HD Radio: Why Marketing Matters

I was impressed with the British Invasion in the 1960's. "Those Brits are real good", I thought to myself as the whole string of music successes starting with the Beatles came across the 'pond' to invade America.

Now, they're showing up America once again, but this time it's in the area of HD radio - or "Digital Radio" as they package it.

In a survey just released by Britain's ratings service RAJAR, more than 25% of the British population listen to digital radio, defined as Digital Audio Broadcasting, Digital Television and the Internet.

At first glance, this is rather impressive. However, when combining those three digital radio sources in the U.S., the percentage of the American populous that listens to some form of digital radio is closer to 50%:

• Internet radio - 60 million
• HD Radio - 500,000
• Digital TV - 90 million homes

What is intriguing is the marketing of digital radios (comparable to the U.S. HD concept).

Unlike the U.S. where broadcasters must market HD radio by themselves and with the help of the National Association of Broadcasters, the United Kingdom has a dedicated body: the Digital Radio Development Bureau.

It has become clear in our studies at Bridge Ratings that there is considerable consumer confusion in the U.S. about HD radio and its benefits. Three quarters of the U.S. population has heard of "HD Radio". Less than 5% really want it.

So, the Brits and their Digital Radio Development Bureau are taking the U.S. broadcasters to school about digital radio. Here are some of the ways Digital Radio is marketed in the UK:

• More Choice - "Because of the way it transmits a signal, DAB Digital Radio can double the number of radio stations you can get on FM. Many cities will pick up around 40 stations, and in London you can receive more than 50!

There are national, local and regional stations on DAB Digital Radio, and more than 85% of the population is covered by the DAB signal.

It's not just more of the same... there are new, unique stations on DAB with programmes designed for different segments of the population. So, rather than trying to be all things to all people, DAB means you can have stations dedicated entirely to dance, hip-hop, garage, rock, jazz, big band, country, pop, soul and disco. Or your can get stations specifically for young children, the mature listener, ethnic communities, news junkies, sports fans, lovers of the spoken word, world music and environmentalists, gays, classical buffs, ...in other words, something for everyone."

• No Interference - "DAB Digital Radio means interference free listening in digital quality sound. There's no hiss, crackle, or pop, no fading, no overlap, just great radio all the time. We've surveyed thousands of DAB owners and nearly 90% reckon DAB sounds great."

• Ease of Use - "Quick, what's the frequency of your favourite FM radio station? You'd be surprised how many people know the name, and kind of, sort of where it is on the dial, but waste time searching around for it. Some people are even afraid to change stations because they worry they'll never get back to their favourite. Others mark the dial with a pen, or sticky tape so they'll always be able to find their way home... a bit like a trail of breadcrumbs.
  
  With a DAB Digital Radio there are no frequencies. Just choose the station you want by name from the text display screen. It's easy every time and you don't need to worry about getting lost."

• Control Time - "With some DAB Digital Radios let you pause and rewind live radio. And with some of the latest models, you can record radio to a memory card. For the first time this puts you in control of when you listen to the radio. You can stop time, go back in time, or set a timer to record a future programme."

• No Re-tuning - "National DAB Digital Radio stations, both commercial and BBC, are broadcast on the same frequency across the country, so you never need to retune when you're on the move."

Does all this sound vaguely familiar to you? It should because it is almost exactly the Satellite Radio model. In the UK, though, the contemporary evolution of radio is focused on Digital Audio Broadcasting (DAB) services, such as HD Radio rather than satellite radio.

Much has been said of American radio's indecisiveness when it came to moving into the 21st century with HD/Digital Radio. It took so long, Satellite Radio took the position right away from U.S. Broadcasters. And now the fight to insert HD radio into the lives of Americans has become an offer of another product where there already is one.

Yet, marketing may solve this problem - but it also may be too late.

In our society we thrive on choice - too much choice - and the successful products that have identical competitors are the ones that market and position themselves most skillfully. Has anyone read Ries & Trout's The 22 Immutable Laws of Marketing"?

Oh, and one more thing. Digital radios in the UK start at about $58 (29 pounds).

So, while the UK has managed to effectively launch Digital Radio, U.S. Broadcasters - who should know better - are fighting a positioning battle which, frankly, is over.

HD Radio in the U.S. is a niche market out sized by Internet Radio and Digital TV music services. And portable digital radio will be real with the arrival in the near future of wide-area-wireless Internet or Wi-Max.

This lesson has been difficult to learn - but it is time to face the facts.

The Last Brand Standing

Choice is a good thing, right? Not so fast.

Having choice has its place, but the staggering array of consumer goods from which we must choose overwhelms the average consumer, and in a 2005 book psychology professor Barry Schwartz argues that that's not such a good thing.

In the book "The Paradox of Choice", Schwartz tells us that constantly being asked to make choices, even about the simplest things, forces us to "invest time, energy, and no small amount of self-doubt, and dread." There comes a point, he contends, at which choice becomes debilitating rather than liberating. Did I make the right choice? Can I ever make the right choice?

It would be easy to write off this book as merely an extended riff on that well-worn phrase "too much of a good thing," but that would be a mistake.

Part of the professor's point in the book is that rules and constraints in society help us make decisions and this is a good thing and should be embraced.

The book's concepts are easily applied to media consumption as well. Because of the growing number of choices we are presented with, consumers of media don't always have the time to look at all the information out there to make the best choice or to even consider all of the options. People expect certain decisions to be made for them.

The term "decision stress" has also been tossed around by marketers over the years and Professor Schwartz's concepts hinge on similar rationale that when faced with too many choices a consumer will often "short-circuit" with too much information overload and tend to decide on what to purchase or read or listen to using the easiest method.

In most cases brand is the balm that soothes decision stress.

And it is for this reason that those of us running media companies in 2007 should consider just how powerful our brand is - or should be.

In our recent studies of media consumption - especially in the Internet radio space - Bridge Ratings has discovered that with tens of thousands of Internet radio options, most average consumers of Internet radio will gravitate to a brand they are familiar with. In many cases they do this to reduce or eliminate the "decision stress".

We have seen new consumers interested in Internet radio go directly to AOL.com for their Internet radio experience without much thought about what else is out there. Why? It's a brand they know and it makes the process of deciding easier.

This process of "going to the brand" is more prevalent in media than in other consumer products and services. Why? Because in most cases, media is simply a utility, something that doesn't hold significant importance to our lives and like the light switch on the wall, we as consumers of media tend to "throw the switch" on whatever media we are consuming without much thought.

Of course, this is a generalized perspective. There are passionate consumers of media that give great thought to what they watch or listen to, but generally, we have found that the average consumer has too many decisions they need to make each day and any time the decision process can be eliminated or reduced, most consumers will take that road.

Certainly, deciding on which radio station to listen to doesn't hold the significance in consumers' lives that selection of which doctor should be seen or which food product will enrich health, and therein lies the most key of all of the factors leading to "decision stress". The hierarchy.

To make the process of decision easier, consumers have an internal mental product ladder upon which they have placed their favorite brands.

They go to a store looking for a product and, in most cases, when faced with too much choice, a consumer makes the easy choice - almost without thought - and goes for the brand they know.

If brand building has not been a part of your business strategy, it is time to invest time, energy and yes, even financial resources, into building, maintaining, supporting and/or strengthening your brand.

Because media consumption isn't getting any easier for the consumer. Whether you run a radio station, and Internet radio business or produce content for other digital and mobile media, your brand will be they key to unlocking consumer use and recall.

The easier you make it for the consumer to make that choice, the more likely they'll choose you.

The Radio Airplay Debate

Since Bridge Ratings was one of the first to expose the truth about how radio airplay affects music sales, I think it only appropriate that I weigh in on this latest controversy that is brewing.

Seems the music industry has forgotten the "partnership years" when radio and records virtually changed the way music was consumed. Performers and labels alike believe radio has a one-side relationship with the music industry.

Programming radio stations was one of the favorite aspects of my career and a large part of those years was spent in the company of some of the record industry's best, most creative people. Most of the time those people where record company promotion people, whom I loved working with.

Many of the relationships I had with these people turned out to be much more than the typical program director/record label promo people relationship where they would come by the radio station on Tuesday's and wait outside my office until it was their turn to "pitch" their latest and greatest artists or albums.

Many of these people became good friends and I had the chance to learn just how hard they worked and how difficult their jobs were.

But in the seventies and eighties, radio and records worked as a team of sorts. The record promotion people would provide data or insight as to the record's benefits. Remember, this was before the Internet so airplay data was difficult to come by - part of record promo people's gigs was to enlighten, and the program directors and music directors of the industry would assimilate that information and determine whether songs and albums were worthy of airplay.

One music was added to radio playlists the relationship didn't end there. There were concert promotions, music store promotions and artist interviews, the two industries were connected at the hip in an effort to give momentum to careers of worthy performers. Sure it helped sell records, but the radio industry benefited just as well.

The world seems to have changed since then and now it's coming back to bite the radio industry in the butt. Those that represent the music industry - both corporate and performers alike - feel it is time that radio's "free ride" is over. They want their money.

See, radio pays licensing fees to ASCAP, BMI and SESAC based on the station's revenues. The better a radio station's revenue, the more fees that station pays. It has always been a common belief that radio stations that rely on music for their ratings should pay music publishing houses for the right to use the music that drove revenues for the stations. Fair enough.

Now, the performers - who have not been receiving any special licensing or royalty from radio - want to pluck from the "money tree" they think radio is. It is, they claim, time for the performers of songs to benefit from the years of airplay.

Radio's argument is that the two industries have worked in tandem to benefit the music industry. Radio has - and continues to be - a wonderful promotional vehicle for artists who write and perform music no matter the genre.

In 2005 Bridge Ratings conducted a study to determine the influence radio airplay, Internet airplay and MP3 plays have on the consumer. Due to this current controversy, we just completed an update on this study.

Here are a few facts:

*88% of radio's total audience listens to music radio at least once a week

*50% of these listeners consider music radio to be their primary radio experience.

*Nearly 90% of these "music primaries" agree with the phrase: "I have purchased music I have heard on the radio."

*32% of these radio consumers have purchased music through brick and mortar stores or on-line in the last 30 days.

Does this sound like the radio's relationship with the music industry's artists and performers is one-sided? No.

Perhaps the more appropriate step is for the music labels to offer all performers new or updated agreements in order to include them in the cash flow from music sales.

Radio influences music purchase. There is no doubt in my mind.