Elkins, Will

Start: 1/24/07, 12:00 pm; End: 1/24/07, 1:07 pm

Team 4

Leader: Leanne Gray

HD Radio: The Terrestrial Solution

For many, broadcast radio has fallen out of favor as a popular media outlet. Satellite radio and iPods now compete for listeners’ attention with clearer sound quality and more diverse selection. HD Radio represents terrestrial broadcasters’ best chance to recapture the market and maximize traditional and non-traditional revenue sources’ profits.

References for Presentation 2/15/2007

  • Personal Interview, Jeremy Whiting. February 9, 2007.
  • Citadel Broadcasting company presentation. February 3, 2007.

Elkins, Will

Presented 2/15/2007

Team 4

Leader: Leanne Gray

Talking Points for TC 200 Presentation

HD Radio: The Terrestrial Broadcasting Solution

Historical Paradigm Shifts (slide 1)

  • Beginning with first commercial licensed radio station in U.S., KDKA Pittsburgh, radio became the main form of broadcast entertainment
  • Sporting events, weekly serial shows, news, variety hours
  • This era lasted from the 1920-1950’s
  • This changed with the advent and introduction of broadcast television to the home in the 1950’s
  • Programming that was once on radio now moved to TV
  • NBC and CBS moved to TV so their interests evolved away from radio
  • Radio lost dominance and began narrowcasting and changing from broad entertainment formats to more specific musical ones

Historical Paradigm Shifts (slide 2)

  • Beginning in the 1950’s, radio becomes an option in new cars and is still around today as a standard feature despite consumers’ changing tastes
  • FM began in 1961 as an alternative to AM.
  • Better sound quality, farther transmission, different formats for stations
  • Radio now in 2 bands, but still strong
  • But now there are two big threats to traditional broadcast radio:
  • Satellite radio: varied format, unedited with no FCC regulations, subscription based (GM and XM Radio have a deal where all new cars come with a 3 month trial period of XM. Most people use it for free and then do not renew)
  • iPods/iTunes (and other download music sources and players): allows for personal selection of music, take wherever you go with MP3 player
  • The NPD Group (marketing research firm) found in 2005 that 77.2 million people listen to computer stored music (up 22% the previous year) and there was a 127% increase of people listening to MP3 players; traditional radio listening steadily declined by 4%

The Solution

  • HD Radio
  • Currently 1183 stations serving all major radio markets and expanding
  • Reach about 80% of the population. By the end of 2007, there will be 1200+ stations reaching 90% of the population.
  • In MI, the lower half HD covered by Greater Media Detroit and asked to spearhead radio initiatives for the upper peninsula

HD: WTF

  • Based on In Band On Channel (IBOC) standard engineered by

USA Digital Radio Partners in 1991

  • USA Digital Radio Partners = CBS, Westinghouse, and Gannet Publishing
  • 1 yr. after creation, first AM and FM IBOC transmission by AM 1660 Cincinnatiand WILL FM Urbana, IL
  • In 2000, USA Digital Radio Partners merged with Lucent Digital Radio creating iBiquity Digital Corporation, specifically to engineer HD radio format
  • HD: has been called Hybrid Digital (because of how the signal is put together), High Definition (after the TV’s arrived), and can also be just marketing BS because iBiquity trademarked it when used for radio

How Does It Work?

  • Just like a regular radio transmission, which is how you can listen to a HD station on an analog radio, but the digital and analog signal are combined on the carrier wave.
  • The digital signal allows for information such as artist name, song title, and station call letters to be displayed on the receiver interface.
  • The signal is compressed since it is digital. This allows for more multicasting and enhanced services to be sent out on the carrier wave because the compression crammed the audio signal into a small portion of the assigned frequency.
  • HD receivers sort out refracted signals from off buildings and other objects which become static and distortion on analog signals. This gives the HD its quality sound.

Why HD? Consumer Point of View

  • The signal and sound quality is enhanced because of the sorting of refracted signals
  • AM sounds like FM does now on an analog receiver
  • FM now CD quality
  • Free: no subscriptions, only one time fee to buy an HD receiver
  • HD car stereos same price as an analog ($150’s-$200’s)
  • Shelf radio higher because newer and the price will decline with time. This is good because now with the hybrid signal you can still hear your favorite radio station. But all stations will eventually be turning digital, so by then the receivers will be more affordable.
  • Satellite offers many channels with specific formats, now HD radio can too
  • Compressing the hybrid signal allows for multicasting (more than one signal on one frequency)
  • Can be totally different formats on the same wavelength
  • Example: Riff2 (WRIF FM Detroit), offer familiar music with artists the listener might also like on the HD only channels, more audience personalization
  • Satellite radio has a hard time keeping up with local communities’ interests, tastes, and news. In Detroit, local morning show hosts Drew and Mike continuously beat out Howard Stern on Sirius Satellite in the Arbitron ratings. HD is still the same stations that have the local community in mind.

Why HD? Radio Station Point of View

  • Interviewed Impact 88.9 FM Program Director Jeremy Whiting
  • Impact became an HD station in 2004, becoming one of the first college stations to do so and the first college station in MI.
  • Reasons for a broadcaster (non-commercial ideas): to provide best sounding radio for the community to keep listeners and loyalty of those listeners, stay in trend with other stations, direct link to listeners with request line phone number and sponsor information (phone number, address, specials) on HD display
  • Reasons for a broadcaster (commercial): gain listeners and lure listeners away from other entertainment mediums like iPods and satellite radio, multicasting gives more diverse content to the audience with more of their input, utilize non-traditional revenue sources such as during a national company ad have scrolling locations in the area with phone numbers and possibly coupons available only through listening/seeing them on the HD channel

Not To Distant Future

  • New services being developed mainly by iBiquity
  • The “Buy” button allows for instant e-commerce purchases of products being advertised or concert tickets and CD’s by the artist being being played
  • Store and Replay technology is like a TiVo or DVR for your radio. You can rewind a live song or record it for future listening.
  • On Demand weather reports, local news, and traffic
  • Traffic reports in real-time that are sent out by the local station and displayed on the car’s navigation system display
  • ClearChannel and Entercom Communications idea
  • Less Commercials: an Arbitron survey showed that the increasing number and frequency of ads caused listeners to decrease their radio listening by 3 hours to 20 hours a week since 1993
  • Mandatory cutting back length of commercials from :60 sec to :30 sec if you want the ad to be played on their stations