Why HD Radio is NOT the future

Who needs HD when you have Internet radio - or as its users in the States prefer to call it - streaming? The future is overseas and it's only a matter of time before it arrives here.



How it's being marketed:



....and how to hack Sony to get full Internet radio service beyond Shoutcast:




Peter "Sgt. Bilk-o" Ferrara....have a happy St. Patty's day.



Listen to streaming Internet radio from Ireland.

HD Radio: Why no one is buying

You gotta eat – that’s why.

Some food costs have increased at a rate not seen since Gerald Ford was President.

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For the past two decades the cost of food staples – eggs, dairy, and flour grew minimally. Now, the U.S. Labor Department is informing us that the same food staples have increased in double-digits. Dairy is up twenty-six percent, beef – fifty.

I paid thirty cents a gallon more for gas on Wednesday than I did the previous Friday.

But that’s not the problem.

The average household spending for gas is around four percent. Food accounts for thirteen percent!

Let’s go back one year ago today. You paid sixty percent less for eggs. You paid thirty percent less for veggies.

Oil + production and transportation costs = even higher food prices.

The demand for corn and soybeans for alternative fuel sources like ethanol and biodiesel, corn prices have more than doubled and soybeans have tripled in the commodity markets over the last two years.

The rise in corn prices also adds to cost of livestock feed, which translates to higher prices for meat, poultry and eggs.

And a bad wheat-growing season caused their prices to triple.

The higher food costs hack away at discretionary income and slaughter consumer confidence.
When one spends more for the basics - other expenditures have to give.

Add this: Few are making more money than they did two decades ago and more are out of work.

The weakened US dollar, which has fallen to historic lows against other currencies, is also impacting consumers with higher prices to make up for the loss in value.

Inflation fears increase, which in turn make commodities a buy to investors viewing them as holding value during inflationary periods. Follow this. Investors buy. Demand grows. Commodity prices go through the roof.

If you were around in the seventies, you remember those nine percent a year increases in food prices.

Get this. They’re already up a full five percent from a year ago. That’s over double the average rate of the previous decade. Some forecasters who follow such things now predict an annual food increase of seven and a half percent!

Do you really believe anyone is going to spend a hundred bucks or more on an HD Radio?

Just asking.

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photo: President Gerald Ford in 1976 with Dick Cheney (left), then Ford's chief of staff, and Jim Baker.
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The weekend edition of All Things Considered on National Public Radio will feature a special piece on The Buzzard book.... and see a classic Buzzard St. Patrick's Day ad here.

Elliot Spitzer: Pay-for-Play

How about that? The sanctimonious one was caught with his pants down.

New York governor Elliot Spitzer, who extracted a few million from the radio and record industry, had his career come to a sudden halt for the price of what a parallel one top 40 add was going for in 1985.

Five grand – actually $4,300, Courvoisier from the mini-bar, room and a tip got the guv two and a half hours of something he couldn’t get at home with a 5’ 5” 105-pound brunette call girl who went by the pro name Kristen.

Or as he put it, ".…acted in a way that violates my obligations to my family.”

Questions, questions:

What do we call him now? Former governor or client number nine?

Did the Emperor’s Club take plastic? Is that $4,300 and change discreetly listed on your credit card statement as MultiSafePay?

Oh, I'm sorry. I forgot. Spitzer said "no questions - please."

The incident proved that Spitzer was as dumb as the radio and label people that gave him an easy in to extract multi-millions from both industries.

Spitzer’s investigation of payola in the radio and records industry was going nowhere fast when both industries observed Omertà. He was about to can the inquiry when one of his team, on a tropical vacation, overheard a drunken label executive, sitting at the bar, letting his liquor do the talking. While he boasted of how his the labels got music played on radio, she took notes, connected the dots, and Spitzer closed the deal.

The “legal payola” deals were the hardest to crack. Technically, they weren’t illegal. Legal payola was written off by participating stations as non-traditional revenue, where airplay was quasi-legally being bought and sold – either as a paid spot (like Arista buying overnight spins for Avril Lavigne to boost her airplay chart rotation) to radio stations contracting above-board deals with independent record promoters to have exclusive airplay influence-peddling rights (like Randy Michaels who set up the template with Clear Channel for other chains to follow).

Spitzer made his real mark at identifying the value added – where staff members were cutting side deals for trips and merchandise in exchange for airplay – most, if not all of it, unknown to the radio station’s corporate offices. The investigation uncovered e-mails and office correspondence, which exposed numerous pay-for-play schemes – directly negotiated between radio employees and the labels.

Many of the execs running the labels today try to play tough-guy cool by wearing their sunglasses at night. In reality, most of these guys are lucky sperm club trust funders that’ll fall into a fetal position and cry if you say “boo.” They don’t get the code of the street: Never write when you can speak. Never speak when you can nod. Never nod when you can wink, and never use your corporate office’s e-mail to spell-out specifics to an airplay side deal with David Universal or anyone else for that matter.

When faced with probable jail time, the caught canaries sang and Spitzer got the labels to cough up $50 million to New York State.

$50 million is chump change to the labels. They routinely cheat artists out of that much in royalties a day. Radio's a different story.

Spitzer fell because he believed his own hype. He flaunted his Princeton and Harvard Law education. He bragged of his rise in the ranks from cynosural prosecutor to crusading attorney general to New York State governor. But somewhere along the way he forgot that he puts his pants on one leg at a time like everyone else – or in his case…

When he did his witch hunt on radio and records he tried to classify anyone associated with radio or records a guilty participant – and put a lot of innocent people through the ringer. Yesterday, he did the same to his wife and his three teenage daughters.

That must be the new mea culpa. Call the press, make a statement, trot out the family, admit guilt, and take no questions.

Spitzer’s using the same playbook as former Jersey governor Jim McGreevey, who admitted having an affair with a man under his employ or Senator Larry Craig, who admitted before he denied that he was playing footsie in the stall of an airport men’s room.

Hookers are hot in politics these days. There’s Bush administration State Department official Randall Tobias. He refused to provide AIDS relief dollars to countries that allowed prostitution. Then he got caught having call girls stopping by his condo. Let's not forget Louisiana Senator David Vitter whose name turned up in the D.C. Madam Deborah Jeane Palfrey ‘s phone records.

Neil Young, one artist who was not willing to share his royalties with participating contemporary hit PDs back in the eighties, released a song called “Payola Blues,” which included the line, “Here’s five thousand/that oughta get it on.”

I think Elliot Spitzer could provide Neil the inspiration for a hit song.

He should rush back into the studio and re-record the track with new lyrics – “Here’s five thousand/let’s get it on.”

See a David Helton Len 'Boom' Goldberg comic strip here

Radio: Stormageddon

We were due.

If you live in a four-season climate, you can count on at least one crippling snowstorm per year.

We got ours Friday afternoon through late Saturday night.

It had all the stormageddon qualities – high winds, near-zero visibility, and snow measurable in feet.

The highway patrol reported that their count of accidents on the interstates and highways hit triple-digits.

Even the airport was forced to close when its team of plows working the runways couldn’t stay ahead of the accumulation.

Remember when you had to travel in a severe storm, radio – especially a news-talk format - would serve as a lifeline?

Now let’s go to WTAM, the news-talk station in Cleveland.

During a gridlocked Friday afternoon rush hour, its host Mike Trivisonno told his listeners that the storm was “nothin’.” He accused the television meteorologists of overestimating the storm, and that it would actually produce around an inch and a half of snow.

True, nearly every snowfall is advance-promoted on TV newscasts as severe, especially during the sweeps – but, clearly, this one was the real deal.

WTAM is owned by Clear Channel, which also owns two other news-talk stations in Ohio: WLW in Cincinnati and WTVN in Columbus. The storm is travelling up the state from the south. You’d think they’d be linked since what was about to hit Cleveland had already impacted those markets with treacherous weather.

A while back, Clear Channel downsized its traffic report department – and now lacks a sufficient staff to cover the region during inclement weather conditions. That was evident on Friday.

But on WTAM we heard that the storm was “nothin’.”

Other Cleveland stations were in usual programming. Those few with live hosts made sporadic comments on weather, based on what they were seeing out of their studio windows.

The only news and information that came close to accuracy came fron television newscasts and their station web sites.

I don’t hold accountable the local radio stations’ management. They did their best with what they have at their disposal, which isn’t much. They don’t count the shots, they don’t revise the budgets and downsize the staff. Corporate does.

Fish stink from the head.

The latest babblegram from David “Fumbles” Rehr and the NAB insists that radio still does “localism.”

Could've fooled me.

And Fumbles – let me answer your claim that new localism proposals would put small market stations out of business.

Let’s fast forward to early Saturday afternoon. The storm is still raging - and I’m travelling in it.

I got weather updates and road conditions from the local TV stations, which were doing continuous coverage of the storm – but we’re talking about a high-wind storm that’s dumping inches per hour. Conditions change rapidly.

I put WTAM on. They’re carrying the Cavaliers game.

I hit scan. Nearly all voice-tracking or syndication.

I finally hit upon a station providing constant updates on road closings and other pertinent storm information.

The station?

A locally-owned 500-watt daytime; 57 watt night suburban neighborhood station from Oberlin, Ohio – about 35 miles southwest of downtown Cleveland. WDLW-AM.

They’re known as the “Kool Kat” and carry a locally-programmed and hosted oldies format – a real oldies format. Fifties, sixties, early seventies. They’re one of the stations I listen to when I’m on terrestrial .

They updated road conditions and community news after every song or two. Since it’s an oldies station – and its songs are mostly two to four minutes in length, one was never more than two to eight minutes from an update.

It’s a veritable local station, which carries local newscasts covering their city of license and surrounding regions - including all of Lorain County.

Maybe that's how they're able to sell time.

Oberlin is in one of the fastest-growing counties in the state, which makes its localism even more important to its emergent population.

A few years back, I was telling a manager of Cleveland station about this “Kool Kat” station – and how impressed I was with how they served their region.

He dismissed them a “local yokels” and predicted they’d be out of the format and carrying full-time syndication within a year.

Guess what? Those yokels are still doing local programming and were the most dependable and conscientious at being local during the season’s worst storm.

Woe is HD

Twelve years.

Has it been that long since publicly-traded radio groups pitched their wares claiming that radio was a forced-listening medium – and that its users were actually held captive – and were forced to listen to it in their cars?

Don’t believe me? I’ll dig out some old Wall Street propaganda from ten years ago when radio stocks were being hawked that way.

The industry would lash out at anyone who would dare cast doubt of the accuracy of those statements.

I still have some of the scathing e-mails I received from some of those radio stock peddlers for challenging their claims.

Now we have many don’t-say-I-didn’t-tell-you-so in-car options.

Satellite.

iPod plug-ins.

Sync.

Let’s move on, quickly, to the 2008 Geneva Auto Show and C-Net’s coverage of radio’s newest in-car challenge – here.

There's captive and captivating.

Oh, did I leave HD Radio off the list? Yes, I did. On purpose.

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.

Radio: Is there a future?

Update!

JOHN

Good morning, I am Dan Halyburton Market Manger for Emmis NY and 101.9 RXP

On March 4th a blog entry ran about an AD for Announcers for the new station. The source was Crain's.

The Crain's people reported that RXP was paying outrageously low salaries.

That Ad was categorically WRONG.

After a reporter at Crain's talked to our Marketing Director about developments at the station including hiring an air staff, The reporter took it on himself to write up an ad for the announcer positions without our help or input. He didn't know the salary so he called a head hunter and the numbers reported came from her. Clearly they are WRONG way below Aftra scale and we are paying above scale.

I wrote the blog to correct the information but because the blog is still up even with my correction which is ten entries down.The incorrect information continues to circulate.

I would really appreciate if you would delete the string. The base of the piece and the responses are clearly the result of an error and it's causing discussion and confusion about the station during an important formative time

THANK YOU

Dan


Dan Halyburton
Senior Vice President
General Manager
Emmis New York

101.9 RXP
HOT97
98.7KISS FM

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A friend e-mailed me this want ad from Crain’s New York Business over the weekend. It read:

STATION WRXP-FM 101.9

JOB DESCRIPTION Looking for on-air personalities who can communicate their passion for rock music while spinning a good playlist

MOST IMPORTANT TASKS Hosting radio shows and writing online content and reviews

CREDENTIALS NEEDED Five years of radio experience, familiarity with the New York area and local rock scene

SALARY $40,000 to $50,000, based on experience

RECRUITER Internal

UPSIDE Having creative control over a radio show

DOWNSIDE The risk of working for a startup station

In February, Emmis Communications, owner of 98.7 Kiss-FM and Hot 97, launched WRXP 101.9, an adult rock station heard in the tristate area. In a market where formatted playlists rule, the station, formerly CD 101.9, now features a mix of rock songs from different genres chosen by on-air personalities and staff.

It’s format could be best described as “free form adult album alternative.” Here’s how its presented on their web site:

Welcome to 101.9 RXP – the New York Rock Experience. When we set out to create the new 101.9 RXP, we asked ourselves, "What would WE want to listen to on a radio station?" Several words kept coming up: Variety. Intelligent. Local. Here's what we mean:

Variety
The Rock Experience isn't just about one era or style of music. At RXP, we wanted to create a station that didn't draw the traditional lines in the sand that have compartmentalized radio stations into narrow formats over the years. So, we bring together classics, alternative, new music and a few surprises in a way no New York radio station has done in many years.

Intelligent
You can hear a lot of shtick and typical "radio hype" all over the New York radio dial. We know our listeners are smarter than that. So, we're building a team of knowledgeable and passionate DJs and staff who don't believe in pandering to the lowest common denominator. Respect for the music + Respect for our listeners – that's RXP.

Local
New York City has an amazing musical heritage, so RXP won't be relying on corporate playlists. The music we play will be chosen and presented by our local, New York staff and DJs. We'll pay close attention to the music, concerts and events that are part of New York's rock scene and support up-and-coming local artists as well.

Let me put it another way. The New York radio graveyard is littered with a number of stations that tried similar rock format experiments, including the established WNEW-FM in their final days.

And did I read those salaries right?

They are looking for air talent to work in New York – the #1 radio market in America – for $40,000 to $50,000 a year? I’d assume a six-day week is a given.

And you need five years of experience? In what? Poverty?

Let’s compare what that salary is worth in major cities in states having presidential primaries tomorrow:

Cleveland, Ohio - $29,100.

Columbus, Ohio - $29,452.

Dallas, Texas - $29,110.

Houston, Texas - $28,425.

Burlington, Vermont - $36,644.

Providence, Rhode Island - $37,361.

I forwarded this Crain's classified to a couple of radio veterans. They replied:

“For 50K you can live at the Y or live in Scranton, PA and commute 300 miles daily. Sad. And how long will that creative control over your show last.”

“Yeah, they'll get some really good talent for that kind of money. The pick of the litter. And I do mean litter.”

You get what your pay for. That includes respect and dignity.

Ask yourself these questions:

What message does this send to radio air talent?

What message does this send to the ad community?

What message does this send to Wall Street?

You already know the answers.