Tuesday, January 8, 2008

Radio: Gossip Churl

How about all that misinformation about HD Radio that was funneled out to the masses this past weekend?
You know, the one about Steve Jobs’ Apple manufacturing an HD Radio/iPod hybrid boom box? It was hot news for a nanosecond on the pro-HD Radio trades and web sites. I could’ve mentioned in last Thursday’s blog, but chose to ignore it.

I felt HD Radio Alliance head Peter “Sgt. Bilk-o” Ferrara’s plea to the FCC that if the XM-Sirius merger goes through that all satellite receivers should include an HD Radio was enough humor for the weekend.

Pro-HD Radio evangelists proclaimed this well-placed scam to be a sign that Steve Jobs was endorsing HD Radio.

In reality, it was fabricated nonsense that reeked from the foul rat odor of the falsehoods and deceit we’ve come to recognize from Bilk-o and his fraudulent HD Radio Alliance.

Sad, isn’t it? That was the best rumor he could peddle in front of the Consumer Electronics Show this year? A 13-year old girl could’ve done better job at selling this gossip.

Did Bilk-o really believe that anyone would fall for a tale this incongruous?

The HD Radio/iPod boom box amalgamation was leaked to iLounge.com, an independent site of dedicated to presenting the latest news and gossip of all things iPod.

When iLounge added the anecdote on-line – as it does with all tittle-tattle, the HD Radio Alliance leaked the fictitious story again – for a second time – to the trades, which printed the mendacity as….well, judge yourself with this piece from Radio Ink: http://www.radioink.com/HeadlineEntry.asp?hid=140565&pt=todaysnews .

I can’t fault any pro-radio trade or site to pounce on any story that speaks optimistically of the radio industry these days. Here’s where it goes sour. The accomplices that peddled this story around to the trades embellished it with re-telling the tale of “tagging” – a way to one- stop shop at the iTunes store - and name dropped Clear Channel, CBS Radio, Cumulus, Cox, Entercom, and Greater Media as chains that are in the process of encoding their HD Radio stations to perform such miracles.

Bilk-o, read the Book of Jobs. Steve’s selling iPods and iPhones – not HD Radio. He, like consumers everywhere, couldn’t care less about your product.

Question: Who’s listening to HD Radio?

Answer- Absolutely no one!

Follow this illusory line and tell me what it means: If Apple does indeed introduce a tagging-capable product at Macworld, it won't be its first venture into the boombox arena: It introduced the Hi-Fi iPod boombox early last year. But, like the iPod itself, that boombox did not include a radio. JBL, Alpine, and Polk Audio are all set to introduce tagging-capable HD receivers soon. One has something to do with the other?

The HD Radio Alliance must assume that by the time MacWorld ‘08 – Apple’s annual debutante ball for new products – begins (January 14 – 18) the rumor will be deemed fact and when it doesn’t happen, it will provide the HD Radio Alliance the chance to steal the line used when a sports team chokes in the finals, “maybe next year.”

Here’s another dilemma. HD Radio is killing its host – terrestrial radio.

Media Monitors, which logs radio spots, revealed its number one radio advertiser of 2007 – The HD Radio Alliance.

Let’s tackle the two problems here.

First - They were non-revenue ads. They made no money. All they did was eat inventory.

Second – Put yourself in this place. Say, you’re selling against radio. There’s a buy on the table and it’s up for grabs. One medium gets it all. What would you do?

How about saying that radio’s number one client in ‘07 was HD Radio; receiving a total 1,451,036 announcements on participating stations radio nationwide, which included all the major radio chains?

Add that the intent of this campaign was to convince consumers to buy HD Radio units.

So how many HD Radio units were sold to consumers in 2006? Real figures, please.

Do we see six figures?

Do we see five figures?

How about four?

Next question – How effectual is radio if it can’t move product for its number one client?

Radio, you’ve been scammed by the HD Radio Alliance – again!

You’ve been put in a position to sell a product that no one wants or cares about because it doesn’t work. If you thought FM HD was an embarrassment, please let me introduce you the fiasco known as AM HD Radio.

The gaming/geek cable channel G4 is covering the Consumer Electronics Show in Vegas this week. Let’s see how well HD Radio is received this year. Will they even spend one second on HD Radio coverage this year? If they do, it’ll be one second more than they did last year.

For the real world, the CES is where manufacturers drop their new wares. Those that engender consumer interest will have a chance to go to market. New products met with tepid response are scrap heaped.

I take that back. You’ll never see them again unless it’s HD Radio, which has come back from the dead more times than Dracula.

So why perpetrate the myth?

HD Radio, which doesn’t work, is further hampered by a costly chip, which keeps its retail price high. The chip won’t get cheaper unless HD Radio goes into mass production. But it won’t because there is no demand for HD Radio. Come to think of it – isn’t that the definition of terminal?

You can’t predict the future – you can only create it and Bilk-o, this is the hackarama you’ve done for iBiquity and the radio industry.

In addition to those million-plus free spots radio ran, stations are also required to pay royalties to iBiquity and costs paid by manufacturers of HD Radio units are passed along to stations that buy them.

When I explain this deal to those not in the radio business I’m always asked the same question.

Isn’t that like digging the grave you’re going to be buried in?
---------
Rare WMMS Bruce Springsteen/Southside Johnny jam footage at: http://www.buzzardbook.wordpress.com

25 comments:

PocketRadio said...

I wonder how much of this is misinformation, if any, as to whether Ford will be factory-installing HD Radio next year - a Ford insider says "no", while press releases say otherwise:

"Ford, Lincoln And Mercury vehicles to feature factory-installed HD Radio Technology in 2009"

"Ford Motor Company today became the first US automaker to announce the availability of factory-installed HD Radio™ technology as a standard or optional feature on Ford, Lincoln and Mercury vehicles beginning in calendar year 2009."

http://www.prdomain.com/companies/F/FordMotor/newsreleases/20081851249.htm

"No HD for Ford 2009"

"Kind of a downer to close out the year, and a possible warning for the future... a family member works in Detroit on auto designs for future years, and the audio systems that go in them. During a recent holiday chat, he informed me that he was just about to wrap up the work for Ford 2009 models. 'So they have HD tuners, right?' I asked. Well, no they don't he responded. They are loaded and ready for Sirius radio, THX sound as an option, many other lovely audio treats, but unless requested custom by the buyer, HD will not be included in the 2009 audio systems."

H(D)appy New Year
Joe Vincenza
WUWF Public Media, Pensacola

http://lists.radiolists.net/pipermail/broadcast/2007-December/065882.html

PocketRadio said...

"HD Radio, which doesn’t work, is further hampered by a costly chip, which keeps its retail price high. The chip won’t get cheaper unless HD Radio goes into mass production. But it won’t because there is no demand for HD Radio. Come to think of it – isn’t that the definition of terminal?"

We know damn-well that these clunkers are not selling, yet iBiquity manages to keep expanding the number of HD Radio manufacturers. I see this whole scheme, as a house-of-cards waiting to implode:

1) iBiquity claims that there are 1500+ HD stations, yet only 1300 have registered with th FCC:

"Have 200 HD Radio stations gone missing?"

"The HD Radio camp is advertising that there are currently over 1,500 radio stations now broadcasting in HD (from its website, to press releases as well as in various other promotions)... but yet only 1,300 have filed with the FCC."

http://www.orbitcast.com/archives/have-200-hd-radio-stations-gone-missing.html

2) Ford is supposedly going to start installing standard/optional HD radios in 2009 - what will happen when pissed-off consumers start returning to dealerships because of serious droup-outs, interference, and poor coverage. You are correct, in that HD Radio simply does not work.

3) HD Radio manufacturers must be paying these licensing and HD chipset fees up-front to iBiquity, so when large quantities of HD radios are purchesed by, for example, QVC and Ford, they are left holding-the-bag after these units do not sell.

The reminds me exactly of a Ponzi Scheme:

"A Ponzi scheme is a fraudulent investment operation that involves paying abnormally high returns ("profits") to investors out of the money paid in by subsequent investors, rather than from net revenues generated by any real business."

Anonymous said...

He's the boy that cried wolf. Each time he pulls a stunt means he will be taken less seriously the next time around.

HD radio was an ill-thought scheme. Correct me if I'm wrong. Radio is not under a deadline to convert to digital.

Radio should be concentrating on internet convergence. HD radio is a waste of time, money and skill.

Anonymous said...

OK...

That very same group of broadcasters always going along with and promoting the latest HD scam. Aren't they the very same groups who invested financially and heavily in Ibiquity from the start?

Is is not true they bet very big bucks on this nag and committed their stations to hundreds of thousands in upgrades? Upgrades from Ibiquity, of course.

Does this sound the slightest bit like a conflict of interest to anyone else?

Anonymous said...

Has the HD Radio Alliance ever released the actual AUDITED number of HD Radio units SOLD in the United States?

That would tell the tale. I cannot take their propaganda seriously. It is NOT a good product for one and the content on the HD 2, 3 channels is terrible.

HeadInTheAss100 said...

"HD radio was an ill-thought scheme. Correct me if I'm wrong. Radio is not under a deadline to convert to digital."

"Digital Audio Broadcasting Systems and Their Impact on the Terrestrial Radio Broadcast Service"

15. We will not establish a deadline for radio stations to convert to digital broadcasting. Stations may decide if, and when, they will provide digital service to the public. Several reasons support this decision. First, unlike television licensees, radio stations are under no statutory mandate to convert to a digital format. Second, a hard deadline is unnecessary given that DAB uses an in-band technology that does not require the allocation of additional spectrum. Thus, the spectrum reclamation needs that exist for DTV do not exist here. Moreover, there is no evidence in the record that marketplace forces cannot propel the DAB conversion forward, and effective markets tend to provide better solutions than regulatory schemes.

16. iBiquity argues that in the early stages of the transition, the Commission should favor and protect existing analog signals. It states that this could be accomplished by limiting the power level and bandwidth occupancy of the digital carriers in the hybrid mode. At some point in the future, when the Commission determines there is sufficient market penetration of digital receivers, iBiquity asserts that the public interest will be best served by reversing this presumption to favor digital operations. At that time, broadcasters will no longer need to protect analog operations by limiting the digital signal and stations should have the option to implement all-digital broadcasts. We decline to adopt iBiquity's presumption policy because it is too early in the DAB conversion process for us to consider such a mechanism. We find that such a policy, if adopted now, may have unknown and unintended consequences for a new technology that has yet to be accepted by the public or widely adopted by the broadcast industry.

http://www.epa.gov/fedrgstr/EPA-IMPACT/2007/August/Day-15/i15922.htm

You are correct - don't let HD Radio boosters tell you otherwise!

Summa, Rob said...

This is what I don't understand. Could someone explain this to me? Why does H D Radio continue their campaign. When any other business is faced with a product that is not selling they cut their losses and take it off the market and save face for their next product.

The HD radio alliance defies every piece of marketing 101.

I know radio got tricked into HD. I have read enough of that story. You would think that since most of these chains are public companies that questions would be asked on why good money was thrown after bad.

I think that when the real story comes out we may see some federal charges against some of the ringleaders of H D Radio. I certainly hope so.

Anonymous said...

"Does this sound the slightest bit like a conflict of interest to anyone else?"

You should read the specifics about the kick-backs car manufacturers get from satellite radio. You wonder why they push it so hard in car ads? It's all bought and paid for by the satellite companies. No wonder both companies are billions of dollars in debt and need to merge.

If you think terrestrial radio has problems, spend a few minutes studying satellite. You'll be amazed.

Anonymous said...

"I think that when the real story comes out we may see some federal charges against some of the ringleaders of H D Radio."

You sound like David Sarnoff, fighting against FM in the 50s.

It took 30 years before Armstrong's folly became a success. Too bad he was dead by then.

Anonymous said...

"First - They were non-revenue ads. They made no money. All they did was eat inventory."

It was excess inventory. Certainly not in morning drive.

Aren't you the guy who wants radio to invest in itself? How can radio invest in itself, when you endlessly criticize the investment?

Back when you were in radio, there were maybe 5,000 radio stations. Now there are 14,000. That doesn't even begin to include new technologies. Deal with that kind of competition.

Back when you were in radio, there were ten musical genres. Now there are hundreds. NARAS has so many categories for their Grammy Awards, it takes 12 hours to give out the awards. What do you do with all those musical genres? All that music being released? How do you satisfy the demand that radio play what listeners want to hear, and each listener wants to hear something different?

Explain all that to me, oh master of the airwaves.

bobyoung said...

Yes it is amazing that this scam is still around, unfortunately there are some people in the broadcasting industry who really fell for this faulty jamming technology, they brag about receiving stations 20-25 miles away with an outside antenna no less, wow! Imagine that! 1956 TV was better than that and a whole lot cheaper, do not fall for the BS the IBOC Alliance slings. You will find HD receivers gathering dust next to the cassette rack in the Salvation Army for 2 dollars pretty soon.

Anonymous said...

"It was excess inventory. Certainly not in morning drive."

I heard some of those "excess inventory" HD radio spots in morning drive on the most-listened-to FM morning show where I live.

bobyoung said...

Definition of anonymous: (too wimpy to use real name)

Anonymous said...

"It was excess inventory. Certainly not in morning drive."

I heard some of those "excess inventory" HD radio spots in morning drive on the most-listened-to FM morning show where I live.


I guess that shows the sorry state radio is in, they have to give away prime time spots to promote their "savior" which is a little lead balloon, I would have said big but no one except radio people even know it exists and 90% of them hate it and know it's a scam.

Robert D Young Jr
33 S Main St #2B
Millbury, MA
KB1OKL

Anonymous said...

"Back when you were in radio, there were maybe 5,000 radio stations. Now there are 14,000. That doesn't even begin to include new technologies. Deal with that kind of competition."

I hate to clue you in but Gorman is dead on right about this. You answered your own question. There are too many radio stations. Most of them are on HD radio. Others are needless class As that have never made money. (except for those who sold the licenses way back when) The message Gorman is putting out is that crap is crap no matter how you package it, deliver it, promote it or try to sell it.

"Back when you were in radio, there were ten musical genres. Now there are hundreds. NARAS has so many categories for their Grammy Awards, it takes 12 hours to give out the awards. What do you do with all those musical genres? All that music being released? How do you satisfy the demand that radio play what listeners want to hear, and each listener wants to hear something different?"

I want to read Gorman's take on this and I hope he replies. I will give you mine. Too much of nothing. We have a gazillion college bowl games. We have a gazillion awards ceremonies. They are there to syphon off money. When they stop making money they go away. The Grammys? Now that is a joke. What reality does the NARAS and the RIAA serve?

Gorman, fight the fight. You make sense to a lot of us who are managing and selling. Our product these days may as well be made in China and coated with lead.

Anonymous said...

Where does Hilary, Obama, John, Mitt, et al stand on media consolidation?

We know where Bush and Clinton stood. Just look around you.

Pinnochio lives on as Sgt. Bilko said...

You want to read the biggest LIES of all. This is the story from the HD radio Alliance today. It is the one Inside Radio mentions. LIES LIES LIES LIES LIES. How does this guy get away with it?

GSD&M Preps $200 Mil. HD Radio Push




JANUARY 07, 2008 -

Omnicom Group's GSD&M Idea City has landed a yearlong creative project for the HD Radio Alliance with estimated media spending of $230 million, according to both client and agency.
There was no review for the business, which had previously been handled in house. Katz Media in New York handles buying chores.

Austin, Texas-based GSD&M expects to produce about 10 radio spots per quarter this year. Because of the unusual media weight of the campaign, the agency contends the push could rank among the largest radio-driven efforts of all time.

San Antonio-based HD Radio Alliance is a coalition of owners and operators that includes Beasley Broadcast Group, Bonneville International, CBS Radio, Citadel Broadcasting/ABC Radio, Clear Channel Radio, Emmis Communications, Entercom, Greater Media and WBEB, Philadelphia.

The $230 million figure represents the value of the media to which the partners have committed. The alliance spent $20 million on ads in 2006 and $30 million through October 2007, per Nielsen Monitor-Plus, but that only counts spending on ads using the "HD Radio Alliance" tag and does not include the value of all the time dedicated for the effort.

GSD&M has already begun producing work. The ads feature the voice of cartoon character SpongeBob(actor Tom Kenny) as a conventional car radio calling its owner and leaving messages as if it's a jilted lover. "You know, I could totally pick up those new extra HD stations if I hit the gym," the radio says in desperation. "Is that what you're into now? Huh? Call me!"

The spots break this month. They are tagged with embedded co-marketing of HD radio partners such as Wal-Mart and RadioShack, as well as plugs for electronics manufacturers such as Sony, JVC, Dual, Apple, Polk Audio, Best Buy, JBL and automakers such as BMW and Ford.

In fact, the agency came to the alliance's attention through its national campaign for BMW, touting the HD radio option with the tag, "HD radio: Discover it in the ultimate driving machine."

"Over the last two years, the alliance used radio inventory to promote the partnerships with companies like RadioShack and Best Buy," said client CEO Peter Ferrara. "But while we've been trying to carry the HD Radio message to consumers, everyone has been doing it their own way. We need to move from awareness to intent to purchase, and messaging will be the real driver to connect to the consumer." Ferrara said that while previous campaigns drove awareness to 77 percent, only 33 percent of consumers understand the new consumer electronics technology."

PocketRadio said...

"Almost 70 Million Consumers Will Have Either an HD or a Satellite Radio by 2012"

"Parks Associates finds that satellite radio subscribers will increase from 20.5 million in 2008 to 39 million by 2012. HD radio adoption will also increase, growing from 4.2 million in 2008 to 30 million by 2012."

http://newsroom.parksassociates.com/article_display.cfm?article_id=5001

Some more misinformation manufactured by Parks Associates - of course, this is being picked up in the media.

Anonymous said...

How is Bilko able to get away with this time and time again without any recourse. Don't the radio chains realize that this makes them look bad? Agencies, accounts, writers all read these press releases and if they check for themselves they learn that Bilko is full of it and that none of his claims are true. No one knows or cares about Bilko and he will probably ride off into the sunset with bags of money unless someone can pin something on him regarding where the money is really going. What they do remember is that radio being an accessory lied! This makes radio look bad, bad, bad.

Radfan said...

I live in Mentor, Ohio. I fell for the hype and bought an HD Radio earlier this year. I cannot pick up the HD side channels most of the time and even the main station gives me problems. Forget antennas. Nothing works. It is a flawed system. I should mention that when I did pick up the side channels the programming was terrible. I ended up returning it to Crutchfield which tried to talk me out of returning it. Do they have an investment in HD radio? For all of you supporters of HD radio - believe me it doesn't work/

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