Guy Wire’s Predictions for a New Decade
     

Crystal Ball ©iStockphoto/bülent gültek

What a relief it was to see 2009 and its tumultuous decade pass into history. The past few years and the worst recession since the Depression have been especially painful for all broadcast media. But the turn of the calendar always offers renewed hope, new opportunities and a chance to let the crystal ball reveal the future.

Your masked radio soldier of solder and syntax usually makes predictions this time of year. Let’s not worry about the bad news and the doom-and-gloom stories about radio dying. Let’s concentrate on what can happen if we all keep focused on adapting our business to the trends and currents moving our listeners forward.

By almost all recent surveys and polling accounts, terrestrial radio continues to enjoy very wide appeal and is used daily by about 228 million American consumers. The Internet may be our most vaunted competitor but it’s also a valuable partner that extends our over-the-air services. In 2009, the growth of wired Internet connections in the United States started to level off.

OBAMANOMICS TO THE RESCUE

The new economic order of government bailouts, tight money and declining asset values has changed the way business does business for just about everyone. No longer do big failed companies liquidate and just go out of business. Nor do competitors buy them up at fire-sale prices to save their brands. Lenders are not using their bailout and stimulus money to make loans, so there’s very little buying and selling.

What this means for radio is that companies like Citadel/ABC, Cumulus, Clear Channel, Regent and a few others should just reorganize and let the investors take the hit. CEOs and managers who made bad deals and incurred mountains of debt still keep their jobs. Their stations, already stripped down to the basic necessities of reduced staff and resources, just keep on keepin’ on. As long as radio can generate decent cash flow, we’ll see more debt-ridden groups reorganize.

It also means Sirius XM satellite radio is here to stay. While its subscription growth has slowed to a crawl and they’ve never made money, there is just enough demand and promise to keep the product available as a dashboard option. That’s enough for investors who are willing to keep supporting it.

When wireless IP radio reaches critical mass, Mel’s successors will turn off the satellites and rely on the Internet. The delivery platform is not the key ingredient in their product. Programming content is. When IP does become fully viable, Sirius XM will merely drop “satellite” from its name and turn off the birds, saving a ton of money.

Terrestrial radio will also encounter a similar crossroads, possibly even sooner than satellite, but it’s not all that important for us to worry about when it will actually happen. Successful stations that have already developed their digital assets with a strong Internet and new media presence are well positioned to be in the mix.

The challenge, now and forever, is keeping the content fresh and compelling while continuing to super-serve our local markets. That job will be easier if we properly leverage the technologies available to us today.

EVENTUALLY, MAYBE, SOMEDAY

Almost everybody is predicting wireless IP ultimately will be the delivery platform for all mass media. But there are too many issues that have yet to be sorted out before we’ll have any clear idea of when that’s going to be possible.

Most of the challenge is driven by economics. Even in the large test markets, the nascent efforts of companies like Clearwire and the various cellular carriers trying to build out the needed infrastructure are gaining traction much more slowly than most observers expected.

There will likely be several more rounds of consolidation in the wireless arena and another generation or two of technology advance beyond 4G needed before we get there. Realize what’s required: seamless coverage and huge bandwidth capacity that can sustain literally millions of high-rate simultaneous connections in most all significant markets.

The demands of streaming video content likely will swamp radio’s need for streaming audio bandwidth. My crystal ball says making this all work the way consumers will need it is still several decades away.

THE HERE AND NOW

We can best effect change and improvement for our stations by how we attack the immediate challenges and opportunities at hand. There are too many radio stations that have yet to deploy many of the digital technologies available now to augment their core products. Along with RDS, interactive Web sites, Internet streaming, social networking tie-ins and audio/video podcasting, HD Radio has emerged as a key opportunity.

After almost two decades of development, I’m convinced HD has finally turned the corner of acceptance outside the industry. Say what you will about increased interference and cannibalizing ourselves with more channels, HD Radio for FM offers entirely too many impressive new improvements and features to be ignored or rejected. The newly approved digital power increase will only help ensure its long-term success.

There are now well over 100 HD Radio models available for purchase, many at prices under $100. Several pocket models are among them, including the impressive Insignia, now selling at discount for under $40. There really isn’t much of an excuse anymore not to buy an HD Radio receiver.

IBiquity’s Bob Struble knew all along the key for HD success was getting the automobile industry fully on board. The CES last month offered a convincing display of additional support. Ford is leading the way, along with 15 other car companies that will add HD in the factory-installed standard radios of many of their 2011 models.

If your station’s transmission system is at or near the end of its life cycle and you haven’t yet converted to HD or updated for the power increase, buying a new transmitter or antenna is still a wise investment. There’s plenty of time for the current generation of equipment to be fully amortized before you have to worry about wireless IP taking over.

RADIO DARWINISM

Despite the opportunities available to FM stations that will help us stay competitive in this Internet-dominated world, our AM brothers are left holding the short stick. Even though HD offers higher fidelity, AM HD is not likely to gain many more converts. There are simply too many forces conspiring against the senior radio band.

The new wireless handheld devices that are finally including radio like the Zune, iPod Nano and new cell phone models don’t play AM. And none of the combo Internet/FM wireless desktop radios do either. By law, it used to be that all radios had to include both AM and FM. By necessity and design, AM is now being engineered right out of most of the truly exciting and attractive electronic gadgets consumers are buying.

Natural attrition and survival of the fittest will continue to whittle down the ranks of AM stations. The smaller privately owned stations that have not maintained vitality and relevance with their communities and have not kept up with technology trends truly are an endangered species. Any business that loses relevance and the ability to compete should be allowed to fail and let a superior technology platform replace it.

The best that AM can hope for as a valuable service going forward this decade will be for the stronger stations to seize every opportunity they can find to extend their brand presence. Some will improve coverage by expanding directional patterns and buying off other stations that limit their allocations potential.

Look for more of the successful news, talk and sports AM stations to also appear as FM HD2 and HD3 stations. Some will replace marginally performing FM formats in co-owned clusters, while others will add suburban FM simulcasts. The quiet migration has been underway for a few years now.

The proposals from the Minority Media and Telecommunications Council and the Broadcast Maximization Com¬mittee calling for TV Channels 5 and 6 to be reallocated for radio expansion and AM migration are logical and compelling.

But don’t hold out any hope this will ever be adopted. The TV counter lobby will neutralize the effort and radio will be stuck with its existing bands. The FCC will spend most of its time and attention carving up UHF TV chan¬nels for wireless broadband providers.

Arbitron’s PPM revolution already has spawned a number of major changes in the markets where PPM has become the audience measuring stick. Middays are now as important as mornings and many expensive morning shows have been jettisoned. More music and less talk seem to be imperative to hold audience; yet successful talk stations in most markets are holding their own.

We can only hope radio’s decision makers will not let their cost-cutting knives cut too deeply into the last remnant of what separates us from jukebox automation and Internet radio: live and local real personalities who connect with their audiences in refreshing, enlightening and entertaining ways each and every day.

I predict the smart ones will use restraint.

Guy Wire is the pseudonym for a veteran broadcast engineer.

Comment to
rwee@nbmedia.com.


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Comment List:

This Guy Wire dude needs a reality check - big time. In addition, he needs a new name.
By Samual on 2/25/2010
The majority of broadcasters have no intention of going digital and the majority of listeners don't care about it. Tell me smart ass - why is that?
By Sam - NOT FARCE on 2/25/2010
More tiresome HD Radio rants by Guy Wire... boring.
By HDRadioFarce on 2/25/2010
"Pity on them. They must be miserable constantly." This is great - LMFAO!
By HDRadioFarce on 2/27/2010
Guy Wire is a coward, hiding behind a pseudo-name, having attacked Bob Savage (WYSL) in the past for speaking out about this HD Radio Farce. The automakers are hiding the true costs of installing HD Radio, which works even worse in-dash (BMW had to submit a PUMA Case), in expensive navigation systems, where consumers are stuck with their HD Radio systems. Even Bob "The Huckster" Struble admitted that HD radios are not selling: "Insignia HD — I think this will be a nice little interim step for jogging or working out. It proves the viability [of the technology] and hopefully we'll get sales; but no, this is not going to sell in the hundreds of thousands... Radio alone — the sad reality of where it is — as a standalone device, it just doesn't exist anymore as a category. Nobody goes into Best Buy and says 'Where's the radio department?'" http://www.rwonline.com/article/87370 Yea, Guy, your guilt-trip that, "really isn’t much of an excuse anymore not to buy an HD Radio receiver", is admitting that HD Radio sales have been a flop - thanks! LMFAO! LOL! ROTFL!
By HDRadioFarce on 2/25/2010
Half a column for a little fizzle like HD radio (Consumer: what's that, satellite?) pull your head out of where the sun don't shine, HD is and always has been dead. If it weren't for NPR and a few other pigheaded nearly bankrupt clusters it would have been all over several years ago.
By BOBYOUNG on 2/25/2010
HD radio does ruin analog radio, all I have to do is turn my analog radios on both FM and AM and listen to the adjacent channel hash, and HD is already obsolete. Radio is having a terrible time lately, why is the alliance spending so much money on a technology (and I use that term very loosely) that doesn't work and no one buys, nor wants? And comparing the foldout of FM and HD is ridiculous, FM worked great and was just waiting for new programming and HD works terrible and anyone who has ever tried one knows it and the HD channels programming is terrible for the most part. Anyone who actually thinks HD will be successful better go back to business school.
By BOBYOUNG on 2/26/2010
Guy Wire should be censored because nothing but stupidity comes out of him. BTW I'm not the farce guy.
By Anonymous on 10/8/2010
These blogs should be censored. Because nothing but trash comes out of HD Radio Farce's mouth in writing. His credibility for being a good informant is a laughing joke. He's simply is an annoying spammer for the airwaves. And he is only helping iBiquity because of that.
By Anonymous on 3/2/2010
I love how these Naysayers make these quotes and claims about who is listening and who is not. It's still very early in the analog to digital phase. The naysayers don't want to move forward in time. They claim that HD Radio is ruining analog radio stations. That's a bunch of farce! People can find quotes and claim anything they wish and put in into a blog and claim its true. Just don't believe everything you hear and read. And that includes everything you hear from iBiquity. But one thing is certain: Their product is still alive after EIGHT years... and now is getting a digital power boost. So they are not dead yet. Which means they ARE relevant. Those they wish to blast it constantly... have their own stupid agenda - and have absolutely no better solution in moving FORWARD in technology and time. Pity on them. They must be miserable constantly.
By Anonymous on 2/26/2010
Another 'Farce' cronie! Indeed there is more than one. Why do you care of no one is interested in this product or no one is listening ??!! If it is a garbage product and no one cares... why do you care?? Because it isn't apparantly. Because it's getting to you! Who is the smart ass again then ??? Come again???
By Anonymous on 2/26/2010
@Anonymous - 02/25/2010: "Wait! we are sure to get another comment from HD Radio Farce anytime now... with a finishing touch of "LMFAO!" at the end of his rant !!" Depressing, isn't it? LMFAO!!!
By Anonymous on 2/25/2010
wait! we are sure to get another comment from HD Radio Farce anytime now... with a finishing touch of "LMFAO!" at the end of his rant !!
By Anonymous on 2/25/2010
ha! Already heard from HD Radio Farce. He's on the clock ! Thanks for advertising the relevancy of HD Radio. You are its biggest promoter, and you don't even get that! Thanks for playing. hahaha
By Anonymous on 2/25/2010
Thanks for the informative commentary and look into the near future. Now I am sure we are bound to hear from HD Radio Farce any time now... and that will only cement the relavancy of the very product he blasts every day... HD Radio. After all, if it was complete junk and a farce, no one would be talking about it (unless they are afraid of it). So there must be something to it. It's still around... so its relevant. Now is the time to move ahead into the 21st century folks. Analog radio (and especially crappy sounding AM) has no future today... with the stiffening competition mentioned in commentary above.
By Anonymous on 2/25/2010

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