Tag Archives: Sirius Satellite Radio

HD Radio – The Answer to the Question No One Was Asking

I was reading about how HD Radio was celebrating its 15th birthday recently and that had me scratching my head as HD Radio is older than that. In checking the records, I saw that the Federal Communications Commission selected HD Radio as America’s digital standard in 2002. By comparison, Steve Jobs introduced Apple’s iPod in October 2001, XM Satellite Radio began service in 2001 and Sirius Satellite Radio in 2002.

Radios Go High-Definition

This was the headline that appeared in the Baltimore Sun on January 7, 2004. Unfortunately, unlike HDTV (High Definition Television) HD Radio never stood for “High Definition.” And possibly that was the first mistake. HD Radio was simply a name they chose for the digital radio technology, but even today, many people still think it means “High Definition” or “Hybrid Digital.”

Sadly, by 2004, America’s digital radio was late to the party and if the industry is now marking the date of 2006 as its moment of birth, it was really late!

Remembering 2006

In 2006, Facebook opened up its social network to everyone in the world. The original requirement that you be a college student enrolled at a specific university was eliminated and the only requirement now was that you were over the age of 13 and had a valid email address.

In just 15-years, Facebook has grown to over 2.85 billion active monthly users.

Let’s look at what else was born in 2006 that competes for our attention:

  • Twitter was launched in 2006 and today enjoys 199 million monetizable daily active users.
  • Wii game system was introduced with its handheld motion controller that got families off the couch and in motion doing all kinds of sports in front of the TV.
  • PlayStation 3 came online to provide strong competition to XBOX 360. (Video gamers spent about eight hours and 27 minutes each week playing games, which is an increase of 14% over 2020. The video gaming industry predicts revenues of $100.56 billion by 2024)
  • Google bought YouTube in 2006 and now has over 2 billion users, the channel grosses over $19.7 billion in revenue and users are uploading videos at the rate of 500 videos per minute with over a billion hours/day spent watching videos on the platform.
  • The one billionth song was purchased from Apple’s iTunes, the dominate source for music lovers in 2006. (Two years later Spotify would arrive and not only disrupt how music was sold but how it was listened to in general.)

When we look at 2006, it becomes easier to understand why HD Radio wasn’t such a big deal to the average media consumer.

Solving a Problem That Didn’t Exist

What HD Radio 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, 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 elsewhere. 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, HD Radio for AM wasn’t anything they were asking for and 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 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, meaning that the business model that media companies depend on has not adapted well to the digital economy.

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 operating.

Walt Disney famously said “We don’t make movies to make money, we make money to make movies.”

Broadcasters of my generation had that same attitude about creating great radio.

Do the people owning and operating today’s radio stations still embrace that concept?

* In 2021, it’s estimated there are 3.78 billion social media users worldwide.

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Radio’s History of Feeling Inferior

Family Listening to Golden Age of Radio“There are some things that will scare you so bad, that you will hurt yourself,” said Molly Ivins. And that’s exactly what I believe the radio industry has been doing to itself for most of its 100-year history.

The Golden Age of Radio

The first golden age of radio was during the 1930s and 40s, and was a period when over-the-air commercial radio was sewn into the fabric of American’s daily lives. It delivered the day’s news and provided entertainment to people struggling with the effects of the Great Depression and a second world war.

Here comes TV

Television was introduced to America at the 1939 New York World’s Fair with a live broadcast of President Franklin Delano Roosevelt opening the fair on NBC’s experimental station W2XBS in New York City.Family Watching TV

Unfortunately, the development of television in America was halted by Japan bombing Pearl Harbor on December 7, 1941 and bringing the United States into World War II.

When the war ended, there were only six television stations on the air in America, three in New York City, one in Chicago, one in Philadelphia and one in Schenectady, New York.

The number of television sets in use in 1946 were about 6,000, but by 1951 that number grew to over 12 million, and by 1955 half of all homes in the United States had a black and white television.

Radio’s Over Because of…

Radio’s inferiority complex began with television, and probably for good reason. Television stole radio’s prime time programs and right along with it, it’s listeners. Worse, radio’s big station owners and radio networks, CBS and NBC, would use radio’s revenues to fund the development of television stations and TV networks.

There were many who predicted that television would be the demise of radio broadcasting.

This was the first known case of “radio’s over because of…”

What’s Killing Radio, Let Me Count the Ways

I worked in the radio industry all of my professional life. Other than earning money as a professional musician early in my working life or as a Broadcast Professor at the end, radio has been my source of income and my love.

During that time, I would hear about the latest new technology that was going to put radio out of business.

  • TV was going to be the end of radio
  • FM was going to be the end of AM radio
  • CB Radios were going to be the end of commercial radio
  • 8-Track Tapes were going to be the end of home & car radio
  • Cassette Tapes were going to be the end of home & car radio
  • Compact Discs were going to be the end of home & car radio
  • MP3s were going to be the end of home & car radio
  • Satellite Radio was going to be the end of radio
  • The internet was going to be the end of radio
  • iPhones/iTunes were going to be the end of radio
  • Pandora & Spotify et al were going to be the end of radio
  • YouTube was going to be the end of radio

Have I missed any?

FCC Symposium Sees Radio Industry Challenged by Competition and Regulation

The FCC held a symposium at the end of 2019 to solicit things it needed to be addressing for the health of the radio industry. Fingers, by the invited panelists, were pointing in every direction, but at themselves.

The radio industry believes it can make itself better by more consolidation and less regulation. Yet when I look at the history of radio, its most successful years were during a time of intense regulation and severe ownership caps.

However, it amazes me that the only answer offered continues to be the same one, that to my eyes and ears, got the radio industry into this predicament in the first place.

Don’t it always seem to go
That you don’t know what you’ve got
‘Till it’s gone.
They paved paradise
And put up a parking lot.

-Joni Mitchell

What’s Radio’s Real Problem?

radio signWhen television came along and took away radio’s people and programs that were attracting its large listening audience, it was forced to re-invent itself.

Radio dropped its block programming and began programming music. The transistor made radio portable. Radio personalities, promotions and new music made radio exciting to a whole new generation of listeners.

One of the people at the FCC’s symposium was Karen Slade, VP and GM of KJLH Radio in Los Angeles. Instead of the 30,000 foot view of radio’s current situation being shared by the radio owners and CEOs, she said she saw the problem from about ten floors above street level. She said her radio station had 500,000 listeners but that she was trying to reach more listeners through a variety of other platforms. My question is why?

For my entire radio career, I don’t think I ever managed even a cluster of radio stations that delivered that many total weekly listeners. Yet, my radio stations were very successful.

I managed a radio station in Atlantic City that had about a tenth of that many listeners and still delivered a million dollar bottom line to the stakeholders, plus we delivered results for our advertisers.

Radio’s real problem is not investing in what it already owns. Radio instead thinks the grass is greener in someone else’s media playground.

Smart Speakers

Forbes says smart speakers are the future of the audio. AM and FM radio is available via smart speakers, but so isn’t the entire world of audio content.

It’s estimated that smart speakers will be in 75% of American households in five years. Smart speaker reach had already passed a tipping point, before this past Christmas’ robust speaker sales, with 41% of American homes owning at least one of these devices.Child using Smart Speaker

So, what makes a smart speaker owner choose an AM or FM radio station’s content to listen to versus a pure play or even TV audio content? Let me use television as an example to demonstrate what I think matters.

Why does Stephen Colbert’s Late Show reach 3.1 million nightly viewers versus the 1.8 million viewers that both Jimmy Kimmel and Jimmy Fallon combined reach? Each of these shows look pretty much the same on paper. The difference can be found in the personality that presents the various program elements.

Radio stations used to understand how important the air personality was to the success of the station and its revenues. Radio promoted its air personalities on billboards, buses, on TV, direct mail and in print.

George Johns wrote about the time he hired a competing air personality in his market and paid him to sit on the beach for a year to wait out his non-compete contract. At the end of the year, he put him on the air in morning drive on the radio station he owned and was rewarded with huge ratings and revenues.

When Larry Lujack moved between WCFL and WLS in Chicago, his listeners and revenue moved right along with him. They didn’t call Uncle Lar “Super Jock” for nothing.

Mel Karmazin knew that Howard Stern would change the fortunes of Sirius Satellite Radio when he hired him away from his over-the-air commercial radio network. While Howard and SiriusXM prospered, his former radio properties became a shadow of what they once were.

Everyone I know who ever fell in love with radio growing up, has stories about the radio personalities that they couldn’t live without. My students at the university told me they would listen to their hometown radio personalities on streams in their dorm rooms.

Sadly, it seems like every day I’m reading about tenured radio personalities being let go. The very people who spent years building an audience are disappearing.

As Molly Ivins saw so clearly, sometimes there are things that scare us so badly, we hurt ourselves.

 

 

 

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