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Evolution vs. Revolution

One of the difficulties the radio industry is going to have with the development of HD radio is this:

The nature of the industry itself.

Here’s how radio works:

You own the stations. Those stations have 100% distribution. Listening is free. The only challenge is getting a listener to sample you, then tailoring the station to their evolving tastes and marketing it accordingly.

If you have a problem, if you’ve made a mistake, you fix it or you change the format. Then, the next day, you start all over. You modify your strategy – your content – as necessary. If it doesn’t work, you start all over again.

Now contrast that with what’s involved in launching an entirely new audio technology such as HD radio:

You get the wheels turning and make some deals. Every deal, every decision, every investment is a fork in the road. Once you take one fork you never can go back to take the other one (for example, once you decide how the stations will array on the dial, that decision is done). And once you’ve taken four or five forks your path and destiny is set.

You’re dealing with hardware and software, not software (programming) alone. You lack distribution, listening is not free, sampling is difficult and dependent on the will of the consumer to buy the product. You don’t control manufacturing, you have very limited control of marketing. You generally don’t incur advertising expenses unless we’re talking about airtime, and you don’t invest money in the program unless that investment can be capitalized. You have a faint idea of the wants and needs of consumers and you’re learning more fast – unfortunately the more you learn the less you can use because many of the most important decisions you can make have already been made – right or wrong – they are the “forks” you can’t return to.

Maybe it’s hard for an industry which is so good at evolution to be the same one seeking revolution.

While evolution and revolution need each other, they are not the same. Confuse them at your peril.

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