From Inside Radio:
U.S. Electronics is pushing the FCC to hold a summit among a number of parties citing a “newly emerged consensus” that a combined XM-Sirius be required to make their receiver technology “open” allowing more choices for consumers. U.S. Electronics attorney Kathleen Wallman says “Consumers deserve to have a choice about what devices they will use.” Among those backing the requirement are iBiquity and the HD Digital Radio Alliance as well as public interest groups such as the Media Access Project. Stifel Nicolaus analyst Blair Levin thinks it’s likely the FCC will require such a mandate as part of its approval of the deal, as well as a requirement that any new receivers include terrestrial HD capabilities.
Evidently you have a “consensus” when you call it a “consensus.”
Check out the unprinted part of the story here in Orbitcast:
The report citing Stifel’s assertions probably came from last week’s note, where HD Radio was listed among a list of several other possible concessions. Others possibilities that Levin included in his report were public interest programming, price freezes, and lower priced packages.
So it seems that the “consensus” isn’t nearly a consensus after all.
Here’s my consensus: I think it is unlikely that HD would ever be legislatively bundled with satellite radio in this way. And I also think it remains incredibly likely that the merger will be approved, albeit with a minor concession or two.
But let’s pretend, for the sake of argument, that I’m wrong and that the influential lobbying powers-that-be hold sway over good sense.
Let’s pretend that every new satellite radio has HD plus hundreds of satellite radio channels available, including tons of premium content at a wide variety of price points.
What do you think would happen?
Would this be the beginning of the HD radio era – or the end?
On the one hand it creates distribution. But distribution is not a guarantee of acceptance. Otherwise there would be a future for HD-DVD.
But on the other hand, what happens when HD radio goes head-to-head against satellite radio in the same units at Best Buy? And who benefits disproportionately – the brands with the big national names (XM and Sirius) or the local HD stations hidden beneath the existing stations and playing God only knows what?
So the choice of consumers will be between free and scattershot programming with little investment from broadcasters but plenty of commercials and premium satellite content, now cheaper (thanks to new price plans) and more diverse than ever, commercial-free.
Has our industry done the research that indicates where listeners will spend most of their time with these radios, satellite or HD?
I think not.
Will the radio industry inadvertently be legitimizing satellite by placing it side-by-side with HD versions of the terrestrial stations listeners know and love? Will the radio industry make it easier for listeners to tune in satellite once it shares the same hardware with newfangled “regular radio”?
You can bet on it.
That side-by-side is exactly what exists today in the OEM market, where the “FM” button sits beside the “SAT” one. And the anxiety caused by this is evident in the radio industry, which fails to understand that listeners are not choosing Satellite so much for its variety, but for its premium content and its commercial-free environment – two problems that HD radio fails to solve.
By bundling HD with satellite are we leveraging off satellite’s increasingly mammoth distribution – or are we feeding it?
Be careful what you wish for, HD radio.
You’re fighting for a concession the satellite folks might be thrilled to provide.
Think of it: One day every HD radio promo you’re running would be inadvertently pitching a satellite radio, too.
Every time an HD Radio rings, a Satellite Radio gets its wings.