A lot can happen in a year and it’s been just that long since FMQB checked in with iBiquity President and CEO Bob Struble. From this point in 2009 to 2010, HD Radio has seen significant growth across auto, consumer electronics and new portable devices, the latter of which represents a completely new sales volume. With a new focus of reaching out to consumers as radio develops content to fill out the HD 2, 3 and 4 signals, Struble sat down with FMQB to relay his message to the masses.
By Michael Parrish
Bob Struble
A lot can happen in a year and it’s been just that long since FMQB checked in with iBiquity President and CEO Bob Struble. In the time since our last conversation, HD Radio efforts have shifted from implementing the technology at radio to creating consumer awareness and getting devices on (and off) the shelves. From this point in 2009 to 2010, HD Radio has seen significant growth across auto, consumer electronics and new portable devices, the latter of which represents a completely new sales volume. As Struble notes, “They are still selling and realistically the only reason somebody is going to buy that portable device is because they want HD Radio.” With a new focus of reaching out to consumers as radio develops content to fill out the HD 2, 3 and 4 signals, Struble sat down with FMQB to relay his message to the masses.
eQB presents excerpts from the September FMQB magazine
Cover Story: Bob Struble, iBiquity President and CEO
“Our objective as a company was to focus on the consumer side and moving forward with the receivers. The objective being that when the broadcast industry gets better, radio broadcasters can look at a fundamentally different landscape. We want them to see a lot more HD Radios available and in the hands of consumers. We want them to see HD in a lot more cars. We want them to see a lot more devices. And we want to have them see for the first time there are ways to make money on HD Radio technology investments.”
“We’re not talking about changing the industry, but we’re building a roadmap and getting a sense of where revenue can come from. So our view is when the radio business improves, and we’ve seen a little bit of improvement this year, and as the digital competition increases, we think it’s time for the radio broadcasters to look again at increasing their focus on HD Radio. If I could say anything to broadcasters it would be: Tell your people to go out there and start selling, because there are good examples of how you can generate solid incremental revenue through HD Radio investments.”
“Let’s be very clear on streaming, it’s not going to kill radio. Pandora is not the Death Star that’s going to destroy the business, but it isn’t going to save it either. Streaming is, for a lot of different reasons, a good increment to the business. It serves as revenue. But the ability to replace radio’s traditional over-the-air revenue with new streaming revenue does not exist. It just doesn’t work.”
“The basic radio infrastructure where one tower covers an infinite number of listeners is a lot more efficient way to deliver audio than a point-to-point connection that you need with the Internet. People are starting to get that. We’re seeing not only the capacity issues but also starting to see variable pricing plans.”
“Receiver sales are growing tremendously. We’re going to easily double sales in 2010 over 2009. When we talked last year we only had a couple of devices. Now we’re starting to see HD Radio not only in iPod docks, but in car radios, and now you’re seeing HD Radio for the first time in Ford cars. And with iTunes tagging, pairing music discovery on the radio with music purchase is something that can lead to revenue for broadcasters, so we feel that’s moving in the right direction.”
“People are comparing the HD radio transition back to the days when FM came on-the-air and they tossed the programming responsibility to some long-haired APD, and that’s how we got AOR radio. I think you see a lot of that with the HD radio transition, but that APD probably doesn’t exist anymore. The Program Director might have three stations, so his ability to get really naughty and creative with a new HD3 is limited and that’s a little bit of an issue.”
“We’re seeing some common themes among very aggressive local AEs going out and making things happen. We do see revenue growing on the HD2s and HD3s with light spot loads, sponsorships at the top and bottom of the hour and bundled digital sales of spots on the station stream and the HD2, HD3 spots. And they are real advertisers – Budweiser, Southwest, local car dealers, those sorts of things.”
“It feels like we’ve been pushing uphill for ten years on this [auto] sector and now the rock is starting to roll downhill. We like cars a lot because it’s predictable. Once you’re in a Mustang, you’re in a Mustang for awhile. So it helps with the predictability of the business. But for radio broadcasters, it’s critical. HD Radio has got to be in cars.”
“It’s important that the radio industry understands that we spend a lot of time, and our partners spend a lot of time promoting the technology and promoting the medium to consumers. That starts with the HD Radio Alliance where they contribute air time and then produce commercials to promote the technology. This past year, Fred Jacobs became involved in a lot of the creative, and his tag line “A Good Deal More” is selling the fact that radio is free.”
“Radio is a feature that comes along for the ride on a bunch of other devices. So in reality HD Radio is an upgrade to a feature. We are very excited about the fact that we are doubling in growth every year. We have a critical mass that’s developing.”
** QB Content by Michael Parrish **
