Major Themes Regarding the New Age of Radio

Since radio’s advent in the late 1800s, radio technology has undergone a number of significant changes, and it is currently in the midst of a major one today. The major themes that mark the new age of radio are the new formats that are available, the major companies that have embraced them, the convergence of technology and the transition to on demand content. The new major formats available in the new age of radio are satellite radio and HD. Satellite radio covers a much larger range than traditional terrestrial radio signals. Satellite radio can be picked up throughout the entire country, which is one of its primary advantages. Hundreds of available channels also make it an attractive choice. HD radio is a frequency that entails compressed digital and audio signals simultaneously, which produced an MP3-quality signal. These two signals can be sent using HD without changing frequency bands. Many companies have tried to embrace these two technologies, however very few have actually succeeded in doing so.

The two major companies who emerged in the Satellite radio market are XM Satellite Radio and Sirius Satellite Radio. These two companies have been each other’s chief rivals for a number of years, however it is highly likely that those days will soon be over. This year, the two satellite giants accounted that they would attempt a merger. This merger has not yet been approved, and may not be at all. If the merger were approved, it would prove to be highly beneficial to both companies because it would eliminate both of their main competitors and allow them to pool their resources in terms of channels and content. The merger would mean big changes for the radio industry in that satellite radio would finally be able to compete with traditional radio, which is vastly more popular than satellite.

This is the exact reason as to why the U.S. government (The Federal Communications Commission) might allow the merger. Normally, if the only two major players in an industry tried to merge, U.S. antitrust laws would ban it in order to restrict a monopoly. The radio industry situation with satellite radio, however is quite different, because satellite radio isn’t the overall industry they are involved in- its radio. To compete with all the other forms of radio, the satellite radio companies will almost have to merge. Some analysts even think both companies will go under if the merger does not go through.

The convergence of technology that marks the new age of radio simply refers to the various devices and electronics equipment that is incorporating a large amount of radio technology. Some of the devices and platforms that I have blogged about this semester regarding this trend are multiple brands of cell phones, iPods, automobiles and the technology that lies within them. Many cell phones have began embedding music features within their devices. Now an industry norm, phones have been competing with one another for who can store the most songs, how they can buy them, and if they have radio capabilities. Motorola has implanted XM Satellite Radio service into select phones, and Sirius even has its own portable music player. Some examples of satellite technology integration with automobiles is the Ford SYNC, which features a highly developed music player and a voice activated play-system.

I’ve also learned that automobiles will always have a significant impact on the radio industry because that is often where it is listened to the most. The automobile industry also sparks new radio formats because if the auto manufacterurs choose to incorporate the technology in ther cars themore popular the formats will become. Satellite and HD radio finally started getting some boosts in popularity and awareness only after auto brand like BMW and Ford began incorporating them.
As for the theme of on demand content, basically all forms of media are in one way or another are making content availible exactly when the consumer wants it. HD radio's tagging feature allows users to purchase a song whenever it comes on the station, music sites like pandora offer free customizeable radio, wifi enables internet radio wheverver it is available and national chains like Starbucks are now offering Starbucks radio- which allows you to purchase whatever song is playing in the store with one click of a button in iTunes.

New developments in radio will most likely not have a significant effect on my career, simplay because I do not plan to go into the radio business. I suppose if I go into advertising, it will have a minor effect on my career because the advertising landscape within the media will be altered substantially. At any rate, the not so distant future of radio will be vastly different form the one we know today, just as what it is today is vastly different from what it was ten years ago. With all these changes and constant innovations in mind, radio certainly becomes one of the most interesting mediums to keep an eye on.

Podcasts by XM Satellite Radio

At first glance, this seems like a fairly confusing development- XM Satellite Radio is now podcasting some of their content over iTunes podcast library, for free. Eric Logan, XM's VP of Programming justifies the move by saying "By making these original XM series available through xmradio.com, iTunes and other popular podcast web sites, millions more consumers have an opportunity to sample some of the best in premium music, news and sports programming that you can only get as an XM subscriber." This is the basic concept behind samples, just implemented in a new way in the new age of radio. By exposing consumers to a few snippets of their content, they will know what to expect if they actually purchased the service.
Orbitcast adds "It's an interesting move because the traditionally the "satellite radio" moniker went hand-in-hand with "payment" - a majority of the content is meant to be hidden behind the walled garden. Of course, XM has been going against the grain with this concept, what with Bob Edwards and Opie & Anthony being made available on free terrestrial radio.....But XM is leveraging what many believe to be one of its strongest assets: their original programming." By allowing people to get a feel for the original content that XM offers, they can understand that XM Satellite Radio is not just spitting out other broadcasts, but delivering its own content for listener enjoyment.

Source: www.hear2.com

BCS: Only on XM

One of the most important programming formats offered by satellite radio services are the sports coverage channels. These channels draw a huge audience because the satellite radio service grants access to braodcasts all over the country. Therefore if you lived in Upstate New York, and happened to be a fan of the L. A. Dodgers, you could tune in to the local radio feed live from California. This is a must have for any dedicated sports fan. Contracts with the Indy 500 and the NHL give XM an advantage over its competitors.




XM has recently added to its arsenal of exclusive sporting events by acquiring the rights to all five Bowl Championship Series football games in January of 08. XM Satellite Radio will be the exclusive satellite broadcaster for the following bowl games:

- The AllState Sugar Bowl
- Tostitos Fiesta Bowl
- FedEx Orange Bowl
- The Rose Bowl Presented by Citi
- The AllState BCS NAtional Championship

This coverage comes as a wrap up of its contract as this year's official satellite radio network for the half a dozen BCS collegiate conferences. All of these Bowl Games will be offered to XM's 8.5 million nationwide subscribers. Erik Logan, XM's Executive VP, reports that more than 1.3 million listeners tune in on a regular basis for Saturday college football games.
To add to the appeal of the package, XM also added Hall of Famer Barry Switzer as its head broadcast analyst.



Source: http://www.mediabuyerplanner.com/2007/12/04/xm-exclusively-airs-bcs-games-in-january/?camp=rssfeed&src=mbp&type=textlink

Sirius Stiletto 2 & 2 Domino Ads

Sirius recently unveiled its "Stiletto 2," the second generation of the company's portable satellite radio, which features WiFi connectivity and storage of 100 hours of Sirius programming. The second edition has slimmed down a considerable 25% from the original- which makes it lighter and more aesthetically pleasing. The satellite signal can be picked up by the device when outdoors, but when inside the user will have to connect to available WiFi networks to listen to Sirius content. The device has built in flash memory, and can store non-Sirius MP3s or WMAs. When listening to the Sirius broadcast, users can bookmark the songs they are listening to for a purchase later on. The Donor Advertising Agency, Sirius' agency on record has come up with the following advertisement that features the new gadget.



Interestingly, the spot does not technically advertise the device. The name of the music player is not mentioned, nor does it mention its features or what it can actually do. Apparently the ad was primarily designed to promote Sirius instead of the music player- but if so, why make it the climactic ending of the ad. It doesn't seem to add up.

Did the Sirius ad remind you of any other recent TV ads? Check out this one for Verizon.



I mean it's one thing for two ads to use the same concept to promote a product, but these two ads came out so close in time to one another that I wonder if there's a connection. I've seen these two ads played within in the same hour of television.
At any rate, if Sirius wants to promote this device, they definitely need to rework the advertising- otherwise, their sales will fall like dominos.

Source: http://www.infosyncworld.com/news/n/8189.html

Update: XM/Sirius Merger

The proposed merger between satelite radio giants Sirius and XM is still under review, but may be nearing a ruling from the Federal Communications Commision. One main facet of the proposal is whether or not the merger would create a monopoly, which antitrust laws deem illegal. Given that Sirius and XM are two of only a handful of satellite radio providers, it would seem as though the merger would create complete dominance in the industry. On the other side of the coin, satellite radio in its entirety may not be considered its own industry, but rather one relatively small portion of the radio industry as a whole. Satellite radio does in fact make up a very small portion of the whole radio market, and both companies are currently losing money. If the merger does not go through, both companies have stated that they will survive on their own and continue conducting business as usual. The Radio Business Report (RBR) makes their opinion known by saying "We'd strongly argue that the services are unique, and since their continued survival as competitors is not an issue there is no reason to grant a government-sanctioned monopoly."

After analyzing a combination between XM and Sirius, one would conclude that the sheer amount of different channels would surely dessimate the competition due to the mega-companies seemingly endless amount of content. Mark Ramsey argues that the number of channels availible on a radio service has nothing to do with its power. He states, "The issue has nothing - nothing - to do with how many channels you have. This is an old school understanding of a new media world."
No matter who weighs in on this situation, the only opinion that really matters is that of the Federal Communications Commision. They will most likely see the situation differently from the Radio Business Report and allow the merger to proceed, to the delight of both XM and Sirius. If merged, the two would be able to pool their resources and offer aggregated content, as well as eliminate their main competitors, which is a win-win situation in any business environment. Mark Ramsey believes that the merger will be approved. In fact, he adds that the merger won't have as big as an efect as most people think.

Sources:
http://www.hear2.com/
http://en.wikipedia.org/wiki/Satellite_radio

RIAA vs. Downloaders

Ever since the age of peer-to-peer file sharing programs began (i.e. Napster), there has been an ongoing conflict between illegal downloaders and the regulatory organizations who try to impede them. Over the years the Recording Industry Association of America (RIAA) has been relentless in their persuit to seek out offenders- investigating businesses and universities across the country and handing out lawsuit after lawsuit. The battle over downloading undoubtedly has an effect on the radio industry. The more people are able to download free music, the less likely they are to subscribe to a radio service like Sirius, XM, or HD.
The RIAA targets offenders by putting surveillance on peer-to-peer (P2P) downloading software, and monitoring the use by various users. Once a user is targeted, using their username as an identifier, the RIAA's technicians can track them to their computer using their IP address. The IP address is a unique address that computers use in order to identify and communicate with each other on a computer network. To initialize the battle with downloading at the workplace, the RIAA sends letters to the upper management of the company. The letters outlines the possible fines they could face, as well as a list of the ways they can help prevent illegal downloading at the workplace. A CD is also included, which contains a logged list of material, dates, times, IP addresses and users in question of copyright violation. The letter says "In short, your computer network and resources are being used to illegally distribute copyrighted music on the Internet. We strongly urge you to take immediate steps to prevent the continued infringement of our members' sound recordings on your corporate network." University campuses are also a hotspot for RIAA investiagation. Countless students across America have incurred lawsuits from the RIAA involving illegal downloading and copyright infringement. Many of these lawsuits can reach tens of thousand or even hundreds of thousands of dollars. This has gone on for years, but now some states are starting to speak out on the issue.

The Attorney General of Oregon State has now blocked many attempts by the RIAA to spy on university students. The state and University refuse to cooperate, saying "We do not think the university can be compelled to produce investigative work for the recording industry." This has been one of two huge blows to the RIAA in recent weeks. The other involves EMI's announcement that it will begin scaling back its funding of groups like the RIAA.

Sources:
www.afterdawn.com/ news/archive/3893.cfm
http://www.vnunet.com/vnunet/news/2204762/state-oregon-blocks-riaa-spying

New Trends in Radio Advertising

We should also take time to examine how radio is changing in terms of its advertising content. Although it is hard to pin down the all the strategies of the countless brands advertising on the radio, there are some overlying trends that are worth taking a loot at. One recent element of advertising that seems to be falling in popularity, according to Brandweek, is the use of taglines, or slogans- especially during the upcoming holiday season. “It used to be on the list of deliverables,” said Mike Wolfsohn, vp/executive creative director at Ignited, Los Angeles. “It was mandatory.” Now-a-days we are seeing more and more companies abondoning heavy use of taglines, if they use one at all. Starbucks, Samsung and Converse all lack taglines, while Pizza Hut and M&Ms make use of them only very rarely.



But why? The tagline seems to be a crucial staple to advertisements in order to create consistent brand messages and to boast the brand's main focus or philosophy. The fact is, many companies seem to be using taglines incorrectly, according to Brandweek, and can often detract from the effectivement of an advertisement. Taglines can be seen as safety nets for fears that the rest of the ad campaign isnt communicating. Taglines that are vague and watered down in order to be catchy or different often lose their meaning and mitigate the ad's message. Experts are not saying everybody should stop using taglines, but that a company should only use them if it is in a way that is strong and meaningful.

How do you get a slogan to stick? Landor & Associates’ managing director Allen Adamson says " It’s not just coming up with five catchy words. It has to be the right promise, with the brand living up to it, expressed in a sticky, unexpected way, and then you have to spend money and stay with it for the long haul.” The message you are trying to get across should be woven through all communications made by the company, and it should be in the very essence of the brand itselff.

Sources:
http://www.brandweek.com/bw/news/recent_display.jsp?vnu_content_id=1003677226
http://www.hear2.com

Radio on the iPod?

Apple's iPods have been incurring technological advance with every new generation of the device. This entails the addition of new features such as video capability, photo storage, touch screens and internet access. Many are speculating as to whether or not these devices will add a radio feature. It seems as though Apple would have the capability of implementing a radio frequency reciever. However, when an Apple representative was questioned about this, it became apparent that Steve Jobs and his company have no intention of such a thing. He said that Apple had no immediate plans for a 'radio-type' function on its players because "Steve considers traditional radio to be a an old technology and he doesn't want to 'taint' his cutting edge technology. On the other hand, the iPod's internet access can now facilitate audio streaming, which is perfect for internet radio stations like Pandora. This could mean that internet radio stations could becomne increasingly popular amongst the public due to the vast popularity of iPods. If people wanted to hear something other than what they had stored in their devices, they could easily go to pandora.com or anothe rinternet radio site and stream this audio. Companies like TVersity (www.tversity.com) have devoted their websites to portable device streaming.

At this website, you can stream not only audio, but also video content. Heres how it works. How it works

1. Add your home and Internet media to TVersity
2. Organize it, tag it and create playlists
3. Access it from your TV and other devices

Social (Music) Networking

As mentioned in the previous post, Last.fm is an Internet radio website as well as a social networking site. This post will embellish on the recent trends of social networking aspect of online music. There are many social music sites that allow you to upload songs, listen to your music, share it with your friends and compare playlists. Some of the more notable websites are Last.fm, Ezmo.com (which was made available to the U.S. market just recently), uPlayMe and iLike.





Here is a detailed list of the various things you can do on these music sites.

Upload: Upload songs individually - to import your entire iTunes, Windows Media Player or Winamp library.
Listen: Listen to the music via an online music player - log in to your account from any computer and listen to your music using a cool and user-friendly interface.
Share: Invite friends to share your music - friends can then stream your entire music library on any computer.
Playlists: Share iTunes playlists with friends.
New Music: Get music picks and free MP3s to match your tastes.
Concerts: Get notified when your favorite artists are playing near you.

The socail networking craze, marked by the new wave of Web 2.0, is cleary affecting the internet music industry. Users now have a new reason to explore new music- comparing and communicating with their friends, peers, and even strangers online. People no longer have to look to the big broadcast networks for content. They can get recommendations and playlists from online communities easier than ever before. This type of radio and music sharing will most likely be deleterious to the popularity of traditional music formats, and even more advanced formats like HD and satellite. The radio industry undoubtedly entails a wide range of competitors, which offer different advantages and different advantages. Each segment/format of the industry must work to find these advantages and exploit them in the best way possible.

Sources: http://home.businesswire.com/portal/site/google/index.jsp?ndmViewId=news_view&newsId=20071024005801&newsLang=en
www.ezmo.com
www.ilike.com
www.uplayme.com

Radio Personalization

One of the trends that will shape the future of radio is personalization. As we have already seen in Pandora's internet radio strategy, consumers find value in being able to program their own radio stations- in terms of what types of artists and genres they want to hear. Larger broadcasting companies are beginning to realize this, and are taking steps towards integrating the concept.

Recently CBS broadcasting aqcuired Last.fm, which is an internet radio and social music networking site. CBS is trying to expand its online radio offerings, which they did for a sizeable price of $280 million. According to Mark Ramsey, CBS is going to incorporate Last.fm into their own radio stations to offer customized versions of their mothership. He says that "You'll see Last.fm integrated in all of CBS's radio websites which, for the first time, will enable customized versions of the analog stations you love - and whatever else your heart desires."


With all these consumer-tailored stations flooding the airwaves, more traditional "variety" stations will dwindle in value. Radio listeners will have their handful of personalized stations, and that will be all they listen to. People will no longer need hundreds of stations (which is bad news for satellite and HD radio). When this type of radio emerges, what we thought was "new radio" may become "old radio." However we don't know for sure when this will happen and to what degree. Still it will be interesting to see how it progresses.

Sources: http://www.hear2.com/2007/10/recently-apples.html
http://gigaom.com/2007/06/01/lastfm-cbs-280-million-hedge-for-its-radio-biz/

Cadillac & XM

Ford and BMW are not the only auto companies embracing new radio technology- Cadillac has recently become heavily involved with XM Satellite. Not only have they implemented XM radio as standard in their vehicles, but Cadillac has also united with the satellite radio giant to unleash a new advertisement promoting XM's "Theme Time Radio Hour." The ad features Bod Dylan, one of XM radio's celebrity djs, driving a Cadillac Escalade down a desert road. The tv ad is the first of a variety of media that will be used in this cross-promotion. An integrated marketing effort is in effect for coming months, which will also involve online and print media. Here is the 2 minute version of the new co-advertisement between Cadillac and XM Satellite Radio- featuring Bob Dylan.



In related developments, General Motors has announced that XM Satellite radio will now become standard on 2008 Hummer, Saab, and Buick models. It appears as though GM is leading the way in satellite radio integration. Six million XM-equipped vehicles have been built by the General since 2001, and there are currently fifty GM products with standard XM radio. Perhaps more innovative implementations such as these will improve the brand family's image.



Sources:
http://www.xmradio.com/dylan-cadillac/index.xmc
http://www.autoblog.com/2007/10/21/xm-for-all-satellite-radio-service-now-standard-on-2008-hummer/

Sound Data?

The information we get from Arbitron regarding internet and satellite radio may be unreliable. Arbitron's radio diaries, that they use to gather data regarding consumer listening habits, was designed for more traditional radio formats. With this in mind, it would make sense that the design and wording of the survey may throw off those who listen to new radio formats. Marc Ramsey's blog embellishes on a number of factors that may skew the diary data. Here is a visual of the Arbitron survey that shows how satellite and internet radio data may be misrepresented.



First of all, the wording of the three main columns include "time," "station," and "place" can exclude satellite and internet radio. If they had used terms like channel or URL, it might be more inclusive. This is also a problem in the station section, where it states "Write the call letters, dial setting, or station name." Again, the terms channel or URL shuold be added as to not limit what the user is listening to. At the top line of the survey, it tells the respondent that "When you hear a radio, write down..." This doesn't specify what type of radio it may be (terrestrial, satellite) and doesn't include internet streaming as a possible option. Under the "station" section, there is no box to check satellite. There isn't a box for internet either. Why wouldn't Arbitron want data from these new radio formats? It only lets you select AM or FM frequencies. It is completely limiting the respondent's ability to tell the true story- as reflected in the diaries. There are countless people who are listening to these new radio formats that are not wholly accounted for in their radio data.

Cells That Stream

Considering the various technologies surrounding internet radio, satellite radio, and WiFi, it could not have been hard to predict the emergance of streaming Internet radio on cell phones. This feature is becoming more prominent amongst the increasingly tech-savvy public. Companies such as mSpot have become pioneers for this technology, and have partnered with mobile phone giants like Sprint to provide their services to people all over the country. Also teaming up with the radio technology collective is the popular online music service Pandora Media (see earlier post). The alliance allows users to access their onloine Pandora stations wirelessly from their cell phones, where ever they are. Now their personalized radio stations are portable, and can be listened to anywhere. Just link on the website, the cell phone screen displays song information such as the current song title, artist, genre, why it has been played, and even album artwork.



Pandora is now available on the whole Sprint Power Vision procuct line. The service is advertisement free, and costs $2.99 per month after the 30 day free trial they are currently offering. Another take on the radio-capable cell phone is the MUZIQ, compliments of Sprint and LG Electronics. The phone allows for over the air song downloads, a memory card that can hold 4 gigs of music, and an FM radio receiver that allows customers to listen to their favorite radio stations if they are within ten feet of an FM radio transmitter.



Sources:
http://www.mobiledia.com/news/59468.html
http://www.cellphonedigest.net/news/sprint_nextel/index.php?page=2

Ford SYNC (Feat. Microsoft)

In an earlier post, I mentioned Ford Motor Company's advances regarding their addition of HD radio receivers to their automobiles. Apparently their newfound focus on innovative audio didn't stop there. Now they have introduced the "Ford SYNC" hand-free audio feature. The SYNC is the spawn of a partnership between Ford and Microsoft, and untilizes bluetooth technology to fascilitate wireless phone-to-car console connectivity. Basically the feature allows you to hear audio from your car speakers that is playing from mobile phones and digital music players. There are also add-ons which enhance the experience, such as the voice activated control system. A driver can change his audio sources easily just by enabling the voice-recognition program and verbally selecting his audio. These voice commands can also access a genre, artist or even a song title. On top of this, the phones and mobile devices can also send other data such as address book entries (names, phone numbers, emails, etc.) to the vehicle to be viewed on the main screen. The new feature supports many popular digital media players such as the iPod, the Microsoft Zune, and PlayForSure players. Portable USB storage devices may also be used.


The main thing to understand about this feature, and why it is such a breakthrough, is that it is not just a device, but new software that can be built upon. The program can be adapted and updated for nbew devices when they come out. The interface in the vehicles is a program that sends data and facilitaes audio play seamlessy. In the future this will most likely be standard for automobiles. There's no telling what additional features could be added to this software in the future. The SYNC will be available in a dozen Ford, Mercury and Lincoln products beginning in January. Here is a video that gives a visual overview on the SYNC.



Sources:
http://www.orbitcast.com/archives/internet-radio-in-your-car.html
http://media.ford.com/newsroom/release_display.cfm?release=25168

Online Radio & Free (Legal) Music

One major competitor to terrestrail, satellite and HD radio formats is online radio. Countless online radio stations can be accessed for free using audio software such as iTunes, or web sites like Pandora. Purchasing an HD radio receiver loses some appeal when you could just plug in your computer and hear endless online radio, free of cost. Additional upsides to online radio are the innovative formats that are taking hold. Pandora, for example, allows users to input their favorite genres, artists, or individual songs into the programming options, and the website will automatically match the selected items to other similar songs.


This, in effect, allows you to create your own customized radio stations with music that shares common themes with your favortite artists. Additionally, as you listen to each songs it selects, you can tell Pandora to either play more songs that are similar to it, or to play less. This keeps the customization process going throughout your listening experience. This radio service is free becasue the website earns revenue from advertising. The concept of free music is one that many predict will play a large role in the future of music. With falling cd sales, and the constant threat of illegal downloads and file sharing, some have pondered offering free albums, which would ultimately result in higher artist popularity.

This would in turn be reflected in sales via merchandise, tours, etc. This week, world famous alternative band Radiohead announced it would be offering its latest album for whatever consumers wanted to pay for it. The amount charged to your credit card is completely up to you, which includes for free of course. In this LA Times article, Radiohead is being praised as a trend setter in the industry. "This is all anybody is talking about in the music industry today," said Bertis Downs, the longtime manager of R.E.M., the veteran alt-rock band that was inducted into the Rock and Roll Hall of Fame this year. "

...

This is the sort of model that people have been talking about doing, but this is the first time an act of this stature has stepped up and done it. . . . They were a band that could go off the grid, and they did it." Radiohead's latest news has been one of the most popular blog topics of the week, and many are saying it could be mark a watershed for the music industry.

It is no question that the music industry, which includes radio and its new formats, is one that is constantly changing. New developments like Pandora online radio and free downloads will both impact radio for sure, and marketers will have to adjust accordingly.

The "On Demand" Era

New developments in technology have been increasingly leading us to become an "On Demand" entertainment culture. Music is emerging as something we can purchase from almost anywhere. “For the customer it’s an instant gratification,” said Ken Lombard, president of Starbucks Entertainment. “You’ll hear the song, be able to identify what it is and download to the device.” This feature has been introduced in 600 Starbucks locations in Seattle and New York City- however many other cities will be offering the service later this year. The purchase of these songs will show up on either the user's iTunes account, or their phone bills. The charge per song is 99 cents. According to Starbucks, they are the first of any retail outlet to offer this type of capability.

One of the concepts behind this type of marketing is to get consumers to buy on impulse, while they have the impulse. The longer a consumer has to think about a purchase, the more uncertainty can start to seep in. This development is much like the tagging feature that is being offered on HD radio. Receivers and appliances that use HD radio allow users to mark songs they hear on the radio for download. Apple also has a hand in this development. The company has really emerged as a pioneer for advances in devices, software, and conceptual developments in audio technology. "When a song plays on your HD Radio that you like, a simple push of a button will tag it and later give you the chance to preview, purchase, and enjoy it with iTunes and your iPod," said Greg Joswiak, Apple's vice president of iPod Product Marketing.

At first, the iTunes tagging feature will not be used by all HD radio broadcasters. A formal announcement of all stations that will be participating will be released soon- the National Association of Broadcasters convention that was held last week dealt partially with this issue. Already strongly on board is Clear Channel Radio, which will be broadcasting all of its FM stations in HD and will employ the tagging function. They are even urging other major broadcasters to embrace the new technology.


Devices such as this Polk, iPod player/HD radio receiver have a tag button right in the center of the console. The consortium of radio broadcasters known as the HD Digital Radio Alliance are extremely excited about the new iTunes feature, and have announced that they are planning "a multi-million dollar advertising campaign focusing on the JBL and Polk" receivers later this year. Polk says that its new products, such as the I-Sonic Entertainment System 2 will clearly indicate which digital radio frequencies have songs enabled for tagging. All tagged songs will be saved and transferred to an iPod when it is docked. Afterwards, when the iPod is attached to a computer, the users iTunes software will automatically show the information about the songs and allow purchases. All of these songs will be added to a "tagged" playlist. It will be interesting to see the numbers of songs that are purchased in light of the tagging feature- because each one will represent a product that a consumer would not have purchased without this advancement.

Sources:
NY Times
Apple Insider

More Auto Companies Installing HD

This week, a Ford Motor press release announced that it will be installing HD radios on demand, and in nearly all product lines. The product lines include not only Ford models, but also Lincoln and Mercury as well. This new feature can also be purchased for previously purchased cars from 2005, 2006, or 2007- this is available nationwide. “We believe HD Digital Radio will be an important part of Ford's commitment to delivering innovations with mass appeal,” says Kim Irwin, Vehicle Personalization and Accessories manager for Ford. “We're helping our customers stay connected by supporting the features and functions they want in their vehicles. The dramatically improved audio, text and data features of HD Digital Radio – along with its hundreds of new radio stations – create a compelling combination at the right price.”

To advertise Ford’s HD product launch, the Digital Radio Alliance will be airing a 13-week long radio-marketing campaign in partnership with Ford. The two organizations are exchanging the product installation option for complimentary advertising, which is a pretty interesting marketing circumstance. The tag line for promoting HD radio in general is"HD- Discover It!" which is a good approach to marketing, because there is still little knowledge of HD among the general public. There are two options for Ford's new feature, one is the standard HD set, and the other adds iPod connectivity- which I imagine will be very popular. The first option is priced at a suggested $279, while the latter is $299. Installing these radios takes about a half hour and adds on a $50 fee.

This is a significant step for HD radio because it will boost awareness and sales of the new audio format. Ford, which composes a huge portion of the country's auto sales could be the largest promotion that HD radio has incurred thusfar. Afterall, it was not untill auto companies began embracing satellite radio did it really take off- so perhaps the same will happen for HD radio. Ford is not the first company to begin installing HD radio, however. The pioneer for this option was BMW.

Their HD option is available for factory installation of all new models across all product lines. The HD option costs an additional 500 bucks. Other automakers following the HD bandwagon are Jaguar and Mini-Cooper USA. "We are pleased to offer our customers the high-quality sound of HD Radio broadcasting in the new MINI Cooper and Cooper S hardtops." says Rich Steinberg, the head of MINI USA product strategy. "HD Radio broadcasting now offers our customers an additional level of choices when it comes to premium, in-car audio technology." It seems as though common themes of innovation and customer options are the driving force behind offering this new feature. Adopting HD installation is also a way to assocaite innovation with your brand, not to mention press coverage and the buzz it creates through word of mouth. Figures from BMW group predict that HD radio stations will exceed 3,00 in the next few years. You can view an updated list of HD radio stations & multicast stations at www.hdradio.com. HD Radio™ is a trademark of iBiquity Digital Corporation.

The Latest on HD Radio

In light of its advantages regarding content and audio quality, HD radio has been gaining ground across the country. HD radio, also known as digital radio, is different from standard terrestrial radio in that it transmits not only an analog signal, but a digital signal as well. This allows the radio reciever to pick up adjacent frequencies, which are also higher in overall audio quality. Allegedly, the audio quality of an AM station becomes that of FM station, and the quality of the FM station becomes the quality of a compact disk.




With benefits such as these, many are wondering why it hasnt become more popular, more quickly. It has lagged far behind satellite radio in its rollout- and the advantages are quite similar. The answer lies in the heavy marketing that XM and Sirius Satellite have implemented, as well as the high cost of a new trnasmitter for radio stations. For a radio station to broadcast in HD, they have to purchase a new transmitter that costs approximately $150,000. We are seeing that the only stations that can afford these transmitters are stations in bigger cities. A radio station in a more rural area would most likely not have enough income to afford the transmitter.

There are just over 11,000 commecial radio stations in the country, and only 700 (roughly 6%) of them are currently broadcasting in HD. Radio stations are not the only ones who need to pay their way to get to HD audio, consumers need to buy an HD reveiver (much like satellite radio). Also like satellite, the real turning point for HD's growth in popularity will probably be when auto manufacturers begin putting the receivers into their cars standard. This feature could be a unique selling point for brands that realize the benefits of HD radio. Some pressure for this to come about will most likely come from wall street. iBiquity, the company that headlines the HD radio effort would love to see their product become popular in the auto world in order to gain profits for its shareholders.

One unique feature of HD radio that marketers may find enticing is the ability to have text messages appear on the HD receivers. Every HD receiver has a screen that allows the song and program titles to appear. Marketers could now not only send out audio messages, but now visual as well.

The newest development regarding HD radio is the concept of "tagging." The idea was put together via a joint effort from iBiquity and Apple. Basically a song that a listener hears on his HD radio receiver can be tagged and marked for download on the user's iTunes account. This would allow instantaneous purchasing of music due to a connection between the reciever and the user's computer or online account. Initially this feature will be available on HD receivers at home, but it is predicted to be ready for car receivers early next year.


Sources:
http://www.betanews.com/article/HD_Radio_to_Debut_iTunes_Tagging/1189193594
http://www.jacobsmedia.com/articles/tech3_hdradio.asp
360 Degree View Podcast
http://www.hdradio.com/how_does_hd_digital_radio_sound.php

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Sirius / XM Merger: An Expensive Endeavor

One of the most closely watched developments of the radio world is the proposed merger of Satellite radio giants XM and Sirius. We are all anxiously awaiting the FCC's response to the "Consolidated Application for Authority to Transfer Control" which was filed by the companies this year. As the situation progresses, CEO Mel Karmazin of Sirius and Chairmen of XM Gary Parsons are finding themselves spending hundreds of thousands of dollars in their efforts to have the merger approved. In a recent article, BusinessWeek reports that XM had spent $580,000 on lobbyists in the first half of this year, while Sirius spent $650,000. In total they have hired 13 different lobbying firms this year.

Surprisingly, this much capital is only a fraction of what the opposition has put on the table. The NAB (The National Association of Broadcasters) has spent $4.3 million in the same time frame. The NAB represents the nations traditional tv and radio stations. Obviously these groups would be threatened by the merger. The companies claim that the merger will result in a variety of benefits for consumers, which include a wider array of programming content and lower prices. Not surprisingly, the NAB is arguing that the merger would create a monopoly in the market, which would result in harm to radio stations across the nation.

What would this merger mean for marketing? If they can pull it off, it will most likely lead to a conbined increase in advertising revenue. I feel as though the union will lead to a synergistic aggregation of market share. Once the cost goes down and people start buzzing about the merger, more and more people will begin subscribing: and a larger audience = a more appetizing prospect for marketers. Basically the merger would mean bad news for traditional radio, but great news for the two companies. Many believe the FCC won't allow the merger due to the precedent of their ruling regarding It'll be exciting if it happens, but for now all the companies can do is nervously anticipate a government ruling, which should be made early next year.


This chart from Wikipedia shows the increasing number of consumer subscriptions to both Sirius and XM Satellite radio (the y axis is in millions). Both companies have promising futures, and if these trends continue they will slowly eat away at traditional radio's market share. Advertisers will, theoretically at the same rate, stray from traditional radio as well- and flock to either XM or Sirius (or the merger they create). If allowed, the merger would be huge news for the world of marketing, financial markets in the US, and obviously everyone associated with these companies. However, if the merger is shot down, all of these swelling lobbyist expenses will have gone to waste. We'll just have to wait to see how it all unfolds.

XM Satellite Radio: An Overview

XM Satellite radio is a pay-for-service set of radio frequencies that offers more music, news and sports channels than standard radio stations. The service provides 39 news, entertainment and sports channels, 21 regional traffic/weather channels and 23 sports channels. The music stations are typically ad free, yet the remaining channels avergae eight minutes of advertising per hour. This effects radio advertising in that it enables more specific targeting. The expanded set of channels results in more detailed content based on topic or region. Advertisers can now reach listeners who are more specifically in tune with their target market, such as the women's programming channels that XM currently offers.



XM radio has increasingly become an enticing medium for marketers. Last year XM Radio tripled the number of advertising agencies it works with, which brought in $20 million in revenue. The growing demand has persuaded XM to start advertising on their music channels.

"We can't keep up with the demand," says XM's sales and marketing VP Scott Karnedy. "When we broke through six million subscribers, we saw that as a tipping point [with advertisers]." Advertisers are salivating over the increasing ad space, however we'll have to see how listeners react. The lack of ads on their music channels was a huge selling point for XM. If subscriber rates start dropping, so will the value of the ads everyone wanted in the first place.

Source: http://www.businessweek.com/technology/content/apr2006/tc20060413_150389.htm

Introducing: "Blink" Radio Advertising

Clear Channel, the world's largest radio company is pioneering a brand new take on radio advertising. The industry giant, which owns over 1200 American radio stations is introducing advertisements which last only a few seconds. "Blink" ads will last only two seconds- long enough to play the company's jingle, slogan, or brand name. For example, as one song bleeds into another on your favorite radio station, you may hear McDonald's "I'm Lovin It" slogan. Another similar spot you can buy is an "adlet," which will last 5 seconds.

Even though it will not be able to communicate new offers, products, or really any information for that matter, these ads will build brand awareness and knowledge- part of the marketer's goal is to keep that brand on the top of your mind set. Marketers have always been looking for ways to galvanize radio advertising, which can be a formidable challenge because they are limited to audio.

"It really is to find new uses of radio for advertisers who are continually asking us to demonstrate that our medium can successfully extend brands, can successfully reach the consumer with touchpoints that are new and surprising," says Jim Cook of Clear Channel. The question is, will it work. Will simply registering the brand name to the consumer make a difference in their buying trends? If so, perhaps we have now found the most meaningful part of an advertisement. Perhaps now we can cut out additional information on ads which run up the costs for companies wanting to advertise. If taking the most valuable part out of an ad, and putting it on the radio for a fraction of the price of what a whole spot would be, then really we are maximizing efficiency.

As far as costs, and "adlet" is priced at 20% of the standard 60-second spot, and the "blink" is priced at only 10%. Prices will obviously vary depending on the radio station and market, but to put it in perspective- a top ten station in a major market would usually cost about $800 for a 60 second spot. This means with a blink ad, a company could get their brand name on the air for just 80$. Clear Channel's theory is that more companies will be willing to advertise using the "Less is More" strategy.

Sources: http://www.post-gazette.com/pg/06275/726832-28.stm
http://www.smh.com.au/news/world/a-brand-new-age-of-radio-advertising--blink-and-its-gone/2006/06/14/1149964608136.html

"Consumer 3.0"

Two recent articles from MediaPost.com give opinions regarding how the marketing industry learns about their audience. "On the Record: They Aren't Just Like Us" by Mike Bloxham describes the audience as being very unlike market mavens who work in the field. The consumer is portrayed as being relatively unconcerned or even oblivious to the media world and its trends. The average consumer is merely concerned about last night's game or a game show, and is only concerned with what they want out of the media. Bloxham thinks we should be weary of the hype that the dotcom bubbles ultimately generate. The truth is, not everyone is blogging, watching videos on their ipods, constantly using blackberrys or spending their time in virtual worlds. When those who work in the industry learn about the audience, they have to keep in mind that not everyone is as media-savvy and trend-driven as they are.

In "Consumer 3.0: Survival of the Fittest," Peter Lauria tells of the new breed of consumer that is "as much a creator of content as a consumer of that content." The new wave of internet has become a place where consumer created content aggregates in a hub of mass social networking. Sites like youtube, myspace and wikipedia exist due to the people who edit and contribute to them. The time of RSS and Web 2.0 has spawned what Lauria calls "Consumer 3.0," who is writing, splicing, editing, shooting, and manipulating content on the new media ecosystem. Accorind to a study by the Pew Internet & American Life Project, more than half of children ages 12 to 17 are using sites like facebook and myspace to upload files, %55 of them to be exact. This effects how the industry learns about the audience it can now do so by viewing messages, blogs and videos online. Tapping into these new web-based networks gives us a window into the lives of the consumer. This age group is growing up in the 2.0 environment, which means they will most likely continue to do so as time goes on. As NBC s Alan Wurtzel articulates, "The media you grow up with basically determines the kind of media consumer you'll be."

(Podcasting)

Podcasts present a whole new take on information gathering. It is a more personal and dymamic way to get newsfeeds, information and opinions from experts in a given field. Subscribing to a podcast cuts out the need to search for the information you want, as the subsequent broadcasts are automatically downloaded to your audio library. Getting marketing information has never been easier. There are numerous podcasts that are dedicated to advertising, marketing, new media technology, market trends, etc. All the major players in the industry (such as Ad Age) are currently broadcasting using this medium, which means that professional, insightful and up-to-date information is only a click away. Podcasting also has the advantage of being accessed at all times. We can now listen to informative broadcasts of very specific areas of interest even when we're preoccupied, like when were driving to work. iPods make this possible. These are the advantages that podcasts have over more traditional media such as print.