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Bridge Ratings: Sweat the cell phone and don’t count on HD

Bridge Ratings has released updated tech trend information, and as usual there’s a lot to chew on.

First, you should keep in mind that this sample is drawn from several big markets only: Los Angeles, Portland OR, Dallas, Phoenix, New York, Boston, Washington DC, Miami-Ft. Lauderdale, and Denver. That doesn’t mean it’s wrong, it just means it’s not necessarily representative of everyone else.

Even with this limitation in mind, however, the results are fascinating.

As usual I don’t care in the least about projections that are more than five years out because the statisticians have five or ten chances to change those projections between now and then – and change them they will.

So consider the predictions for just the next few years:

Internet Radio:

We are estimating that at the conclusion of 2007, monthly Internet radio listening will reach 31% of the U.S. population jumping to 38% by the end of 2008. By 2010 38% of Internet radio listeners will spend time with a terrestrial radio simulcast.

Satellite Radio:

Response to satellite radio continues at a tepid pace and is cooling with each month’s analysis. After slowing first quarter growth further weakened by national news awareness of a pending merger, we now have reforecasted the full year gain for satellite radio to be closer to 3.4 million.

It is important to note that merger news tends to confuse the market and confused consumers don’t buy. So this weakening is partially an artifact of merger hype and will evaporate to some degree once the merger is consummated – or not.

These projections also assume “more of the same” from the satellite folks in terms of strategy.

Terrestrial Radio:

The study discussed Cume erosion and projects less such erosion than previously anticipated, but I don’t make much of this. I never would have expected much Cume erosion in the short term anyway, it’s Time Spent Listening that I’m worried about, but the study is mute on this (it’s tough to measure). That statistic, my friends, would not be pretty.

Cell Phones:

Cell phones are emerging as a legitimate entertainment device and due to its pervasiveness in American society pose the greatest threat to terrestrial radio and MP3 devices. As more and more specialized services become available, prices reduce and equipment ease-of-use improves, we see growth in this area exploding

Of course, mp3 devices and cell phones are already merging. So the powers-that-be on that front are quite aware of this symbiotic potential. And when you add the notion of WiFi music reception (streamed or cached) then you have a category which will be huge. Get ready.

HD Radio:

Of all the media we are covering in this latest study, HD Radio growth is the most disappointing based on previous industry expectations. Consumer awareness of HD radio continues to grow but consumer interest in owning or listening to HD Radio is slowing. Why isn’t HD radio catching on? The number one response from those who have “little or no interest at this time” was “Don’t see a need” followed by “Not aware of its benefits”. Bridge Ratings is reforecasting its HD Radio growth at this time. We expect no more than 500,000 users of HD radio by year-end 2007 and only just over 1 million by the start of 2009. These estimates are considerably reduced from our earlier expectations when a larger consumer base indicated interest.

In other words, Bridge says interest in HD radio is decreasing even as your station works hard to increase awareness.

What can I possibly add to this honest and bleak picture that I haven’t said before? My well-intended warnings about HD’s “premature death” seem to be rearing their ugly heads almost two years later. I take zero pleasure in being right about this because it all could have been prevented – and perhaps it still can be. Start by re-reading the 2005 article or for more discussion buy my book.

Anyway, Bridge sums up the study:

According to this updated data, the entire spectrum of digital audio alternatives, and especially Internet radio and and its wireless distribution continue to represent the biggest challenge to traditional radio. A rising component of trouble is cell phone activity among all age groups up to 60 years of age. New cell phone capabilities which will turn the mobile phone into a more dynamic part of daily life will potentially surpass Internet radio as the most significant challenger to terrestrial radio’s time-spent-listening. Based on what we know now, we do not see HD radio significantly boosting listening to terrestrial radio.
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