TO UNDERSTAND CPB’s STAKE IN HD RADIO “FOLLOW THE MONEY”

This is an updated version of a column originally posted Monday, February 2, 2015.

A little over a year ago I reported on the dismal situation regarding HD Radio at CPB-funded stations and CPB’s role is this fiasco. I am not blaming CPB or anyone else. CPB’s plan was hatched at a time in the early 2000s when future adaptation of HD technology was unknown. 

 
 

Source: Jacobs Media

As we now know, virtually all consumers have rejected HD Radio. Aside from cheery company-sponsored news releases in Radio World there is little conversation now about HD. Stations that accepted CPB’S offer of start-up money to create HD channels are mandated to keep the channels going regardless of the cost and lack of listeners.

To the best of my knowledge every HD channel has appeared in Nielsen Audio’s ratings does so because the HD programming is repeated on FM translators.  When someone is listening to HD on FM, they are listening to FM.

Source: Jacobs Media

In February 2015 I asked for comments about HD Radio on the PubRadio list. I received over 40 replies. Below are station folk’s comments from a year ago. Has anything changed over the past year. I don’t think so.

In 2015 one NPR station manager advised:

 

To understand what is going on with CPB, iBiquity 

and HD Radio, follow the money.

How much money has CPB invested in HD Radio? 

I asked CPB but they never replied.  Maybe CPB doesn’t even know.

CPB made it easy to get into HD. A highly respected station manager, who asked me to keep his name confidential, put it this way:

CPB's HD grants were the fastest and easiest $75,000 anyone in public radio ever came by.
 [CPB’s] HD radio campaign was a stimulus for spending money on hardware. CPB temporarily assumed PTFP's role of subsidizing equipment replacement. Many stations justify HD adoption because they replaced aging analog transmitters.

There have been enormous opportunity costs for HD. CPB's millions might have been better sunk into stimulating journalism. Untold staff hours were wasted on HD - logistics, installation, promotion, programming. 


RUNNING THE NUMBERS ON CPB's INVESTMENT IN HD RADIO

Here is my guesstimate of the investment in HD Radio by CPB and CPB-funded stations as shown in public documents:

• A CPB press release said approximately 300 stations participated in CPB’s HD Radio digital conversion. 

• The average cost to establish HD Radio capability was around $130,000 per station. 

• CPB paid $75,000, or 70% of the project cost to entice stations to build HD channels. Minority service stations and hardship cases got more even more money and/or a higher percentage of funding from CPB.

• Lets say CPB spent $75,000 for 200 stations to move into HD Radio; and $85,000 for 100 stations to the same purpose. Assuming these figures are correct, CPB’s investment to stations into the HD Radio business is at least $23,500,000.

Other reports said CPB's investment is even more than $23,500,000:

To date, the Corporation for Public Broadcasting has given member-stations approximately $50 million in HD Radio “upgrade” grants (some of them of the matching variety). [link]

These estimates do not include station investments, licensing fees paid to iBiquity, programming or operating expenses. 

STATIONS ARE ON THE HOOK FOR HD CHANNELS

As part of the agreement with CPB for stations to build HD capacity, the stations made a long-term promise to continue operating their HD channels or they had pay back the money.

One station manager described the situation this way:

Pity the poor stations that are still touting their HD service that no one listens to.
 To this day, NPR still exploits station's HD innocence by charging $3,000 / year to run NPR on HD. How many stations flush $3,000 down that rat hole?


Nothing has changed in the year since February 2015. Stations continue to subsidize HD channels that reach virtually no listeners. This is a waste of valuable public service funding.

THE POOR MAN’S STL

One of the few benefits of station investment in HD Radio is that it provides a cost-effective way to feed FM translators. We reported on one example in January 2016 [link].

American Public Media’s (APM) 89.3 The Current is expanding its reach with a new Instant FM Station covering the Duluth/Superior metro area. The new Triple A outlet debuts on February 1, 2016 at 90.9 FM. 90.9 will become a repeater of APM’s WSCN-HD2 signal.  This is the way new Instant FM Stations are created these days.

APM set the stage for the new station last year when they bought FM translator W215CG from declining religious owner Family Stations for $45,000. APM upgraded it 99-watts at an awesome tower site giving the new 90.9 solid coverage of the entire metro. This is what HD Radio success looks like.