[BC] Yet another HD ... XM HD

[Rich Wood]

------ At 12:11 AM 8/29/2006, Stan Tacker wrote: -------

>I agree with Rich.  Using the term HD in connection with satellite radio has
>a better chance of success than applying it to IBUZ.  Satellite radio has
>had more ramp-up time.

It's not only ramp-up time it's quality and quantity of its 
marketing. IBUZ is using the Keystone Kops for marketing and using 
"funny money" (station inventory). Satellite radio is marketing the 
way a major manufacturer would. Ad agencies. Point of purchase 
displays. TV. Print. The kinds of advertising that would bring in 
cume (new samplers) to radio. The HD Dominion is using distressed 
inventory and preaching to the choir. You don't increase sampling by 
advertising to existing listeners.

The iPod user we fear losing isn't going to hear the self promotion. 
They're not listening. The only way to reach them to get them to try 
a deaf table radio that costs about as much as a good iPod is on TV, 
in print and in stores.

>I ran the term HD radio past a friend of mine who is a local TV station GM.
>I asked, "Do you know what it is?"  No.  He had seen the ads, but didn't get
>the message.  This guy is a pro, yet he is focused on TV, not radio and the
>Dominion's message hasn't trickled down.

Where has he seen the ads? Is there a station, somewhere, promoting 
IBUZ on TV? Has there been an ad in "Sound and Vision?" How about 
in-store displays? My local Tweeter store has a BA Receptor on a 
pedestal in plain view with a Terk antenna connected. It can't 
receive a thing. There's no information available. Until you get 
close up and read the price tag ($254) with a bullet-point 
description you have no idea what it is beyond an expensive regular 
stereo table radio. The fact it can't receive anything doesn't help 
sell it. They tell me 3 have been sold (to radio stations) in the 5 
months they've had them. Right by the door are the elaborate 
satellite radio kiosks. Every receiver of every description actually 
works and all the accessories are on display. Next to it is an even 
larger iPod display with an even larger collection of accessories. 
Pardon the pun but it's serious marketing.

The actual operating Receptor is in the sound room connected to an 
outdoor antenna. Ask your friends how many of them will put up a 
rooftop antenna. Those who spend $2000 on a Yamaha IBUZ receiver 
might, but not for a radio probably used primarily as an alarm clock. 
The many people I've asked have all laughed at the concept of a "TV" 
antenna for a radio. The Polk receiver was also connected to the 
master antenna. I'm going back in a day or so to try the BA rat tail 
antenna on the Polk to see if it's any better. The AM on the Polk is 
worse than the BA. Reports here indicate the Polk's FM isn't as good 
as the BA. We're starting out with substandard receivers (except the 
Yamaha) and no portable devices. Still we hear about this 
"revolution." It's pitting squirt guns against laser-guided weaponry. 
Deceptive hype doesn't help the cause, either. Seedy quality and FM 
quality on AM is just the beginning of a failed marketing strategy. 
Listen to the Yamaha with a CD source, then switch to IBUZ in a high 
quality sound room. The artifacts we hear in a noisy car environment 
are nothing compared to those on a high end system. Stations without 
secondaries sound reasonably musical. Add a secondary and they have a 
mechanical sound. The silky stings turn into copper tubing bowed with 
hacksaws. A little exaggeration, maybe, but not much to my ears.

>I put on my best HD Cheerleader face and described the
>system.  I asked if he would buy it.  Answer, "no way."  Reason: too much
>content already available.  Any interest in multicast?  Nope...FM SCA
>already exists.  Harsh but honest assessment.

I can't buy the SCA or content argument. Especially from someone 
competing with hundreds of channels on cable and satellite, not to 
mention his own extra DTV channels. Most TV stations can't figure out 
what to do with them beyond displaying their doppler radar 24/7. 
Since most cable systems carry only the HD channel, the remaining DTV 
channels have few OTA viewers. Radio Shack tells me they're selling a 
lot of outdoor antennas to receive HDTV. The guy I bought my Channel 
Master 4228 8-bay UHF antenna tells me he can't keep them in stock. 
Same with high end antenna amplifiers. The 4228 can, strangely, 
receive high-band VHF but it's it's blind below channel 9, so it 
can't be used for FM. As you can imagine, it's very directional. All 
the TVs in my market are within its pattern (except the VHF one) so I 
either need a rotator or a separate VHF antenna. I have a separate 
VHF. In my market, with a couple of exceptions, OTA is much better than cable.

We already know the system isn't ready for prime time. What really 
concerns me is the future economic cannibalization of our existing 
product. Is there anyone here either in sales or teaching economics 
who can tell me what adding potentially 7,000 new competitors might 
do to both ratings and rates? Unfortunately, it's still Summer and 
I've been unable to reach anyone on the economics faculty of any 
university I've called. I'm looking for an academic opinion on what 
impact glutting a market this way would have. I believe I know the 
answer, but it would be good to back it up with an Alan Greenspan-type opinion.

Rich