myself on HD Radio/IBOC, I can now see, that Wireless Internet and Internet Radio over cell phone networks especially, is going to kill HD Radio. Wait also, when WiMax connects WiFi hotspots - HD Radio is already old technology, that is a dead horse, even before getting out of the starting gates.