CPB SAYS STATIONS MUST KEEP SUBSIDIZING THEIR HD RADIO CHANNELS

HD Radio is a lemon.

By now, anyone who follows trends in media knows that HD Radio is a failed product. 

Despite this reality, the Corporation for Public Broadcasting (CPB) insists that as many as 300 stations that took grants to build HD stations, are still financially responsible for their continued operation. 

CPB requires stations to keep their HD channels operating or be forced the pay back the grant money.

Spark News asked CPB for comments about HD Radio, the grants they made to stations and the fact that these channels have virtually no listeners.  We received this reply from Shana Teehan, CPB’s

Vice President, Communications:

CPB’s policy is to require stations to fulfill their obligations under contract.

That’s it. CPB takes no responsibility for enticing stations to build and operate HD stations. CPB offers stations no best practices or even advice about how to monetize their HD stations.

People were optimistic about the future of

HD Radio in 2008 according to this chart from

the investment firm BIA Financial

CPB and NPR were initially enthusiastic about HD Radio. NPR Labs worked extensively with iBiquity, the company that owned the patent for HD Radio, when HD was still in the planning stages.

According to a report in Current from 2012 [link], CPB created a Digital Conversion Fund and began awarding grants to stations to in 2002. 

 

By 2011, when the grant program ended, CPB had awarded over $60 million in grants to convert 680 public radio transmitters to HD Radio. CPB also paid a group license fee to iBiquity for public radio stations to adopt its technology.

CPB made it easy for stations to get into HD Radio. Typical Digital Conversion grants were around $75,000 per station or 70% of the project cost (whichever was greater). Stations serving minority audiences and hardship cases received even more grant money.

One station manager, who asked not to named, told Spark News in 2016:

“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 justified the HD adoption because they replaced aging analog transmitters.”

Unfortunately, consumers never embraced HD Radio. But public radio stations are still paying the costs of programming and operations because of the CPB mandate. Station managers told Spark News that the cost of operating HD channels is between $10,000 and $100,000 per year, per channel.

In 2015, a landmark study of HD Radio by C. C. Halbert from the Miami University [link] said the HD Radio failed because:

(a) The emergence of other audio digital technologies

(b) A poorly planned rollout and marketing of the product

(c) Little return on investment for broadcasters

(d) Lackluster programming and other associated content

HD RADIO IN 2020

According to Nielsen Audio’s November 2019 PPM ratings, only 16 public radio HD channels had enough listening to meet Nielsen’s minimum criteria.

Some stations are using their HD channels to feed FM translators. But in most markets there are no FM translators available.

Spark News asked Mike Crane, Director of Wisconsin Public Radio (WPR) about WPR’s HD Radio experience:

Crane: “We took advantage of CPB funds and added several (don’t know the exact number) of HD stations. Our goal was to have an HD signal in every market and we continue to maintain that.”

“We often debate debate their value of HD Radio. WPR’s engineers are concerned that HD accelerates the aging of transmitters. For most of them the audience is vanishingly small.”

“Yet, the digital rights for using the HD signals as a streaming feed are very affordable. Streaming now gets as much listening as several of our radio stations combined.”

THE MIGHTY RED HD RADIO

Over the years there have been champions of HD Radio. 

One person who was at the top of list was Eric Rhoads, a former commercial station owner and publisher of Radio Ink.

In 2009, Rhoads became concerned about the lack of enthusiasm for HD by his fellow radio broadcasters. 

To build awareness, Rhoads created The Mighty Red HD Radio.

Eric Rhoads

The Mighty Red allowed the user to easily tune to HD stations in their area. Rhoads marketed the devices to entice radio professionals and their companies to promote HD channels. The Mighty Red cost $35. (We still have our Mighty Red and it works fine.)

Rhoads hoped that The Mighty Red would change opinions about HD Radio. But that didn’t happen.

We contacted Rhoads for comments about the reality of HD Radio now, more than 10 years after he launched The Mighty Red. He did not reply to our emails.