Google has finally arrived at the Internet Radio table although I must say the name of its service, “Google Play Music All Access” leaves something to be desired. Apple will most likely follow by the end of the year. There are still a lot of unknown details especially if any free ad-supported models will be forthcoming. One thing is for sure, there are only so many hours in a day to listen so most likely everyone’s share will decrease. This includes terrestrial radio. Terrestrial radio appears too busy trying to bail out the waning AM radio service and make non interactive HD radio work to attack IP audio. CBS was an early leader but their bets did not pay off. Clear Channel has now grown an impressive Internet radio service with over 30 Million registered users. However, we have gotten to the point where Clear Channel’s future interests may not fully align with the rest of the radio industry.
We just returned from the NAB last week and while there we attended the NAB’s day long session, Digital Strategies for Broadcasters. The panels were well prepared but sadly there were only 60 people in the room (92,414 attendees at NAB). One of the better panels covered the connected car. Panelists were from the Consumer Electronics Association, Connected Vehicle Trade Association and a consultant formerly with Lexus/Toyota/Scion. One slide I wanted to highlight came from Michael Bergman from CEA. This slide illustrates what is projected to occur through 2016 in the car. Note Internet radio growth with over 80% in-car penetration by 2016. Penetration is more than twice that of HD Radio. As I have posted previously HD radio lacks full two-way interactivity, a few extra channels with no compelling advantage in content and/or audio quality cannot compete with Internet radio. The Digital Strategies session opened with a chart showing current internet listening vs. terrestrial radio. Obviously an emphasis on today rather than the future…
Unfortunately HD Radio was dead on arrival. This topic is like the emperor with no clothes. Many in the industry are afraid to speak up and state the facts. While a good idea when originally contemplated, technology passed it by before it was able to be launched. I cannot see how it can compete with IP delivery. The hundreds of millions of dollars invested in HD radio have been wasted. If radio groups could have invested this in their digital platforms the industry would be much further ahead.
Below we summarize the comparative disadvantages of HD radio compared with Internet radio:
• HD radio relies on the consumer having purchased a device where IP radio delivery is available to all those that have an internet connected device (Ibiquity states that 3 million HD radio receivers have been sold compared to the 240 million broadband subscribers in the U.S.)
• HD radio is one way delivery while IP radio is interactive
• IP radio audience measurement represents actual listening as compared with sample audience data
• Quality of Internet radio stream can be superior depending on bit rate of streaming chosen by station
• HD radio format positioned for competition against other terrestrial stations in limited geographic area
• The term “HD” is highly confusing to the listener as they equate it more with television/video
• Internet radio listening can be mobile as hundreds of apps have been created for smart phones while HD radio must rely on dedicated portable radios
Let’s put resources where there is the greatest return.