radiosherpa

Hunting for HD Radio

2009-04-09T17:11:00.000-07:00

Overall HD Radio had a decent week.

First, iBiquity announced that Land Rover will make factory-installed HD Radios available across its entire 2010 product line.

Then, later in the week, BMW indicated that it would make HD Radio available across its entire 7-Series line.

Not sure how many people are willing to pay $80k for a car in this economy, but BMW does remain a status symbol...so this has to be considered a win.

Finally, famed New York Times technology writer David Pogue revisited HD Radio in a long article that came out on Wednesday.

In general, David remained very complementary of HD Radio. But not all was positive.

David had asked his Twitter followers to comment on their experiences with HD Radio. Some of the responses were quite telling:

"Half of them complained, however, about reception problems like “hunting,” where the radio switches back and forth between the HD and regular versions of a channel."

And

"The biggest worry, according to one radio guy, is the concept. What draws radio customers isn’t sound quality, it’s programming...HD’s multicast channels could fulfill much the same mission, but these days, few stations have the money or manpower to work on HD channels."

Hmmm...

Reception issues and limited programming.

We could have written those tweets...and maybe we did:-)

Perhaps You Should Drink a Protein Shake First

2009-04-03T12:49:00.000-07:00

Bob Struble's latest blog entitled "The Barbell Strategy: Bulking Up for Radio’s Growth" was an interesting (if not rambling) read.

The "barbell strategy" is for HD Radio to focus on cars and portables. Attributed to his "long time friend" Lew Dickey, Bob writes for several paragraphs about how much he agrees with this strategy.

Bob did, however, add some qualifiers.

"To stick with the analogy, you need a bar to support the barbells, and that bar is traditional consumer electronic radios sold at retail. This traditional CE market is huge in its own right, and penetrating it first leads to more rapid adoption in cars and portables."

Hmmm...cars, portables and the traditional CE market...I think that pretty much covers everyone.

Nice job, Bob!

Despite his pandering, we actually agree with Bob.

Radio does need the traditional CE market to prove itself to car OEMs.

Continuing with the "Barbell" analogy, however, we do see a fatal flaw in this message.

Right now, each side of the barbell is weighed down by multiple players (e.g., OEMs, chip manufacturers, etc.) and viable competitors (e.g., iPods, iPhones, etc.).

Relatively small startup iBiquity is trying to lift both sides at once without a spotter.

This is like a 125 pound man trying to put up 800 pounds.

It is not going to happen.

If iBiquity was hoping that radio broadcasters were going to spot them during the lift with great content, this hope can be pretty much written off in this economy.

What iBiquity needs is a good protein shake to give itself a fighting chance. And that protein shake is an increase in the signal strength of HD Radio.

As we argued in our last post, it might be time to put down the weights for a little while and concentrate on bulking up.

The new NPR study is a good step, but until iBiquity has the requisite strength, HD Radio's naysayers will continue to call it a "Girlie Man"

Should HD Radio Stop Advertising?

2009-03-24T17:10:00.000-07:00

Amanda Alexander's article in Radio World was further validation that HD Radio is not quite ready for primetime.

She spent the bulk of the article talking about problems with the signal:

"My radio had trouble acquiring and keeping a digital signal for three stations in the market.

KJMN(FM) on 92.1 MHz did not get a lock in Denver or Aurora, a suburb 20 miles away that is considered part of the Denver market. The unit would try but could not keep digital more than a second or two. The unit could lock on and retain the analog signal with no problem."

That should sound familiar to HD Radio fans out there.

"Some areas unfortunately are holes for HD Radio. Many stations have nulls, and in these the radio cannot lock in HD Radio. For example, 92.5 KWLI has a transmitter up north near Erie, Colo., several miles from Denver. Erie is about 25 minutes drive north of Denver.

Here in Denver we have Lookout Mountain, home to several stations. On FM, if you are in certain parts of Boulder, you cannot get the HD Radio signal from Lookout Mountain. These FMs have boosters in Boulder, but analog only.

My parents and I have noticed while driving in our part of town, southeast Aurora, that the HD2 and HD3 sides of the station don't stay locked because of the weak signal. Also, west towards the foothills becomes difficult to get an HD lock. At times the analog even gets static."

She closes by saying:

"HD Radio still hasn't caught on like I wish it would."

Her only mistake was not drawing the right conclusion from her article on why this is the case. The rest of her article should make this abundantly clear...

THE SIGNAL IS NOT STRONG ENOUGH.

What to do?

Having dealt with HD Radios for the past 3 years we have come to the conclusion that only a boost in the allowable broadcast power will help. There is only so much better receivers can do....eventually basic physics wins out.

We do know that iBiquity and others are now working on getting permission from the FCC for a 10X power increase, but this begs the following questions:

1) Should the iBiquity continue to push chip vendors and radio manufacturers to put out radios following the existing power profile for HD Radio?

2) More importantly, given how important first impressions are...should the HD Radio Alliance even be advertising to consumers right now?

Unfortunately for us, iBiquity, and iBiquity's investors, we think the answer is "NO".

The supposed millions being spent on HD Radio marketing would be better spent resolving this signal issue.

The economic downturn could be a blessing in disguise. It could give HD Radio the time to put out a better product...assuming its broadcast backers do not fold first.

As Steve Jobs has proved, people will pay more for something if the product is compelling.

Message is the Medium

2009-03-15T07:10:00.000-07:00

Amazon Kindle, developed by Amazon.com, is a software and hardware platform for reading electronic books (e-books). The hardware device uses an electronic paper display and downloads content over the free (no monthly subscription fee) Amazon Whispernet using the Sprint EVDO network. Many of the books on Amazon.com are available in Kindle format.

A couple of weeks ago Amazon opened up its book collection (in Kindle format) for Apple iPhone and iPod Touch.

We believe it is a great business strategy because it creates a new distribution channel for Amazon contents. Amazon realizes that their value comes from their content and not from the distribution channels (Kindle or printed books) themselves. It is obvious that more the distribution channels more the reach and hence more the value and revenue. A great example of this phenomenon is "The Last Lecture" by Randy Pausch . It is available in hardcover, paperback, audio cd, Kindle and audible.com in addition to being freely available on youtube. What is interesting is, this lecture is successful in all formats - 9 million views on youtube and book is one of the Amazon best sellers,

Amazon's strategy makes great sense particularly when so many different types of medium (web, radio, tv, cell phones,etc) are available for users. We wouldn't be surprised if they make the Kindle App available for other smart phones as well.

While we are admiring Amazon's strategy, we are wondering why radio stations still incorrectly believe that their value comes from spectrum license. We hope they will realize soon that their value lies in their brand, content,programs and DJs.

$5 Radio Spots??

2009-03-08T16:17:00.000-07:00

Sure the stats are frightening:

According to the RAB, locally generated broadcast ad revenues were down 13 percent across the nation in the fourth quarter of 2008 compared to the final three months of 2007.

But advertising revenues are down everywhere...including at venerable Google. So these stats are probably more a reflection on the economy than radio.

What's the true story on radio advertising?

This weekend we just happened to be at a national barber chain with several locations in the Boston area and overheard a very interesting conversation between the owner and a few of the employees.

Apparently the owner had received a quote from a radio station in Boston (which we will not name) for a radio spot for $5. Clearly, she was very excited about this possibility as the she indicated that she had never been able to buy a radio spot for so little.

Some of her employees were incredulous as well. Seemed to good to be true.

One of the younger employees grabbed the price sheet and said, "Oh, this quote was for the music playing on "XXX.X.com"

The owner said "Oh, what is that?"

After a few minutes of heated discussion which led nowhere, we could not restrain ourselves and had to jump in to explain.

Finally comprehending what the quote was for, the owner stated "I never even heard of that so forget it."

Before letting the conversation die, we asked a logical follow-on question:

Had the barbershop ever bought online advertising?

The response: "Sure, on CitySearch once, but I really did not understand it and don't know if it even worked."

This raised some alarms bells for us.

1) It's clear that traditional local advertisers are still very skeptical about new media.

2) Radio station sales teams are completely failing to explain the value of their online offerings.

Some might say that for $5, it may not be worth the effort for most sales people.

But if this is radio's future (which RadioSherpa believes it is), in-stream advertising had better start being the focus during the training process of ALL local radio sales teams.

$5 is still better than zero!

Cheap Populism

2009-03-05T22:12:00.000-08:00

This clip we saw on John Stewart's Daily Show was too good not to share.

Not when so many people have been laid off because of Wall Street's stupidity.

Our favorite line:

"If I only followed CNBC's advice I would have a million dollars today....provided I started with one hundred million dollars."

This clip would be even funnier was it not real.

We are very pleased, however, that John Stewart pointed to an even bigger problem....

The complete dearth of real journalism in this country.

Its a shame that the only truth about this whole financial debacle is found on a show based on satire.

Could Struble Be Radio's Obama?

2009-02-27T18:00:00.001-08:00

How you react to adversity often defines you.

This week we heard that the economy dropped an incredible 6.2% in Q4 and that unemployment soared to almost 7% (and almost 9% in not-so-sunny California).

So what did President Obama do?

Did he cower away from his campaign pledges?

Just the opposite.

He proposed a stunning $3.7 trillion budget that is not only a repudiation of the past 30 years of Reagon's "trickle-down" economics, but also a down payment for future growth.

He starts his 134-page budget with a 10-page preamble entitled "Inheriting a Legacy of Misplaced Priorities".

"It is no coincidence that the policy failures of the past eight years have been accompanied by unprecedented Governmental secrecy and unprecedented access by lobbyists and the well-connected to policymakers in Washington. Consequently, the needs of those in the room trump those of their fellow citizens".

Powerful stuff.

But what if Obama was not talking about President Bush's policies over the past 8 years, but rather "Big Radio" and the NAB?

Sadly, Obama's preamble could just as easily apply.

For too long, the folks at Clear Channel and other large radio conglomerates were so busy lobbying Congress for special privileges including ownership rights and killing satellite radio that they totally forgot their most important constituent: the listener.

Thus, it should surprise no one that radio ratings and revenues are falling just as fast (if not faster) than the economy overall.

If only terrestrial radio had its own "Obama".

Any suggestions?

RIAA Lends Terrestrial Radio a Hand

2009-02-21T17:06:00.000-08:00

This was definitely an exciting week for those of us in the wireless space.

The most interesting headlines came from the World Mobile Congress. The mobile space is unquestionably the hottest space in technology right now...in no small part because of Apple's iPhone.

Everyone who is anyone in technology was in Barcelona making announcements.

Microsoft, Nokia, Google, Yahoo...all present.

Terrestrial radio should take note.

Untethered Internet Radio is the future and is approaching even faster than we at RadioSherpa could have predicted.

Had this kind of excitement (and ecosystem) for HD Radio existed back in 2006 (when RadioSherpa entered the space), the medium would have had a chance, but we fear that this window is rapidly closing.

The folks at iBiquity will only succeed if they position their medium as a stepping stone to the eventual reality of ubiquitous Internet Radio.

This is still better than satellite radio.

The announcement that Sirius was rescued from bankruptcy really does not matter. Satellite radio is irrelevant..and everyone knows it.

The Wall Street Journal is even suggesting that the only reason some investors see value in Sirius XM is the $6 billion in tax losses that the company has accumulated over the years.

Pathetic.

Finally, this week saw the NAB strike a deal with SoundExchange/RIAA on Internet Radio streaming fees.

Its actually quite logical that SoundExchange struck a deal first with the NAB. Let's face it, terrestrial radio, for all its faults, remains the only ones capable of paying the higher royalty rates.

Pandora, despite all its listeners, simply does not have the sales force required to sell the necessary advertising required to cover the increased royalty rates. And satellite radio may be on its last legs.

If terrestrial radio has helped the RIAA and the big labels make billions over the last 50 years, these increased rates may just be terrestrial radio's reward.

May seem hard to believe that higher rates could be a reward, but these new rates will effectively kill most of the online radio startups who had hoped to kill Clear Channel and its brethren.

Yikes! Radio Revenues to Tumble 13%

2009-02-17T22:04:00.000-08:00

Talk about good timing.

Our post yesterday spoke to the importance of online radio for terrestrial broadcasters.

Although we are not big fans of "analysts", we do like to cherry-pick "investor notes" when they support our position.

Think George Bush combing over any potential tie-ins between Iraq and 9-11 back in 2003.

Luckily no one will die over our selective use of facts.

Anyway, Wachovia analyst Marci Ryvicker reconfirmed her belief today that terrestrial radio is looking at a 13% decline in revenues in 2009.

The one bright spot: online radio...which is expected to have a "defining year" in 2009.

We would not go that far, but it may just be the key towards future growth.

BTW, Just so you know we take these investor notes with a grain of salt...we would like to point out that Wachovia has single-handedly brought once proud Wells Fargo to its knees asking for a bailout.

We can only hope that Marci's ability to predict the future is far more lucid than her bosses.

Hidden Key?

2009-02-16T17:01:00.000-08:00

"Within each storm of life is hidden a key that will unlock another door that you were meant to walk through."
-- Steve Brunkhorst

Sirius XM is facing bankruptcy.

Automotive companies and their suppliers are already bankrupt.

Advertisers are pulling back and that includes spend on terrestrial radio.

But a hidden key may just be emerging.

MediaWeek ran an article on Sunday that indicated that advertisers are increasingly looking at online radio as a viable advertising channel.

TargetSpot, a key player in the online radio advertising space, indicated that that upfront billings grew 72% so far this year.

Granted, such growth is relatively easy when you are talking about small dollars.

In fact, one media buyer indicated in the article that advertising on streaming radio now accounts for 5 to 7 percent of their network radio budgets. These percentages are still admittedly small...but for radio, any growth at this point should be considered a win.

Let's hope that broadcasters have enough faith to hold onto this key that could provide new significant revenue streams in the future.

Radio Gets Google To Throw $102 Million Down The Toilet

2009-02-13T16:07:00.000-08:00

The Internet this week has been littered with stories about the pending bankruptcy of Sirius XM. The satellite radio monopoly has $175 million due on Tuesday and another $350 million due in May. In this economic environment, its chances of averting bankruptcy is slim. Can you say fire sale?

Of course, one company that must be enjoying this is iBiquity. Never blessed with the billions in cash that satellite radio received, the pending bankruptcy of their biggest competitor must be fun for them to watch.

If you add this news with the fact that Jaguar recently announced that it was going to make HD Radio a standard option across all their cars, our friends over at iBiquity are having a very good week.

Too bad iBiquity wasted all that money on petitioning the FCC to mandate the inclusion of HD Radio into satellite radio receivers.

But not all was great for terrestrial radio this week. In probably the most interesting news of the week, Google announced that it was exiting the radio business.

So how is this a bad thing?

Doesn't Google devalue ad inventory with its efficient algorithms?

Sure.

But Google is not dumb. It does not pull out of markets where it still sees potential...even if the venture is still just a cost item on their income statement.

Has Google Maps broke even yet?

We doubt it, but don't expect Google to be pulling out of this space anytime soon.

More likely, Google sees that OTA radio advertising is not a growth business. In fact it is a business on the decline.

Not even their $102 million investment (at a minimum) in dMarc made it worth continuing.

This should extremely worrying for terrestrial radio.

Alles Klar Herr Kommissar

2009-02-06T22:31:00.000-08:00

Running on the treadmill yesterday, we caught the tail end of a song that immediately brought us back 25 years.

It was Falco's timeless hit Der Kommissar.

Like many people in that situation, we came home looking to hear the whole song again.

So what did we do?

Turn on the radio hoping to hear the song?

Dig out our CDs or even our iPod looking for the song?

Nope...went on to YouTube and quickly found several different versions of the song, including this gem of a medley which included the original Falco version, the English version from After the Fire, and our favorite, Laura Branigan's "Deep in the Dark":

Ok, so we were just kidding that we liked Laura Branigan's version the best...but the point is that this medley was available for those crazy 80's buffs.

This experience with YouTube does point to some fundamental weaknesses with the traditional radio programming model. People want things on demand.

And radio is not alone in facing this challenge.

The recent article in the New York Times indicates that people increasingly view traditional movie viewing options as outdated and want to watch movies on demand..even if this means doing something illegal.

“Young people, in particular, conclude that if it’s so easy, it can’t be wrong,” said Richard Cotton, the general counsel for NBC Universal.

The longer traditional media companies put off creating comprehensive digital strategies, the more likely people will look to alternative illegal options.

After seeing what Napster did to the music business, the fact that movie studios have not embraced legal online channels like Hulu and Youtube is inexcusable.

So the radio's slow adoption of digital technologies like HD Radio and online radio is not unique to them. Fear of cannibalizing their analog cash cows is real, but the alternative is worse...losing customers to illegal channels with the chance of losing ALL Revenue.

Alles Klar, Kommissar David Rehr!

Grading Radio

2009-01-29T17:54:00.000-08:00

Two devices captured the attention of radio geeks this month. We felt it was time for RadioSherpa to issue its report card on both.

1) Blaupunkt "Internet Car Radio"

First was the Blaupunkt "Internet Car Radio" which debuted at CES.

Obviously this tagline was going to get some attention.

So did they integrate a GSM or CDMA modem into their radio units?

Did they resolve the limitations of current car radio displays with a rich touchscreen?

Did they figure out a way to reduce dropouts on the 3G network?

The answer to all these questions is NO!

The first "Internet Car Radio" was nothing more than a radio console that uses Bluetooh to play music streamed from a users cell phone.

The Intel WiMax demo we discussed a few months ago was far more impressive.

GRADE: F-

2) Radio Bookmark

The second device grabbing some headlines was the Radio Bookmark which is being exclusively promoted for public radio. This USB dongle from SkyBlue Technologies allows users to hit a button on the Radio Bookmark when they hear a story on public radio that is of interest to them.

Later, when users are at their PCs, they can plug in their USB dongles which will automatically relay the time and frequency to a web service that will then return detailed information on the story via the web.

Thanks to the iPod, USB interfaces on car radios are increasingly available, which is good news for fans of this concept.

Unfortunately, this concept will remain limited unless this feature can be integrated with iPods which has successfully trained people to synch their devices with the PCs at regular intervals.

But as "Tagging on HD Radio" has proven, the disconnect between when people first get excited about a story in their cars, and the time when they actually get to their PCs, is often too great.

Nice try and brownie points for working with public radio (big fans!)

Grade: B-

Put on your oxygen mask first

2009-01-25T10:19:00.000-08:00

Thomas Friedman, the New York Times columnist,argues that to restart diplomacy (that is to get them to talk) in Middle East, the following must be immediately accomplished:

Rebuild Fatah
Merge Fatah with Hamas
Elect an Israeli government that can freeze settlements
Court Syria and engage Iran — while preventing it from going nuclear

Obviously, these steps are neither easy nor cheap. More importantly and unfortunately, they are highly improbable as demonstrated by the lack of peaceful resolution despite sixty years of support and diplomacy.

Supporting Israel since its formation in 1948 has taken a huge toll on USA not only in terms of resources but also in the form of terrorism and wars. We are wondering whether USA should continue to tackle Israel/Palestine issues while the country itself is in deep shit. The direness of the situation at home can be understood from the following excerpt from Obama's inauguration speech - "That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, .... Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet."

Given this disastrous situation, we hope Obama administration gets away from the Middle East mess (and the Israeli lobby) and focuses on revitalizing this country. Let Israelis and Palestinians sort it out themselves. They are old and strong enough.

As the airlines say, put on your oxygen mask first before helping others.

Hoi Polloi

2009-01-23T17:47:00.000-08:00

We really enjoyed iBiquity's CEO Bob Struble's most recent blog. We thought that his message about a rapidly increasing set of competitors for broadcast radio was on point.

The fact is that AM/FM radio has long ago lost its "cool".

When have you heard the hoi polloi talk about radio in the same way they do about cell phones?

Case in point:

Do a Google search for "CES and Palm Pre": 16.9 million results

Then do another Google search for "CES and HD Radio": 542 thousand results

But all is not lost. Clear Channel and CBS Radio have made significant steps forward in the past year embracing the iPhone and their respective apps are having some success.

This is a foundation from which terrestrial radio can build.

Bob talks about HD Radio being "part of the solution". But he shold go further. The radio industry is half pregnant with HD Radio and they need to decide whether to fully embrace it or dump it immediately.

We hope it is the former and Bob should be making that case.

Here are some good, if not novel, ideas:

1) iBiquity's should push their broadcast partners to make explicit links between new programming online, in mobile and HD Radio. Radio could benefit by riding the coattails of new "hip" offerings like iPhone apps. (P.S. HD Radio's "Tagging" feature is not enough.)

2) Broadcasters need to invest more in programming...not less. This investment can be spread across all mediums as consistent content is key to building new station brands.

3) As we have argued before, iBiquity and broadcasters need to keep pushing the FCC to allow the broadcast power of HD Radio to be increased.

4) Stop waiting for Detroit to save you. The Big 3 have bigger problems than what radio they will choose. Depending on Detroit has not worked for Sirius, so why repeat this mistake. iBiquity should be spending their time working with radio manufacturers and developers who will make products that customers really want. It was amazing how quickly Detroit moved to incorporate iPods when consumers demanded them.

5) Continue pushing the technology envelope to reduce HD Radio's power profile. This is obvious but what good is radio if you need to be tethered to your power cord.

As Bob states himself, "No one is carrying transistor radios anymore, it’s cell phones, MP3 players and increasingly, PNDs."

Very true, and for radio, very scary.

Par For The Course

2009-01-22T19:36:00.000-08:00

What a week.

On one hand, we had one of those historic "American Moments" with the inauguration of President Obama (sounds good, right?).

On the other hand, however, job losses appear to have only accelerated this week. Most employees are living in fear...unless they are fortunate enough to work at Apple.

Not surprisingly, the radio industry has also had significant layoffs. Just this week, we learned the following:

1) iBiquity had a small reduction in workforce. This sucks as we really like these folks. We hope that the folks behind HD Radio can pull through this credit crisis.

2) Clear Channel also laid off 1,850 employees this week...perfectly timed to coincide with the inauguration.

Not only was this a cruel joke on 1,850 people who were probably in a great mood that morning in anticipation of the Obama inauguration, but also a ploy by management to get this announcement out there with little press.

But we noticed, and so did many others.

What was also not lost on us was who management is at Clear Channel these days:

None other than the private equity firms of Thomas H. Lee Partners and Bain Capital.

As we pointed out in February, it should come as no surprise that there would be significant layoffs at Clear Channel. In fact, the downturn in the economy was likely a convenient cover.

That is what private equity firms do. They "streamline companies" (i.e., fire employees) to "better position" (i.e., breakup and sell) the company for the future.

What else can they do?

Their excel models actually don't teach them how to run companies.

But the joke may still be on them.

You see, they are facing an uncomfortable situation now where they may be NO buyers for even parts of the company...particularly on the radio side.

One has to wonder what an $18 billion write-down looks to limited partners.

Our favorite Presidential candidate may need to dig deeper into his pockets if he wants to see his company survive. Relatively speaking, his futile Presidential campaign will look cheap.

Our sentiments may be best summarized by this astute commenter on John Gorman's Media Blog:

"Bain and Lee are up the creek without a paddle with this deal. Even when they split the stations up and sell them in parcels they will be lucky to get a fraction of what they paid for them. Projected revenue? Hand it to the Mays family. A clan of Texans took those New England Yankee WASPs for one hell of a ride they won't forget for a long time to come. Yee Hah."

Yee Hah indeed.

Must See Content...(Besides the Inauguration)

2009-01-19T17:32:00.000-08:00

Lost in all the coverage about the inauguration is the recent (and very progressive) decision by Massachusetts District Court judge Nancy Gertner to allow live streaming of the trial, Harvard vs. RIAA.

Although the RIAA appears to have backed off the strategy of suing their customers, the case still has far reaching implications for both the legal and technology communities. RadioSherpa will be watching this trial closely.

But what is perhaps most interesting is the reasoning Judge Gertner gave for allowing a live web stream from her court room:

"In many ways, this case is about the so-called 'Internet Generation' - the generation that has grown up with computer technology in general, and the internet in particular, as commonplace," Gertner opined.

"It is reportedly a generation that does not read newspapers or watch the evening news, but gets its information largely, if not almost exclusively, over the internet."

We applaud her decision.

If a judge, part of the legal community famously behind the times on technology, understands just how important the Web is to the public, one has to wonder why traditional media such as newspapers and radio still remain hesitant to fully embrace this new medium.

Hope Springs Eternal

2009-01-14T19:16:00.000-08:00

As we are now within a week of Obama's big day, we think that most Americans are looking for signs of hope.

The latest Internet traffic reports for CBS Radio and Clear Channel may just be those signs.

MediaPost News is reporting that CBS Radio's Internet traffic grew 30% in December 2008 over the same month the previous year. Certain CBS stations in Dallas and Los Angeles and Chicago grew over 100% YoY.

The report also confirms that Clear Channel is seeing 20% growth YoY in web traffic. Better yet, overall revenues from Clear Channels Internet Radio efforts are now approaching $70 million.

This revenue number is perhaps small relative to their OTA revenues but they are nothing to sneeze at either. We are quite certain that Pandora (despite all of its hype) is not anywhere Clear Channel's web revenues.

Hope is a magical thing...let's just hope the legacy of past leadership does not create too big of a burden to overcome.

Should be unanimous....

2009-01-09T18:41:00.000-08:00

Any one interested in HD Radio should read the latest post in Radio World. The story posts comments provided to the FCC with respect to the proposed power increase for HD Radio broadcasts.

RadioSherpa has stated numerous times that it supports the effort to increase HD Radio's broadcast power. Without this tenfold increase in power, HD Radio is doomed to fail. The fact is that there is only so much improvements to receivers' sensitivity can do.

The positions that commenters took were predictable. But there were some golden nuggets:

1) BMW goes on record with some very interesting comments on their current HD Radio offering:

"BMW of North America remains concerned, however, that these benefits of HD Radio technology will not be accepted by the public unless HD Radio technology is able to replicate analog coverage in a greater number of cases. Although there are many stations that enjoy excellent digital coverage, there are a number of stations that are not able to replicate their analog coverage with the current configuration of the HD Radio system.

These coverage problems are particularly problematic in a vehicle environment. Mobile reception is inherently more susceptible to multipath interference and other impairments that can vary considerable in very short time frames as a vehicle goes in and out of areas of interference."

Given these comments, one has to wonder why BMW would even want to sell the current HD Radio offering. It would seem to be more of a liability.

2) NPR appears to be leaning positive on this issue. They state the following:

"NPR has publicly stated that it is not fundamentally opposed to — and sees the need for — a substantial digital power increase. Thus, the Joint Parties hope to work with iBiquity and NPR Labs to identify those circumstances in which a particular FM station's digital operations may need to be conditioned to avoid unacceptable levels of harmful interference."

"Not fundamentally opposed", however, does not sound like a ringing endorsement.

3) WNYC states:

"We oppose the proposed power increase on the basis of the increased first adjacent interference to WNYC(FM)'s analog coverage and to the interference we will cause to our first adjacent neighbors. The [NPR] study specifically demonstrates for us that approx. 20 percent of WNYC(FM) analog listeners would experience this interference; a signal degradation that is wholly unacceptable to the service we expect to provide our listeners and members."

OUCH...but then why are they still broadcasting a HD2 AND HD3 station? Don't they want people to actually hear their new channels...or are these broadcasts just for themselves.

We will put WNYC in the "confused" category with NPR.

4) And in the biggest surprise of them all, PocketRadio goes on record endorsing the power increase for HD Radio.

Ok, not really, but that would be very funny:-)

Those who do support HD Radio, however, should be fully behind this initiative to increase broadcast power.

Our question to those stations like WNYC who appear against iBiquity on this issue is very simple: Why even bother with HD Radio?

Radio Android

2009-01-09T07:33:00.000-08:00

miRoamer, a Melbourne-based online radio aggregator and Blaupunkt, a large German car radio manufacturer unveiled a prototype of Internet car radio during the 2009 Consumer Electronics Show (CES) in Las Vegas.

Although 30,000 stations are offered, the product is not attractive as the radio is expensive to buy ($399), expensive to own as it entails a monthly subscription fee of $15 and a high-capacity cellular data plan.

However, we believe these issues will be resolved soon since the price of successful consumer electronics devices usually fall quickly and miRoamer can perhaps try ad-funded programming in combination with pay-per-hear content such as premier podcasts.

More importantly, we see an intriguing possibility - Google android powered car radios. This opens a great advertising channel for Google - a large population of car radio listeners. This is specially beneficial to Google since they can own the content, commercials, the software platform (android) and the user data just by partnering with (usually willing) mobile network operators such as T-Mobile.

In fact, Google has been interested in placing audio ads on terrestrial radio broadcasts. They acquired dMarc for the same exact reason. To their disappointment, radio stations refused to work with Google.

Now it is a different game. Broadcasters may not be able to stop Google. Soon AM, FM and HD Radios could be replaced by gRadios.

Buying Sirius XM...Brilliant or Stupid

2009-01-05T21:04:00.000-08:00

Over the extended holiday weekend (at least for us), we read an interesting editorial by Dave Wilson from WHDX FM and WHDZ FM in RadioWorld. In the article he argues that terrestrial radio broadcasters should pool together their resources and buy Sirius XM.

We are not sure if this is a case of Schadenfreude on the part of a terrestrial radio veteran who is enjoying seeing satellite radio take a beating in the stock market. But assuming that he is serious, does this make sense?

He indicates that at the current market cap, Sirius XM could be bought for between $100k for a small market Class A station and $1.8 million for the largest high-powered FM station. Given that some large market radio stations are pulling between $30 and $70 million a year, this expense to co-opt a major competitor seems reasonable.

We think, however, that this would be a waste of money. Here is why:

1) Terrestrial radio already has better spectrum...as anyone who has tried Sirius indoors can tell you.

2) For the largest broadcasters, creating a national station is already possible. In fact, one of our early posts argued that HD2 stations should do exactly this.

3) Satellite radio does not address the biggest threat for terrestrial radio...namely the Internet and its unlimited and user-controlled options. Sirius is just another BROADCAST.

Given these points, Dave would be better off arguing that all the stations should get together and spend this money on more promising alternatives.

Of course, we have some ideas:

1) Better programming for HD2 stations

2) Fulfilling RadioSherpa's dream of a consolidated programming guide for both online and OTA broadcasts

3) Even an upgrade of existing HD Radio infrastructure to accommodate increased broadcasting power...which we are sure iBiquity would also love.

For those feeling the blues this year...

2008-12-29T15:37:00.000-08:00

2008 was year that most would like to forget.

The financial industry collapsed under the weight of its own greed.

Thousands lost their jobs.

We still have too many soldiers in Iraq and Afghanistan.

HD Radio adoption remains nascent.

And through all this, Bush proved useless again.

Ok, on the HD Radio point, probably not much that Bush could do. The average consumer is still trying to figure out the transition to HD Television, as Fox's Spike Feresten so humorously points out.

Despite all this, RadioSherpa still believes that we need to be able to laugh.

Thus we are including a video that came out last year from The Richter Scales called "Here Comes Another Bubble". We know that many have probably seen this video before, but given that so many bubble have burst this year, we felt that this video was particularly apropos. Enjoy:

Happy Holidays!

Change Your Evil Ways

2008-12-24T07:30:00.000-08:00

We were happy when we heard The Recording Industry Association of America (RIAA) stopped the futile strategy of suing individuals for file sharing. Unfortunately,the excitement was short-lived as RIAA has come up with an even more ill-conceived strategy - recruiting Internet Service Providers (ISPs) to police file sharing for FREE.

Jerry Scroggin, owner-operator of Bayou Internet and Communications, a small Louisiana ISP, immediately objected this strategy and has asked RIAA to pay for this policing service. Makes perfect business sense. Intelligent packet inspection is neither straightforward nor inexpensive.

We are not even sure how this policing could work in the world of cheap dedicated servers and superfast networked machines. For example, one can run BitTorrent on remote machines and collect whatever files they want. Then they can download all those collected files over SFTP. The ISPs won't even know that copyrighted files are being downloaded.
(Even though proxied connections are slow, one can also use proxy servers such as squid to hide file sharing traffic.)

RIAA, please stop fighting the masses. Instead, allow radio stations and large music sites to stream music online for lower licensing fees and work out a revenue sharing arrangement with them. At least that way you will make money instead of writing big checks to ISPs for their policing service.

Fuel Meter

2008-12-20T09:00:00.000-08:00

Richard Larrick and Jack Soll,two Duke management professors, demonstrated in an article (appeared in the June issue of Science magazine) that the commonly used Miles Per Gallon (MPG) measurement is misleading. They argue that the problem with MPG is that it leads consumers to significantly underestimate the reduction in fuel consumption that can be achieved by replacing very low MPG cars with the ones that go even only a few extra miles for the same gallon. Less detrimentally, this measure also misleads people to overestimate the benefits of replacing relatively fuel-efficient cars with more fuel efficient ones.

They illustrate this point by comparing number of gallons consumed by cars to travel 10,000 miles.
Example 1:
Consider two cars X and Y and lets assume X provides 10 miles per gallon and Y provides 12 miles per gallon. X would take 1,000 gallons to cover the distance while Y would take only 833.33 gallons. In other words, Y would save 167 gallons of gas (and $501.00 assuming a price of $3/gallon) for every 10,000 miles.

Example 2:
Consider same two cars X and Y. But, now lets assume X provides 25 miles per gallon and Y provides 30 miles per gallon. X would take 400 gallons to cover the distance while Y would take only 333.33 gallons. In other words, Y would save only 67 gallons of gas (and $201.00 assuming a price of $3/gallon) for every 10,000 miles.

It is important to note that in the first case, for an increase of 2 MPG, 167 gallons was saved. While in the later case, despite an increase of 5 MPG, only 67 gallons were saved.

They present the following chart that shows the relation between MPG and gallons consumed for covering 10,000 miles.

We created the following chart that shows the number of gallons saved per 10,000 miles by moving to a car that provides one additional MPG. For example, when a 10 MPG car is used instead of 9 MPG car, 111.11 (1111.11 - 1000.00) gallons is conserved. Similarly, by moving to a 11 MPG from a 10 MPG one saves 90.91 gallons.

The steep fall on the left side and the slow decline on the right side of the curve clearly indicate how misleading MPG can be, as argued by the aforementioned authors.

They recommend using an alternate unit of measure - Gallons Per Mile. We, like New York Times, agree that it is a great idea. However, we believe that the auto industry can clearly present the consumption information with a simple addition to cars - a fuel meter that shows a cumulative total of number of gallons consumed. We believe this meter can be added without any difficulty since most vehicles are already equipped with a fuel gauge.

Such a meter would let the owner/driver know the number of gallons consumed by that vehicle for the distance indicated by the odometer.

Birds of a Feather? (HD Radio and V Cast)

2008-12-18T19:00:00.000-08:00

News of Clear Channel's deal with Verizon to advertise across 21 of its HD Radio stations must have gotten quite a few people within the HD Radio community excited.

We were impressed ourselves given the relatively small number of HD Radio listeners.

More impressive was that Clear Channel packaged the ad buy for Verizon with ad inventory on Clear Channel's HD Radio's Internet streams.

This is the kind of innovation that HD Radio will need if it is going to succeed.

Congrats to Clear Channel!

We just wish that the advertisements were not for Verizon's struggling V Cast services.

The days of walled gardens in mobile are rapidly coming to an end.

Verizon future is not dependent on data services such as V Cast, but on maintaining its network advantage (which it still has).

Rather than force phone manufacturers and users into walled silos such as V Cast, Verizon should make it as easy as possible for developers to build on top of this network.

It is likely that this mindset is why Verizon turned down Apple. We bet they would like that decision back.

One has to wonder if iBiquity is making/has made the same mistakes as Verizon.

As they say....