Convergence Conference: Radio's conundrum

Tony DeMars, Texas A&M: HD Radio and local market broadcasting

Recent studies in general show:
• People are paying attention to digital radio
• People are interested in listening to online radio in car
• Younger people less interested in radio – tend to focus on personal music devices
• Two-thirds of those questioned are aware of XM/Sirius. Of those, most have made their decision whether to adopt. So unsure how much more product growth is available there.
• Only about a third of audience aware of HD radio

Media plans and developments
• Automakers are putting Internet radio tuners in cars
• Home wi-fi radio "tuners" emerging
• With Wi-Max rolling out, more opportunity to use these tech tools.

How do local radio people feel:
• Rights fee concern
• HD radio not viewed as profitable (few listen)
• Wi-fi radio is a concern
• Emphasis becoming on unique local programming vs. Clear Channel cookie-cutter model
• Putting niche programming on HD channels
• No longer talking about using stations to introduce "new music" because your audience probably already has found it through iTunes,, etc.

Problems
• Incremental costs vs. declining revenues
• SoundExchange fee problem: example, one station would pay $771 for 100 listeners at a time
• But Internet buyers paying $5/CPM (the SoundExchange model combines number of listeners with gigabyte downloads for total fee)
• Quote from one: By pushing people to wi-fi radio, "We are promoting our own self-destruction."

It's encouraging broadcasters to air fewer songs per hour. If a handful of your listeners are online, that's OK. But if it's half their listeners per hour, they can't survive.