Radio: The U.K.'s Digital death notice

HD Radio Alliance head Peter “Sgt. Bilk-o” Ferrara came out of hiding this week to fallaciously proclaim that HD radio-only stations – those that you can hear only on an HD Radio receiver - are writing business and making money. He named two stations – Clear Channel’s Z-100/New York and Emmis’ KSHE/St. Louis as examples.

Let’s cut to the chase.

Bilk-o, prove to me that money exchanged hands from client to Z-100 and KSHE – exclusively for buying time on their HD side channels.

You can’t.

These are strictly value-added bonus spots.

Right? Right.

They’re not even spots. They’re similar to public radio underwriting announcements – except unlike public radio, which receives money from them, radio’s not seeing one cent of additional revenue. The stations pitched their clients the opportunity to take part in a new experiment – at no cost or obligation.

Right? Right.

Shall we read between the lines?

KSHE admits that the “announcements” on its KSHE2-Klassic HD channel are from two clients that have “long-term relationships” with the terrestrial station: Doc’s Harley Davidson and Cetero Medical Research. Each’ll get one 20-second top-of-the-hour announcement – rotating twelve times a day for the next year.

Z-100, on the other hand, gave away the store - running four ten-second announcements per hour for Verizon. That adds up to 96 Verizon announcements per day.

One of the new lines being used to hype the alleged value of HD Radio is that it could bring in local advertisers that don’t have the budget to buy traditional radio. At the prices I’m being quoted these days to advertise on terrestrial radio – HD Radio’s rates must be targeting shoe-shine boys and lemonade stands.

You can’t make this stuff up.

Go ahead. Show me what I made up.

Poor Bilk-o. He has a tough job trying to remember which lie he told and to whom.

It gets better.

The research company SNL Kagan claims that HD Radio revenues will reach $1 billion by 2011. That’s a whole lotta shoe-shine boys and lemonade stands.

Researcher and RAIN editor Kurt Hanson did the math. His figures, which were based on a blue sky assumption – and the improbability of an installed base of 4 million HD Radios in the U.S. – had its best-case scenario revenues at $55 million – not the $1 billion Kagan claims.

Memo to Kagan: I’d check the chip on that calculator that Bilk-o gave you.

Either that or stop fitting your research results to what’s in Bilk-o’s brain.

Reality check: HD Radio isn’t going to bill anything – period.

Bilk-o, you neglected to provide updates on what’s the latest news from other countries where digital radio has been marketed.
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What we call HD Radio in the states is known as DAB – Digital Audio Broadcast – overseas.

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Ever hear of GCap, Bilk-o?

Of course you have. You just don’t like to talk about them.

In 2005, GCap became the largest radio company in the United Kingdom – the outcome of a merger between GWR Group and Capital Radio.

GCap’s pulling the plug on two more of its digital stations, Planet Rock and the Jazz. This adds to the three other digital channels they’d already silenced.

The only GCap digital-broadcast stations remaining are those simulcating their terrestrial stations, which include hit radio CapitalFM, classical Classic FM, alternative XFM, and Hip-Hop/R&B Choice FM.

GCap says that digital radio is not economically viable. They’re also selling its piece of Digital One, a national broadcasting platform for digital stations. They just want o-u-t.

Digital radio listening accounts for nine percent of total radio listening in the U.K. – but digital-only stations make up less than four and a half percent of total listening.

Bilk-o, if you had one tenth of one percent with HD Radio in the states you’d call it an overwhelming success.

GCap's CEO Fru Hazlitt told the BBC that it sees better prospects in FM and Internet radio – and that digital radio was too expensive and wasn’t embraced by consumers the way the company had anticipated.

Richard Wheatley, the CEO of Local Radio, which owns 28 stations in the UK, said digital radio did not have any killer application and that his listeners were moving to the Internet for their alternate radio use.

Anyone with a computer already has everything they need to listen to thousands of radio stations worldwide.

How do you compete with that, Sgt. Bilk-o?

Between 1999 and early 2001 when I was an owner of the Internet radio and TV portal Radio Crow (and most U.S. Internet connections were 28.8 dial-up), we promoted DAB to our U.K. users – and carried streaming audio of the DAB-only stations.

Unlike HD Radio in this country, where most side-channels are on automatic pilot – the U.K. digital channels were, for the most part, well crafted and programmed. Even then, the feedback we were getting from our U.K. users was: why buy a DAB receiver when one could get the same channels on the Internet for free?

Free.

It’s been said that giving up nicotine is harder than heroin. I think it’s even harder for Bilk-o and his layabout friends at the HD Radio Alliance and the NAB to give up lying.

Leaders are those who jump in front of crowds that are already moving.

Bilk-o, you’re not one of those.