[BC] Re: HD Radio at CES

[Neil Glassman]

Ernie Belanger wrote on this list:

> I noted from reports coming out of the CES that there are a number of new
> radios which will feature multi cast reception capability.
> 
> That's good 
> 
> What's bad is that they are all still at $300 plus.

Yes, the high price of HD Radio receivers may be a deployment issue. But one
needs to acknowledge the steady release of additional HD Radio-capable
products for both the car and the home. Some manufacturers pushed the WOW!
factor to early adopters (Yamaha comes to mind) while others like Panasonic
presented HD Radio as a feature one will come to expect in a car's
entertainment system?creating a level of comfort for the CE retailers who
are the key constituency of the CES.

Just as with every CE product, once there is more competition and volume,
prices will fall precipitously.

> At this rate the it will be 15 years before there are enough radios in the
> field to justify the cost of ramping up HD.

Not sure where that 15 year figure comes from...
 
> That is unless you believe the latest prognostication from Kagan Media who
> claims revenue from HD radio ad sales could (note that word...COULD) be over
> $805 Million inthe next three years.
> WOW.. I wish we could all be smoking some of the stuff that analyst is
> smoking.  The numbers don't jive. In three years we'll be lucky to see 100K
> radios in the field.

The Kagen report on http://www.kagan.com/ContentDetail.aspx?group=5&id=129
also noted that the $805 million in HD Radio-related revenue represents only
4% of overall radio revenue, so in the grand scheme of things, it is a
rather conservative figure.
 
> And don't expect the commitment of the HD Consortium to spend $200Mil pushing
> HD to impact that much. It turns out that it is all radio promotion
> commitment. Not real money to be spend on multimedia advertising. Just radio
> promoting itself: (see below.*
> 
> The irony is that the latest Advertising Age Magazine  (1/2/2006) shows that
> in all age groups from 18-55+ when the question is asked "what media
> influences your purchase of electronics?"  Radio is not listed in the top 5
> influencers.

If this article was referring to the December 20 report issued by
BIGresearch http://biz.yahoo.com/iw/051220/0104538.html then radio is not
one of the top 10 influencers for purchases across the board. If that's
really the case, we should hang up our cleats and go home ;-)) A possible
wild card is that word-of-mouth (which is #1) is hard to trace back to its
media source... you heard about something from Joey, report that to the
study, but no info is obtained on where Joey heard it.

Perhaps Ad Age was quoting a different study.

More relevant would be to learn the top influencers for media content,
because content, not technology, is what we ultimately will sell the
consumer. Only Steve Jobs can succeed in giving away the razor blades and
selling the razors.
 
> What is needed is $200MIL to be spend by broadcasters on a slick TV, Print,
> Internet and Radio campaign pushing HD radio. If HD is to compete with
> Satellite radio, Ipods etc, broadcasters need to use the pages from their
> (satellite Radio & Apple's) advertising and promotional playbooks.
> 
> Radio's own ad execs are trained to advise clients that they need a mix of
> media to sell product. Radio being a part of that mix .. maybe they should
> take heed of their own advice

Good point. It is my understanding that the $200 million committed by the HD
Radio Consortium is incremental. This is in addition to current radio
promotion dollars which do include a media mix. This is going to be a real
opportunity for the radio promotions community to exercise their creative
chops.

Ciao,
Neil
-- 
Neil Glassman, VP Strategic Marketing
Broadcast Electronics Inc.