Video Was Framed, Radio Committed Suicide
By Dave Wilson
Investigators looking into the death of radio have concluded that the Buggles were wrong.Video was not the culprit.Neither was satellite radio, nor the music industry,as radio’s 911 call led many to believe. It now appears that radio’s wounds were self inflicted, and the obvious question many are asking is, “why?”
Of course radio is still alive and strong today, but the preceding paragraph could easily be the beginning of free local radio’s final chapter, written sometime in the future. Let’s consider how radio could be the cause of its own demise.
USA Today recently reported that consumer adoption of HD Radio® has been slower than some expected. HD Radio is the technology that free local radio broadcasters are counting on to bring them into the digital age. It allows each local radio station to broadcast a digital signal along with its analog one. This is somewhat similar to the way cable companies are now providing phone and internet service over the same cables that bring TV service into your living room. Digital signals are squeezed into a “pipe” that used to carry nothing but analog.
The USA Today article may be slightly misleading, for CEA’s own research suggests that consumers are not passionate about AM/FM receivers in general. That is, perhaps the “HD” has nothing to do with it. In late 2007 CEA conducted a study to help it predict what products would be most in demand during the important holiday shopping season. People were asked what consumer electronics product they would most like to receive as a gift. They were not prompted with a list of pre-selected choices. The number one response? Portable MP3/digital audio player. Among the other audio-related responses were in-dash satellite radio and satellite radio generally in no specific form. Smart phone, cell phone and iPhone® were also mentioned. What percentage of people said they wanted an AM/FM tuner? Zero. An AM/FM receiver? Zero. An AM/FM radio for their car? Zero. A clock or table radio? Zero. A portable AM/FM radio? Zero. Perhaps consumers’ interest in free local radio, in general, is waning.
And who can blame consumers? Let’s consider the things drawing them away from free local radio. Satellite radio offers hundreds more channels than free local radio. Internet radio offers thousands more channels than free local radio. GPS devices let consumers get traffic and weather information instantly, without having to wait for the next report on free local radio. And the list goes on. Competition from new services and radio’s own lack of expansion are the main reasons consumers are looking elsewhere.
As an industry radio has traditionally been afraid of expansion and terrified of new competitors. Of course fear of new competition is natural, but new competition is a fact of life that everyone must deal with. Unfortunately, it seems to me that radio sometimes deals with it by running to the government and requesting regulatory roadblocks that will keep new competitors at bay. While that may seem wrong to some, at least we can understand radio’s fear of new competition, and it’s not like it’s the only industry that seeks government interference in the free market for the purpose of blocking competition.
What’s hard to understand is radio’s fear of expansion. Eighteen years ago its trade association hatched a plan to have new spectrum allocated for radio so that radio could expand and grow into the digital age. But the industry revolted, largely because such a plan would have narrowed the difference in signal quality between the highest powered FM stations and the lowest powered AMs. That’s right, radio tends to oppose improvements in its own service that would enable stations with poorer coverage to gain too much competitive ground on stations with great coverage, or that would allow new local programming to come on the air. [Pohlmann, Ken C.; Principles of Digital Audio; McGraw-Hill Professional; 2005; p. 647]
It seems to me that radio’s desire to block new competition at all costs, including lack of expansion of its own service, may have an unfortunate side effect – a loss of focus on radio’s own customers. My concern is best illustrated in this quote from Bob Botik, a broadcaster, in the early years of digital radio development. “What is under debate here is not what is logical or simple or in the best interest of all, but what is best for America’s current owners and operators, screw the rest of the world.” [Huff, W. A. Kelly; Regulating the Future: Broadcasting Technology and Governmental Control; Greenwood Publishing Group; 2001; p.77] When you separate people into two groups, America’s current radio station owners and everyone else, I’m afraid that consumers fall into the category of everyone else. Taking care of customers is the key to any business’ success.
What’s amazing to me is that even after all this time, with all of the new competition that radio faces, the industry seems to be taking additional steps to prevent its own service from expanding. The wireless industry is out there buying up as much spectrum as it can to provide wireless internet service everywhere, most recently buying up UHF TV spectrum that will be vacated next year when analog television is turned off. Soon wireless spectrum will be used even more effectively as direct competition for radio’s drive time listeners. There are thousands of internet radio stations out there, and hundreds of satellite radio stations. Yet radio actively opposes any efforts to obtain new spectrum that would enable it to provide better service to consumers. Just this summer the NAB Radio Board adopted a resolution opposing the use of television channels 5 and/or 6 for radio broadcasting after analog TV signals are turned off. Think of the great new services radio could provide if it were to unleash the full potential of HD Radio with 100 percent digital service in channels 5 and 6, or in some other spectrum.
Radio’s like a ball team whose players are all focused on their individual stats, out there competing with one another. I fear we don’t care enough about the team winning, and I know we should be focusing on the fans because the other teams keep scoring and we have to wonder how much longer the fans will keep showing up.
Radio needs to focus more on serving today’s modern consumers — no one wants to read its obituary any time soon.
Editor’s Note: In addition to being Sr. Director, Technology & Standards at CEA, Dave Wilson is also the owner/operator of two FM radio stations on the North Carolina coast.
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August 12th, 2008 at 3:44 pm
Dave, this is one of the most insightful commentaries I’ve ever read on the state of radio. Excellent piece.
August 13th, 2008 at 9:34 pm
Dave I would look at your own house first it not like the consumer electronics industry is doing so well
Oh forgot I did not mean the overseas companies that are your main members by the way did Matsushita AKA panasonic go out of business yet? The Koreans are doing great
August 14th, 2008 at 8:42 am
I think one problem that radio faces, as well as television, newspapers, even public libraries, is that each feels it’s in the radio, television, newspaper or library business, respectively. All might do better if they thought of themselves as radio or TV stations, newspapers or libraries in the “Information, Entertainment and Enrichment” business. The public has many more options today to obtain the information, entertainment and enrichment that it needs. Service providers, like free radio, aren’t likely to disappear, but their slice of the pie will just keep getting smaller unless they begin to capitalize on the opportunities that are emerging.
August 18th, 2008 at 7:51 am
The sad fact is that many of us in the radio business know you’re right, and some have been saying this all along. I wrote a letter to the Editor in Broadcasting Magazine in 1989 suggesting that the radio industry had its head in the sand and should aggressively plan for use of the TV spectrum that would be available in the future, among other ideas. There is no shortage of talent or money to keep radio great. What seems to be missing is the PASSION to improve the performance of the industry. What will it take to get that back?
August 18th, 2008 at 9:38 am
To state that radio is on the decline because nobody requests am/fm radios as gifts is a ridiculous argument. Radios are ubiquitous…they have reached saturation. Your argument is like saying coffee is doomed because nobody is asking for coffeemakers for Christmas. People don’t request commodities. AM/FM radios are a commodity.
This is about programming content.
The source of radio’s biggest problem can be traced directly back to the Telecommunications Act of 1996. When major corporations were allowed to purchase huge blocks of stations, the quality of the programming plummeted. Air personalities in San Antonio are voice tracking programs that run in San Anselmo. Radio is about locality, and that is rare these days.
Homogenization of programming saves the company money and increases short-term stockholder value, but in the long run, it results in lower numbers and less-loyal listeners. Creativity and localization in programming is the only thing that will increase local radio listenership.
But don’t look at radio sales figures as an indicator. I have a flashlight that picks up my local stations. This is about content, profit margins and bad legislation.
August 18th, 2008 at 11:53 am
Brent, well said, and I was just thinking the same thing. I already have a clock radio in both bedrooms, one in the bathroom, one in the living room, two in the kitchen, one in the garage, one in the car and one in the van. Would a new radio be at the top of my wish list? Of course not, and I’m a station owner!
So why are broadcasters not flocking to HD/digital technology? First, it’s prohibitively expensive for those of us in micro markets. Expensive to buy into, and the licensing fees make it expensive on an ongoing basis. Most stations who’ve made the jump to HD run a jukebox on their new channels… there’s no big investment in programming that won’t show a return to the bottom line for many years… nobody’s listening because there’s no compelling programming to make them go out and buy a new receiver… stations makea no money off advertising, because nobody’s listening to the new channels… chicken and egg, but it’s creating a stillborn technology.
I will tell you that my little AM/FM combo are respected in my little town because we do what no one else in the market does… local news, local sports, local play-by-play, with a professional presentation. Local isn’t the be-all, end-all for every station, but every station had better be serving their share of the market with something more than 10-in-a-row.
Sorry, CES, the technology is secondary. If we as broadcasters are providing local service to our local market, the market will respond. If we’re not providing something of unique value to our listeners, they’re gone, and so are we, regardless of the form of delivery.
August 18th, 2008 at 12:56 pm
Dave, sometimes we all need to step back and go to the 60,000 foot level (not just the 30,000 foot level). This article did that. Great insight (nice “content”).
August 18th, 2008 at 5:02 pm
I have lived in the Washington DC area since 1965. When I first arrived here I had problems deciding what to listen to on the radio as there was so much excellent programming.
By 2000 I had purchased an expensive rooftop FM antenna so that I could receive Baltimore stations (especially WBJC) as Washington radio had deteriorated to the point that I was no longer listened.
By 2005 I had purchased a satellite radio. I have totally given up on terrestrial radio. I now have 4 satellite subscriptions & am happy but what a shame.
Mr. Wilson: Thanks for your comments.
August 19th, 2008 at 12:34 am
Excellent article! iPods, iPhones, cell phones, Satrad, the Internet, and personalized music services such as Pandora, Last.fm, Slacker, and Jango are killing music-oriented radio. News/talks/sports on the larger 50kw AM stations remain healthy, as ratings on music-oriented FMs will decline. In-dash iPod connectivity in in high consumer demand. Soon, in-dash Internet will be commonplace. However, there is zero consumer interest in the farce called HD Radio:
http://hdradiofarce.blogspot.com
August 19th, 2008 at 3:43 am
Right on the money Dave … too much of our commercial radio is a content free zone and that is turning people into seletive users hence the desire for MP3 players etc and not receivers. If all radio can offer is more of better fidelity music channels then we can all pack our bags for Queensland retiurement villages. People want control over music … we as providers of radio services need to get back to serving audiences with rich, intelligent and relevant content. Radio should be more than a juke box MP3s do that better.
August 20th, 2008 at 6:40 am
Very insightful. And the responses are also thoughtful, for the most part.
A star-crossed future, an audience who finds further distractions every day, and an ownership with little focus on anything beyond the next quarter’s financials.
Radio broadcasting, one of the great loves of my life, is slowly becoming a stranger to me.
August 20th, 2008 at 9:42 am
Right on! Let’s get some engineers on the Commission and wake up the regulators and broadcasters (I’m one.) This HD is crazy, useless and causes broadcasters to violate the Rules of the Commission. The FCC is supposed to decrease interference so that more people can listen to radio; the HD Rules cause much more interference and decrease previous service areas. Drop HD now. Open new bands now. Decrease station ownership levels SAP to reasonable levels, say total 25 to 50 range with no more than 1 AM & 1 FM per market and only 1 translator per station. Delete all satellite fed-only translator stations. THEN, the broadcasters would have to go to work and serve their communities. Competition is good; give everyone a chance with no minority quotas.
August 21st, 2008 at 3:57 pm
I appreciate all of the comments in response to my article. A few of you take me to task on several points, so I’d like to offer some follow-up comments.
RL Adams, I don’t really understand what you’re trying to say. I can tell you that CEA doesn’t have “main” members. We simply have members, and we love them all.
Brent Walker and Dennis Switzer, radio’s a commodity? Like toilet paper? I actually agree with you that AM/FM radios are a commodity. Where I disagree with you is that you seem to think this is a good thing. Furthermore, you also seem to imply that because AM/FM radios are a commodity they will always be everywhere, like milk and oranges. I’m afraid I disagree with you on this point, too. People have to eat. People don’t have to listen to AM/FM radio. There are plenty of examples of commodities for which consumer demand dried up. Remember the cassette player? It won’t be long before people are asking, “remember the CD player,” too. How about dial-up computer modems? You get my point. Declining consumer interest can indicate that a product is heading for extinction, even if that product is a ubiquitous commodity.
I agree with you both that radio programming is a very significant part of the puzzle, and that the changes that occurred in this area post-1996 have generally resulted in many listeners having a lower opinion of AM/FM radio. I think this is because of a mix of factors. Yes, local content is important to many, but in reality with today’s technology it’s very hard for a radio station in a metropolitan area to be local enough to satisfy most people. I only want to hear local content for my specific community, not any of the other communities in the rest of the metropolitan area. If I had a digital delivery system that allowed me to store and filter the content sent to me I could achieve this.
Far more damaging than less local content, in my view, was the increase in the number of spots broadcasters had to run to pay off the loans they took out to buy up other stations. Radio listeners are sick of commercials because radio broadcasters loaded up their schedules with so many spots over the past decade that listeners began to perceive that the ratio of spots to desired content was out of balance. Radio’s collective behavior in this regard was typical of a monopoly. While no individual radio company had a monopoly, the AM/FM service as a whole had a monopoly on live audio from the dashboard. And because it had a monopoly it got away with abusing the consumer in terms of jamming more and more commercials into the mix.
AM/FM’s monopoly on live programming in the car is now being challenged by satellite radio, and will be further challenged when local TV stations become receivable in the car in a few years. For years AM/FM radio stations only had to compete with each other for in-car listeners who wanted live programming. Now they’ve got competitors that are forcing them to raise their level of play. And we need the right tools to compete.
Thanks again for the comments.
August 25th, 2008 at 9:29 am
This would be a sad end to a medium that has escaped the gallows so frequently in it’s existance. Radio Survived Talking Pictures, Television, and Satellite Radio became a monopoly to survive.
But this article is correct. The only ones we have to blame are in the mirror in front of our faces. The greatest pride I’ve taken in my 30 years in this industry is it’s ability to reinvent itself. The Drawing Board needs to be returned to before it’s too late.