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HD-Radio – What’s in Store ?
by Andrew McCaskey
Stuck Shifting Gears
For the past four years at CES, I have always been somewhat mystified by HD-Radio. Not so much the technology, but the fact that HD-Radio been able to hold on with continued investment offering a solution to a problem. The only difficulty is that it is not a problem that the consumer has, it is a problem that the broadcaster has – how to maximize the return on programming within its local market in face of real competition from podcasts, recorded music, and now the iPhone and other smartphones as Pandora and Stitcher chew up the music and short form streaming news business.
Satellite radio has it’s own substantial problems, and there is some doubt that the combined XM-Sirius will be able to survive the year with over a $Billion in debt, $300Million due this spring, and a retail channel heavily dependent upon OEM installs in GM Automobiles. Good luck with that one. And, if former Sirius subscribers are as un-impressed by the merger of the two programming streams as I am as an XM listener, surviving finanancially is just the first hurdle to jump. Continued erosion of subscribers and a murderous ‘cost per acquisition’ of new subscribers can still finish them off. If satellite radio goes belly-up, it is not necessarily going to throw much business towards HD-Radio.
Historically, radio has re-invented itself when challenged; in the 1940′s and early 1950′s the demise of radio as dramatic entertainment and morphing into music and news began. By the late 1950′s and early 60′s Rock and Roll and Top 40. Seventies- FM, Eighties and Nineties – Satellite and Talk Radio. Then consolidation, homogenization and Clear Channel. No wonder HD-Radio was cooked up. Time to re-invent as the decades changed – but this time a mis-fire.
It’s just a case of market confusion. Up to a certain point, providers are the market. After that, the product has to meet a need that consumers want to solve and are willing to pay for the solution. HDRadio has broadcasters on the hook. It just looks like consumers aren’t following along.
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