Bob Harper
by Bob Harper
I feel fortunate to have been involved in two landmark studies for HD Radio. The first was a set of twelve Focus Groups conducted across the country in November of 2005. More recently, this Spring, the research team at Paragon Media Strategies completed an online HD study of 16-64-year-olds that refined and updated our understanding of radio listeners’ developing relationship with HD Radio.
In my experience, HD Radio has been an industry reaction to the many new channels satellite companies have introduced to the audience. I suspect HD Radio was born of the questions to radio group heads posed by Wall Street on their quarterly calls. “What are you guys in radio going to do about XM and Sirius?” “Looks like you’re prepared to let satellite grow and grow at your expense.” “What is your plan?” At the time, satellite radio was all the buzz even though their listening share was not, and is not today even in the same ballpark as terrestrial radio’s.
Will HD Radio be a folly or the next step in the evolution of radio? Now that almost 1500 radio stations have armed their transmitters for the HD encounter, what does the field of play look like today? Our latest online study shines the headlights on these most recent road signs.
Since the nation’s first commercial HD Radio broadcast in 2003, the new technology has never achieved a respectable awareness level. Sadly, after four years, less than half our Internet-savvy radio listening respondents had even heard of HD Radio. Compare this to the 85% who are aware of Internet radio and 87% who were already familiar with Satellite Radio. And, the massive awareness gap with HD is not the result of some grossly unfair head start by Satellite Radio. The two Satellite services and HD Radio were launched, essentially, only two years apart (**). Yet, in 2007 awareness of HD Radio is half that of the Satellite channels.
Perhaps even the low 42% awareness mark for HD Radio is overstated. In this Paragon study, it seems that up to one-third of those aware of HD might have the technology confused with Satellite channels. During Focus Groups, I have seen confusion between HD Radio and the cable music channels often included with a TV subscription. The listener logic goes like this: HD = HD.TV = TV on the Cable = Music channels on the Cable = “HD Radio must be those music channels that I get through Cable.”
With the awareness deficit in mind, it is encouraging and hopeful to see the HD Alliance of stations advertising so aggressively, especially lately. In Denver, for example, the Alliance has been the top radio advertiser in their effort to raise the awareness of HD.
Awareness is fundamental to any product’s success. If you are competing with a popular and well-known market leader you know what I mean. People will have a tough time finding you, buying you, trying you, or listening to you if they have never heard of you or if a brand leader so overshadows you that your product cannot find a way out of the dark. This is usually where maniacal fans come in, driving a less familiar product’s popularity through word-of-mouth and outright firsthand witnessing. Movies and TV shows often benefit from this sort of drive from the fans. Remember “Blair Witch Project” and “Borat?” And, let’s not forget Seinfeld and The Cosby Show, both energized by their fans, not in the network suites.
So, does HD Radio have hardcore fans? The answer, by and large, is “Yes,” although there are not enough of them to compensate for HD’s sorry awareness. Here are some quick findings that explain why my “Yes” is conditional:
42% are aware of HD Radio … only 35% of those can tell you the name of a radio station broadcasting in HD Of those, two-thirds are not listening to HD Radio stations more often even though those listeners give HD high marks for its sound quality. So, by the time we drill down to the core-core-core HD listeners, things look somewhat rosy.
More good news: If a listener is aware of HD Radio, they can tell you these three benefits: (1) Stations sound better, (2) There will be more channels, and (3) There is no monthly fee. In addition, those who actually own an HD Radio are listening to “radio” more often while the HD core is likely to purchase a HD Radio if the price drops to the $40 range (at $200, the purchase potential is cut in half).
On the downside: 35% believe HD Radio requires a monthly fee … A bare 11% own a HD Radio (or think they do). And, two-thirds of women have never heard of HD Radio.
Let us return to the Quality issue, because I think there is some very important information between the lines of our study. My speculation at this point is that the term “HD Radio” is good for promoting quality (“HD”) and much less effective at helping listeners understand what the new service can do for them (“Radio”).
In our Paragon study, if listeners were aware of HD Radio, we asked them to tell us, in their own words, how they would describe HD Radio. The top four answers were all, essentially, interchangeable with HD-TV and dealt with improved technical quality. Add to that the whopping 84% who think HD Radio “…makes stations sound clearer and better.”
To date, then, from the listeners’ perspective, HD Radio is almost strictly a quality play. When asked to tell us what they expect from HD Radio, only 5% mentioned “More Channels/Stations” on their own. After hearing a list of attributes, though, two-thirds said, “Yes, there will be more stations with HD Radio.” The listeners seem to know this, but not at a top-of-mind level.
Which brings to mind several thinking points as HD Radio moves forward…
- The listeners know that an HD-TV channel is airing the same content as the regular TV or Cable channel, only at a different dial spot and in sharpened and superior visual quality. ESPN is airing the same NASCAR race as ESPN-HD, for example. What is it about HD Radio that tells them to expect different programming on our HD-2 channels? This is critically important because if the listeners assume our HD-2 will give them the same format you have now, will sound a little better, but cost them $___ for each new set, why would they bother? Do you believe they think our quality is that poor now?
- How are we going to close the yawning awareness gap? With the vast majority of promotion for HD Radio coming from terrestrial stations, aren’t we ‘advertising the new soft drink primarily on the Coke can?’
- When will HD Programming be worth the listeners’ trouble? Given several chances in our study to rave about the new and improved programming on the latest HD channels, almost no one did.
- Finally, from your listeners’ experience HD Radio, HD-TV, and Satellite Stations all appeared as new ideas at about the same time. “HD,” “Digital,” “Cable,” and “Satellite” are all too often interchangeable concepts. How are we going to set HD Radio apart from the rest in the new digital pack?
(**) XM was named Time Magazine’s “2001 Invention of the Year” and Sirius was launched a year later, in 2002. According to iBiquity’s Web site, HD Radio’s first commercial station was KISS 102.7, Detroit, on January 7, 2003.
Bob Harper is Senior Vice President of Paragon Media Strategies. Contact Bob at BobHarper@paragonmediastrategies.com or 866-2122-4700.
