John at DIYmedia has posted a good introduction to what is now being called HD-radio, otherwise known as digital radio, or IBOC (acronym for In-Band On Channel). For the low, low price of about $500 you too can buy a digital radio capable of recieving almost-sorta-kinda-near-CD-quality audio on the FM dial, that the NAB and RIAA are tyring to ensure you can’t record.
John is writing a two-semester paper on IBOC, which I know will be in-depth and probably the definitive research on the topic when he’s done.
On his Future of Radio blog, Harry Helms also has been keeping close tabs on the debacle of IBOC.
Because digital radio hasn’t yet been federally mandated like digital TV — the FCC approved its use but it’s optional for broadcasters– analog radios will continue to work for longer than analog TVs. But that doesn’t mean the radio industry won’t shoot itself in the foot by switching over to IBOC so it can try and squeeze a few more dimes out of radio by offering 2 channels per station rather than actually offering something we want to listen to.
I’m not sure what you mean by your last sentence. The goal of HD is to provide formats and services not currently available in the community on standard FM. The goal has been to make those formats available FOR FREE, not to “squeeze a few more dimes” out of anyone. Certainly at this point, no one is going to be making any money with HD radio.
The issue here in my view is one more of hardware than of software. Conventional radios today cannot receive HD Radio. Electronics manufacturers charge a steep price to buy HD radios, and so far only one car company offers it as an option. Why? Because these companies are being paid by satellite broadcasters to build satellite receivers, and HD is viewed as a competitor. These manufacturers are not going to make it easy for people to receive HD radio. It is in the manufacturers financial best interest for consumers to buy satellite radio, not HD. The people and the government should look into the exclusive manufacturing deals the satellite radio industry made with electronics manufacturers in order to determine if the public interest is being served.
What I mean by that last comment is that IBOC is a means for a station owner to add an addition channel that can be used to sell advertising. That, in essence, is turning one broadcast license into two, and therefore equivalent to “squeezing a few more dimes” out of that license.
No commercial radio operator in its right mind is going to offer completely ad-free programming on those second channels for too long. I suspect we will see ad free second channels for a little while, during the “honeymoon period” as broadcasters try to entice consumers to buy into HD radio. But I expect that to last about as long as a commercial-free music block on my local classic rock station.
Further, the whole assertion that commercial radio is “free” is specious, since it is funded by ad dollars. Ad dollars are like a tax on every product a consumer buys — the ad money spent by Coke, McDonalds and Wal-Mart has to come from somewhere. It’s just a hidden cost — but I suspect folks would feel differently about “free” radio if every product they bought were priced truthfully — Coke 2 liter $1.59 ($1.49 + .10 to pay for ad budget).
–Paul
I don’t think I said commercial radio is “free.” I said HD radio now is commercial free. Which is also the case for music channels at satellite. And it’s very possible that at some point commercials may be added to the more popular satellite music channels.
The “hidden cost” issue is an old one. The ad money the Coke spends on radio is lumped in with ad money spend on all other media, including the internet. Percentage wise, radio’s slice of Coke’s ad money is a lot smaller than ten cents.
Being old doesn’t make the “hidden cost” any less true. I don’t really know the exact amount of what radio’s share of Coke’s ad money is, but I don’t think the average consumer would really care, since they’re paying for all the ads anyway.
And I wouldn’t be surprised, either, if music channels on satellite started airing commercials. There used to be basic cable channels, like American Movie Classics and Bravo, that didn’t air commercials, and that strategy went the way of the dinosaurs.
On satellite my guess is that we’ll see the completely ad-free channels become premiums, kind of like HBO on cable. But that won’t happen until it reaches a certain penetration.
Let me be clear, I am no bigger fan of satellite radio than terrestrial. The difference, however, is that terrestrial radio doesn’t pay a dime for it’s license or bandwidth, and is supposed to have public service obligations, which are all but ignored these days. Any supposed public benefit from HD radio is a smokescreen to eke out more ad dollars, nothing more.
HD radio is not a gift to listeners and consumers, it’s a three-card monte game run by the NAB.
You’re getting off the original point, but I’ll follow you if you don’t mind.
New applications for terrestrial licenses must pay a spectrum fee. Public service obligations are still mandated, and companies keep files on their public service programming available for inspection. Anyone can ask to see these files, and I can tell you they take these obligations extremely seriously. However your definition of public service may not be the same as theirs or the FCC’s. The public is also welcome to challenge the licensee at renewal. I’d like to see people challenge XM.
The public benefit from HD radio is more formats. It’s not a “gift,” and it is a business, but if the net result is that I can hear what I want without paying a monthly fee, that’s good. Personally, I’m not a big fan of the consortium. I’d rather have competition than co-operation. But competition has led to as many as three stations in a market with the same format, which I feel is a waste of the spectrum. So the fact that the consortium has planned this thing is good for fans of fringe formats. By the way, I don’t think anyone at the NAB has any idea what HD radio is. So I doubt they’re running it. All they care about is getting their dues from their members.