From Radio Business Report:
[Clear Channel CFO Randall] Mays was…upbeat on HD Radio and multicasting, noting that it is a “chicken and egg” situation, so broadcasters have to put new formats on HD2 channels to build demand. Mays [said] that with its large number of stations, CC Radio can import a new format into a market for “virtually nothing.” He mentioned as one possibility putting a Country station on HD2 in New York. Rather that fragmenting current audiences, Mays said multicasting should increase the number of formats and attract more listeners to terrestrial radio.
With all due respect to Mr. Mays, these comments are strewn with dubious assumptions:
1. HD Radio is NOT a “chicken and egg” situation. This statement assumes that “if we build it they will come” as long as we plow programming into digital. The presence of programming does not necessariliy create the need to acquire and use digital radio. In fact, this statement presumes current radio is “broken” in the minds of listeners and there’s not much evidence that this is true. Meanwhile, folks who DO feel the medium is “broken” are solving that problem via Satellite or streaming or iPods and our strategic equation must factor in the competitive consequences of these radio alternatives.
2. Importing a new format to HD for “virtually nothing” doesn’t sound like the kind of strategy that creates listener value or interest. Instead it sounds like reshuffling the deck of musical cards to splinter formats in new ways – ways that will only lead to cannibalization and slim interest to slim slivers of music fans. If we’re not going to invest in programming the way we’ve invested in technology we will deserve to get a deaf ear from listeners.
3. “Rather that fragmenting current audiences, Mays said multicasting should increase the number of formats and attract more listeners to terrestrial radio” – this statement reflects a deep and fatal fear among broadcasters that anything we place on HD must not compete with the analog “mother ship.” Well, I’m here to tell you that cannibalization is inevitable. The example of a Country station in New York is a rare case of a major format missing from a major market. Meanwhile the insistence that only non-competitive flavors of programming be dumped on HD will condemn HD to permanent “niche” appeal status.
Also reflected here is the BIG assumption: That more choice is what listeners want and more choice will somehow keep listeners glued.
I’ve said it before and I’ll say it again: It’s BETTER choices listeners want, not MORE. If providing that on our EXISTING channels is a spotty proposition, then what are the odds we can expect better when we multiply our channels by three?