Wednesday, April 02, 2008

Cleaning out the closet Part 1: The industry shell game

Quite often, there are many little goings-on in the radio and media world that are difficult to really flesh out into individual articles. Or there is quite a bit that I may have missed over the course of a few days or weeks or whatever. Over the past month, there were a few items that fell by the wayside. As I write this, I found that I had so much to talk about that I actually had to split it up into three parts. Let's play catch-up, shall we? Here's part one, in which we touch base with happenings in the broadcast industry.

First, there's been a lot going on in the industry. The Sirius/XM merger got closer to reality, as the Department of Justice gave their stamp of approval to Sirius' $5 billion buyout of its satellite radio rival. despite the hurdles thrown out by the land radio-based lobbying group National Association of Broadcasters, regulators felt that the merger is not likely to substantially hurt competition or consumers. The merger still has to pass FCC muster, but it looks like it will get the green light from Chairman Kevin Martin, a notorious fan of overly-consolidated radio.

Although the merger of the only two satellite radio companies will basically create a monopoly, the move could be good for listeners who have had a difficult time choosing between the two. Sirius honcho Mel Karmazin has been floating around the idea of a la carte packages, available for as low as $6.95 a month, to make it go down smoother.

Though detractors claim that the satellite radio merger will create a sanctioned monopoly, all parties involved may see a new kind of competition, from the phone companies. AT&T and Verizon were the big winners in the recent FCC spectrum auction, in which chunks of the 700MHz broadcast spectrum were sold to the two telephone giants. In addition, the conditions of the sale will also allow third parties, such as Google, to participate in one form or another. What's to become of the so-called "C Block"? Likely, we'll see some form of the much-promised Wi-Max technology, which will bring more wireless internet service to portable devices. And with that, people could simply listen to internet radio or more personalized services such as Pandora. with much more efficiency. Nobody knows what exactly will go on with this reallocated spectrum, which is currently being used by television channels 52-69 and will be vacated next February when the country switches full time to digital broadcasting. Which reminds me, have you antenna heads requested your DTV tuner box coupons yet?

While Sirius, XM and the telecommunications industry have something to smile about, the same could not be said for Clear Channel, a company that saw its fortunes skyrocket during the Bush Era. Unfortunately, those same fortunes turned to dust as the Bush Era economy has gone down the toilet. With banks currently afraid of lending money to anyone, this bodes poorly for their proposed sale to a pair of venture capital firms. What comes around goes around...

Elsewhere in the radio industry, the HD Digital Radio Alliance only wishes it had the problems of these 'Masters of the Universe' (borrowing a line from Tom Wolfe). Yes, HD Radio is still around and they're still peddling this poorly-promoted technology, which as of late seems to have fallen off the face of the earth. The cure for this ailment? A new marketing campaign, of course.

They're claiming that consumer awareness of HD Radio is high, at around 77%. But let's get real here - the Alliance's bungling has made it too difficult, expensive and confusing to actually obtain a radio capable of hearing it. Granted, a few auto manufacturers have signed on, most notably Ford and Volvo. But just try finding an after-market audio unit that doesn't require a separate tuner (bringing back the dreaded days of the old FM converters for AM factory units back in the 70s). The earlier generation HD Radio units had their flaws, and seem to have disappeared from the marketplace. Retailers have no clue how to sell them. And where are the portable units? People don't listen to radio that's plugged into a wall socket, unless they're at work, and broadcast signals often have problems penetrating those big glass cubes that house many of these workers. HD Radio has potential (except for the AM part of it, which is a really bad idea), the side channel concept is a really good one, and the technology has room to grow. But it's simply not ready for prime time, and until the Alliance becomes less concerned with collecting royalties off it and becomes far more focused on attracting consumers, it may go the way of AM Stereo. Such wasted potential.


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