That was the headline that appeared in the Baltimore Sun on January 7, 2004. Unfortunately, unlike HDTV (High Definition Television) HDRadio never stood for “High Definition” radio. And maybe that was the first mistake. HDRadio was simply a name they chose for the digital radio technology.
The iPod was introduced in October 2001. Steve Jobs introduced this music delivery changing device this way. Only a month earlier, XM began broadcasting the first satellite radio programming to be followed four months later by Sirius satellite radio. So by 2004, digital radio was already late to the party.
KZIA-FM Z102.9 saw Kenwood USA sell its first digital receiver in Cedar Rapids, Iowa to take advantage of KZIA-FM’s HDRadio broadcasts. “This is a significant move,” Michelle Abraham, senior analyst at In-Sat/MDR, a market research firm in Arizona, said of the roll-out of digital radio equipment. “It may not seem duly significant in the beginning, but in a few years from now, it will be a huge leap.” The hope was it would prove to be competitive to the newly launched satellite radio offerings from XM and Sirius (now merged into a single satellite company). HDRadio was also seen as improving FM to have CD quality sound and making AM sound like FM. It was heralded to help struggling AM radio stations.
Solving a Problem That Didn’t Exist
What HDRadio did for FM radio stations was solve a problem that listeners to FM didn’t feel existed. No one who listened to FM radio was complaining about the quality of the sound of the transmission. (They were complaining about other things, like too many commercials.) And for AM radio stations, it meant people buying radios for a service that didn’t offer anything they really wanted to hear or couldn’t get from someplace else. AM radio was now the service of senior citizens who already owned AM radios, who grew up with AM radio’s characteristics and whose hearing was not the best now anyway. So HDRadio for AM wasn’t something they were asking for either. Worse, AM radio stations that put on the new digital signal found it lacked the benefits of skywave and often interfered with other company AM radio stations as the industry quickly consolidated radio ownership.
Industries Most Disrupted By Digital
In March 2016, an article published by Rhys Grossman in the Harvard Business Review listed “Media” as the most disrupted by the growing digital economy. Turns out if you’re a business to consumer business, you’re the first being most disrupted by digital. The barriers to be a media company used to be huge, but in a digital world they are not. The business model that media companies depend on has not adapted well to the digital economy.
Education – Disruption Ahead
Having moved from media to education I only got ahead of digital’s disruption for a while. But even those industries that had perceived high barriers of entry are finding those walls crumbling quickly. Grossman says fifty percent of executives see education being impacted in a big way in the next twelve months.
Where Are The Radios?
Edison Research did their latest “Infinite Dial” webinar and the slide that most impacted me was the one about radio ownership. From 2008 to 2016 the percentage of people in America that don’t own a single radio in their home has gone from 4% to 21%. When Edison narrowed this down to household between the ages of 18-34, non-radio ownership rose to 32%. Mark Ramsey’s Hivio 2016 Conference had one Millennial describe a radio set as being “ancient technology.” Ouch!
It doesn’t seem all that long ago that Jerry Lee’s WEAZ in Philadelphia was giving away high quality FM radios to increase listenership to not just his radio station but to FM radio. And KZIA in Cedar Rapids gave away HDRadios to allow people to hear their new signal. It now appears time for the radio industry to begin giving away AM/FM radios every time they are doing station remotes, contests or appearing at venues that will attract lots of people.
Elephant in the Room
But the elephant in the room remains the broken media business model. Newspapers, magazines, radio, and television – any media that is ad supported – will be challenged to find a way to capture revenue to continue.
As Walt Disney famously said “We don’t make movies to make money, we make money to make movies.”
To anyone in ad supported media, we would agree we do it for the same reasons.
The $64,000 question is how.