Sometime in the fourth or fifth grade I first heard the elephant joke that asks, “How do you get an elephant into an oak tree?” Answer: “Have him sit on an acorn and wait.”
(click thumbnail)The joke stuck with me through the years, not because it was funny, but for its aptness as a metaphor to many of the processes around us — that is, those that occur more by attrition and passive shifts rather than by proactive choice. The joke’s image also illustrates the lengthy development time involved in such cases.
As an Oct. 10 RW editorial noted, we are now beginning to recognize that the transition to digital radio in the U.S. may follow this course, as well.
Broadcast transitions are slow
Actually, this behavior is fairly normal, given that it follows the path experienced by almost all broadcast format introductions.
Perhaps we have become accustomed of late to digital consumer electronics introductions advancing more rapidly, and so we tend to measure all new systems by such metrics. Yet examine the recent advances in broadcasting systems, and you will see consistently slow uptakes at best.
Because broadcast formats change so infrequently, however, low speed is not necessarily tantamount to failure. As long as there is some continued forward movement, attrition ultimately prevails and the new format eventually becomes well established.
Consider FM radio, FM stereo, stereo TV and RBDS. None of these experienced meteoric growth out of the box, but eventually became the norm. (Digital television in the U.S. is a current example that is just now turning the corner after a slow and rocky start, and its natural progression has even been accelerated by government mandates.)
Slow and steady typically wins the race in the broadcast world.
At least that’s the way it’s worked in the past. Some argue that today such wisdom no longer applies because the competitive context has been so radically altered. These pundits point out that current broadcast formats have never had to cope with so many other potentially competitive introductions, most of which are enjoying far faster growth.
Others counter that while this may be true, it simply sets the bar a bit higher for broadcast formats to break through.
Witness DAB in the U.K., which after years of malaise — there and elsewhere, including Canada — the addition of new, compelling content (along with plentiful, cheap receivers and strong, multifaceted promotional campaigns) from U.K. broadcasters finally established a beachhead, and the format is now enjoying strong success there.
Radio is also in a unique position, for a number of behavioral reasons.
First, it already has such high penetration among U.S. households that conversion of a critical mass of receivers to digital — even with rapid uptake — will take a very long time.
Second, consumer satisfaction with radio, especially FM service, is quite high, so there is little motivation to upgrade.
Third, and somewhat contravening the first two points, many new radios are purchased today as part of something else (e.g., cars, clocks, MP3 players, cell phones, etc.), and not acquired as radio purchases per se.
Thus the conversion process for transition to digital receivers among consumers is necessarily slow and complex, and therefore difficult to predict with any degree of accuracy.
The best approach to take for ensuring an ultimately successful transition is to quickly include IBOC capabilities in as many new radios as possible, without significant price impact, such that digital receivers become the default design in home, car and portable devices. Thereafter, it’s a matter of waiting for the replacement cycles to run their course.
Even under a best-case scenario, this two-step process will take substantial time to complete. Again, this is as it’s always been for broadcast transitions, but the many variables involved this time could slow or speed its pace beyond the norm.
There’s more uniqueness here
Of course, there is one other critical element in this transition that is unusual, and it could also affect the ultimate outcome.
No other broadcast format transition has ever been driven so overtly by a single corporate entity. Certainly other companies were involved in the development of past transitions, and had a stake in their success or failure, but the technology involved in a broadcast transition has never been so closely held and exclusively managed by one company as it is for IBOC.
This is not necessarily a bad thing. The existence of a well-established company that is exclusively focused on the success of a format can help drive it to early success.
Indeed, the lack of such singular focus has been blamed for the slow pace or even the failure of previous (i.e., purely standards-driven) broadcast formats. Particularly in the United States, a proprietary steward can establish a new format quickly and decisively. In the absence of such an entity, promotion of the format has to be taken up by trade associations or an industry consortium, and/or is left to the often uncoordinated marketing of various interested manufacturers.
The existence of a single entity also simplifies the licensing of required intellectual property to manufacturers, and can provide well-orchestrated implementation support to such licensees. (In the standards-based case, a patent pool can provide the one-stop IP licensing, but it typically does not offer any implementation help.)
Moreover, the ongoing development of the format is enhanced greatly by the continuing existence of a single commercial developer. The relatively quick deployment of incremental improvements to the HD Radio format subsequent to its initial design (e.g., multicasting, surround sound, conditional access) already provides ample testimony to this.
It could be further argued that the double-barreled power of such commercial drive coupled with the FCC’s regulatory assent creates the perfect storm for digital radio’s rapid establishment here.
You knew there was a ‘but’ coming
On the other hand, the concentration of an entire broadcast industry’s transition in the hands of a single corporation brings unprecedented risk. If Ibiquity Digital were to fail as a company, the entire U.S. radio industry’s future could be threatened.
Such a dire outcome is unlikely, given that several large radio broadcasting companies are major investors in the firm. And even if the current corporate structure were to suffer reorganization, administration of the IP and other processes critical to the ongoing transition likely could be carried on by one or more other firms.
Nevertheless, as we acknowledge that, like other broadcast transitions, this one is taking its good sweet time, it remains the first one to run its course with a corporate clock ticking over its head.
Ironically, the unusual licensing structure of IBOC may also be slowing the transition because it has kept some (particularly the larger) consumer electronics manufacturers from adopting the format due to their lack of comfort with the unorthodox approach.
The impact of this licensing process on pricing also is an issue. As noted above, for digital radio to achieve the default status it needs to begin achieving wide-scale penetration, its incremental cost over analog radio components must approach zero.
Any such obstacles to rapid growth are particularly problematic because the transition needs to be seen as having consistent new wins in deployment, both on the broadcast and the CE sides. Any perceived slowing in momentum makes those on the sidelines stay put rather than jump in. So forecasts of slow growth can become self-fulfilling prophecies and add to the servo effect that could drag the transition down, perhaps even to a halt.
Clearly the current U.S. transition to digital radio possesses a unique structure that serves as a two-edged sword. Whether its forehand or backhand action wins the day remains to be seen.