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Making Money with HD2, HD3

By Leslie Stimson, April 14, 2010


The recently FCC-approved FM HD Radio power boost is big news here in Las Vegas as transmission manufacturers on the exhibit floor talk to current and potential customers about how to accomplish the voluntary 6 dB — and potentially up to 10 dB — increase in digital power.

HD Radio’s Kelly Jarvis (right) demonstrates an HD Radio receiver to Nick Wymant of RFS.
Meanwhile, iBiquity is trying something different this year with two exhibit spaces and is displaying factory built-in HD Radios in a 2011 Ford 250 Super Duty pickup truck and a Volvo XC60. The automobiles are located in a prominent spot in the Grand Lobby between the North and Central halls.

“NAB wanted to do something special in that space,” said iBiquity Digital President and CEO Bob Struble.

Attendees can sit in the vehicles and listen to HD Radio. “If people see something, they’re more likely to buy,” he said.

iBiquity is making progress with consumers, with more than 2.5 million HD Radio receivers sold to date, according to Struble and Rick Greenhut, director of U.S. broadcast sales for the technology developer. Both say plenty of stations are using HD Radio technology to make money.

Moderating “HD Radio Digital Marketing: Cashing In on All Your Content,” Greenhut highlighted six stations that are making money with their multicast channels.

In general, he said, HD2 and HD3 channels have “become the training wheels for some advertisers” who can’t afford to be on the main channel.

Indie rock station Radio You Boston, whose target demo is 18–24, tied in HD2 spots with Web banner ads and branding. The Connecticut School of Broadcasting and condom maker LifeStyles bought advertising schedules on Radio You Boston. LifeStyles gave thousands of condoms with specially branded station packaging to the HD2 station to hand out at events.

The HD3 channel of WAMU(FM), Washington, “Bluegrass Country,” is nearing its third anniversary. In a recent fundraiser, more than 400 members donated a total of $40,000.

A spokesman for KSHE2 in St. Louis, an HD2 channel, said in a video played for attendees, “We want to get people back from satellite and iPods. We want people to think of HD Radio as newer than the Internet.”

Graffiti Radio in Wilmington, Del., is targeting students in high school and college, an age when buying habits are typically formed.

The HD2 channel of KNDE(FM), College Station, Texas, programs “Rock Candy” on its HD2 channel and uses its HD3 station for its own product. “Play & Replay” airs original coach interviews and other station-produced sports material.

A station representative, speaking to attendees from a video, said they have to promote the multicast station with limited resources, and without hurting their main channel.

Utah Public Radio in Logan, Utah, features “Fusion HD3.” It has new underwriters that want to buy only on the HD3 channel, according to Greenhut. Students run this college station.

And finally, the Pittsburgh Penguins believe they have the first HD Radio station devoted to a professional sports team. The HD2 slogan is “All Penguin hockey, all the time.”

BIA/Kelsey predicts there will be $500 million in revenue from digital radio in 2010, including the Web, mobile apps, streaming and HD Radio, noted Greenhut. The stations discussed in the session provide incentives to sales people to sell the multicast channels. “They place a dollar value on HD Radio spots — [they’re] not just throwing them in.”

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