Will Traditional Radio be Invited to the Wi-Fi Party?

As a proud owner of an iPhone I was thrilled to hear that Steve Jobs had cut the price of the 8 gig iPhone by $200 just in time for the upcoming holiday season. Boy, that makes me feel just great!

But wait....as radio broadcasters, we should we feel good or bad that Mr. Jobs didn't 'refresh' his new Fall iPods with FM radio receivers.

The radio industry shouldn't feel slighted that FM radio seems to be at the back of the line of applications that are waiting to be included in America's favorite audio toy. We need to be realistic; it's just never going to happen.

Why is this?

Bridge Ratings has conducted studies over the past two years on iPod and MP3 use and believe me when I say that very few users of these devices want a radio in them. It just is counter-intuitive. Focus groups have been asking why it would make sense to put a radio in an iPod.

Steve Jobs has seen the research too. He's not even contemplating adding a radio to his iPods. Because Mr. Jobs doesn't ever look back. He has the luxury of doing what radio management hasn't had the chance to do in over 7 years - look to the future.

Of more concern to traditional radio is the new iPod Touch which comes with Wi-Fi capability and a Safari browser - the best mobile device browser out there. It's on the iPhone and it makes surfing the Internet effortless.

And now a music-playing device has the ability to go to iTunes and download music direct to the player. How far away are we from a time when these same devices can surf over to an Internet radio website and in a Wi-Fi hot zone listen to Internet radio. Not very far.

Generally, the radio industry has done a decent job and has dedicated some resources to its Internet radio efforts. This has occurred in mostly large and some medium markets. The remaining markets/stations haven't taken the step because they are intimidated by the streaming/copyright expense issue and they really don't know how to do an effective job of delivering an Internet radio product.

But if you can feel that Wi-Fi enabled MP3 player train bearing down on you, you are not alone, traditional radio. It's coming and coming fast and as far as Internet radio is concerned, traditional radio's greatest weakness is the vast choice (thousands) of stations available on the Internet. Practically every taste is served. And soon it will be served in a small hand-held device.

Traditional radio's greatest strength is its brand and the current distribution system of blasting its programming across metropolises (is that a word) up and down our great land. Radio's bright leaders should take these Steve Jobs press conferences to heart because each time Jobs steps on that stage, radio's exclusivity and relevance shrinks.

If you have not instituted an Internet radio effort for your company or station, don't wait too much longer. The pervasiveness of portable devices that can bring the world of radio to a hand-held music player or mobile phone is on the horizon. In fact, some already do.

You want to be invited to that party.

How to Guarrantee HD Radio's Success

What's 2 years old and doesn't get any respect? HD radio.

Radio's theoretical saving grace is five years too late and by all the data we can see at Bridge Ratings, it will be a smaller consumer niche than satellite radio...if it continues down the path it is currently on.

And with the hundreds of thousands of dollars being spent by American radio companies to upgrade their existing equipment for HD capable broadcasts, there is a dire need for HD to be the technically next great thing for terrestrial radio. But how does this get done?

The answer lies in taking a look at the FCC's mandate for HDTV and applying it to radio.

The FCC notified U.S. television broadcasters that the standard for transmitting TV over-the-air would permanently change from analog to digital. While there are many technical, political, and economic reasons for and implications of this change, the end-result for the American TV audience is a dramatic improvement in picture and sound quality.

According to the original FCC rules, all full power stations were to convert to digital by the beginning of 2007, followed by shutdown of analog broadcasting. An escape clause stipulated that 85% of receivers in the service area must be "capable" of receiving digital signals before the shutdown could occur. At the time of analog shutoff, one of the channels (digital or analog) would then be returned to the government, with the other channel remaining as a digital station; the freed spectrum could then be used for other TV stations, with UHF channels at the high end of the band being decommissioned and sold for other uses.

The 2007 deadline could not be satisfied under many interpretations of 85% "capability" of digital signal reception. So....

On February 8th, 2006, President Bush signed into law the "Digital Television Transition and Public Safety Act of 2005". This law mandated a hard shut-off date of February 17, 2009 for the end of all analog (NTSC) TV transmissions in the U.S.

A similar hard shut-off date for the end of all analog FM radio must occur in order for HD radio to get past its current consumer growth doldrums. The forced shut-down of analog radio will give America the incentive to adopt HD radio.

Perhaps more importantly, like HDTV, a forced shut-off will force consumers to become more familiar with HD radio's offerings and benefits which will, in turn, motivate broadcasters to develop stimulating content.

This is really the only way to quickly stimulate the rapid adoption of this new technology. One wonders why this wasn't the FCC's plan all along. Why place a mandatory transition deadline on television stations and not radio?

Even our British broadcast neighbors are beginning to lobby their FCC equivalent (Ofcom, the Office of Communications) to turn off the FM band by 2015 in order to force British broadcasters to become digital. They have said they fear being antiquated in the face of all digital audio technologies.

They have a point.

What do you think?