Hd Radio

HD or hybrid digital/analog radio is a system in which digital signals of AM and FM stations are sent along with the traditional analog station sounds on the same frequencies allocated to the analog stations. The technology was developed by the company iBiquity Digital in 1991 and approved for use by the FCC in 2002. HD stations simulcast programs digitally, providing listeners with better audio quality than traditional radio as well as data services and side channels that allow for additional programming. HD radio programming is free, but people who want to listen must have a special receiver to get the signals. So far, only 12 percent of American adults say they have ever listened to HD radio, and the technology doesn't seem to be drawing nearly the interest that internet radio is generating.

Internet Participation

Broadcast radio executives are moving rapidly to work with internet radio. Just about every radio station management realizes that it has to have an internet site. The site streams what the radio station is playing but it goes beyond that to deepen and engage the user with the personality that the station aims to project. Consider the website of Power99FM, one of five Clear Channel radio stations in Philadelphia. This station focuses on “Bangin hip hop and R&B/' to quote the site. It is filled with songs, music videos, and in-studio performances that reflect the radio station's theme and website's “music on demand'' refrain. Surrounding all this music is a large promotional and advertising environment. Listeners can go to the site to find out about the station's contests and promotions. It also conducts its own contests to involve visitors. You can sign up for a VIP club to “enter exclusive online contests for concert tickets, hot prizes, movie passes, sporting event tickets, cash, trips, cars, you name it." All of this comes with advertising for local and national companies. In addition, the site connects to iheartradio.com, Clear Channel's platform for websites for its “350+ stations.'' The site also allows you to stream albums for free, create a personal playl­ist of music videos, and see various kinds of ads, some of which (for example movie trailers) are integrated into the site as if they are merely more Clear Channel content.

All these activities leverage the power of Clear Channel to create deals with recording companies and artists for the right to post material across Clear Channel's many websites. Like other internet music sites, visitors can purchase the albums online from the site, for which the company gets a transaction commission. In fact, with the idea of guiding consumers to the purchase of music online and through broadcast, Clear Channel reinforced the company's sense of itself as a part of the new digital environment. In 2007 it was among the radio groups cheerleading a new development in HD radio technology: users who “tag" a song on a special HD receiver have the option to purchase it or find more information about it when their iPod is synced with iTunes software.

The websites of stations owned by CBS Radio, Citadel, and other firms have many of the same features as the Clear Channel sites. CBS, in fact, owns LastFM, which “recommends music, videos and concerts based on what you listen to," while it also tries to facilitate discussions (“com­munity") around the music. It involves streams of its radio station programming from its website or from a central site, with specially inserted commercials. These activities reflect a changing radio industry that senses it must define itself to its audiences and its advertisers as far broader than AM and FM radio.

Broadcast Radio and Social Controversy

Radio industry executives argue that the many formats and format variations that exist throughout the country indicate that the industry is diverse and in touch with its listeners. However, others argue that Americans should find some of the activities at the core of the radio industry troubling. In the interest of better understanding the environment of sound that surrounds us, let's note two related issues, radio consolidation and the radio industry's influence over copyright fees.

Radio Consolidation

Media watchdog groups such as the Media Access Project and consumer groups such as Consumers Union argue that the purchase of hundreds of stations by large companies is reducing the amount of diversity in American radio (see Table 11.5). Media critics say that such consolidation is narrowing the actual range of music broadcast. According to these critics, when the big radio firms buy up stations, they put in place cookie-cutter approaches to formats that have proved efficient in other markets. As a result, cities and towns around the country increasingly have the same line-up of formats with the same line-up of sounds—sometimes even played by twenty-four- hour format computers in places far away. As a result of consolidation, they argue, radio doesn't reflect different regional or local tastes; nor does it encourage live performances by local artists. They add that the growth of round-the-clock format networks that has resulted from consolidation has further homogenized radio despite the large number of stations.

THE RADIO INDUSTRY’S INFLUENCE OYER INTERNET ROYALTY FEES Individuals who want to see music flourish on the internet worry that the large radio firms and the major recording companies could make it difficult for small websites to compete online. For example, if these large firms set royalty fees for the copyright holders of the music at levels that the big firms with a lot of ad revenues could afford but that small firms could not, the traditional industries could block new players. Critics argued that SoundExchange, the nonprofit organization that collects and distributes digital royalties on behalf of artists and labels, had pushed the government's Copyright Royalty Board toward a two-part fee that was unrealistic for small firms. One part was a high per-song charge, 17 cents. The other part was a $500 annual fee for each music channel run by a company. Independent sites such as Pandora argued that not only was the per-song charge tough to support without a lot of advertising, the annual fee would make it prohibitive for companies to stream a large variety of channels.

Table 11.5 Number of Stations Owned by Top Broadcasting Companies

Such a royalty regime would, in the words of The New York Times, put internet radio on its “death bed."8 But supporters of internet music resisted the Royalty Board and tried to convince SoundExchange that the record labels would gain a lot from the many sites that lower fees would encourage because they would be a useful way for millions to discover music. In 2009, they came up with a compromise that allows small sites with less than $1.25 million in revenue to pay 12 percent of revenues, going up to 14 percent by 2015, with no per-song fee. That approach will encourage even the smallest firms to have a variety of channels, even personalized channels, streaming together. Webcasters with higher revenues, like Pandora or Slacker, will pay the greater of 25 percent of revenue or a fee each time a listener hears a song, starting at 8 cents and going up to 14 cents in 2015. Internet music executives breathed a sigh of relief. "This is definitely the agreement that we've been waiting for," said Tim Westergren, the founder of Pandora, one of the most popular internet radio sites with 30 million registered users.9