“IT SEEMED LIKE A GOOD IDEA AT THE TIME…”

We recently compared HD Radio to “New Coke” in a story about the development HD, one of the biggest boondoggles in media history.

A reader contacted us with a question: What is New Coke?

In the early 1980s the Coca-Cola Company thought they had a product problem. Their leading drink, Coca-Cola, was loosing market share to Pepsi-Cola and diet colas. Customer research indicated that people were growing tired of the taste of Coke.

Coca-Cola decided to reformulate the recipe to make Coke taste a bit sweeter, more like Pepsi-Cola.  The company did “blind” comparison tests between the product that was then on the shelves and a “New Coke," developed in Coca-Cola’s labs in Atlanta.

The test subjects overwhelmingly preferred the taste of the new formula. Coca-Cola secretly continued its research and development for two years. The name chosen for the new, improved beverage  was “New Coke.”

Roberto C. Goizueta, Chairman and CEO of Coca-Cola, left,

celebrates the launch of New Coke in April 1985

Then on April 23, 1985, New Coke was launched with a multi-million dollar ad campaign. 

The ads said that New Coke would replace the Coca-Cola on store shelves.

People had been drinking Coke for almost 100-years. 

The message consumers heard was "the  Coke you love is going away."

The reaction by customers was overwhelmingly negative. People began hoarding the old stuff. Soon, cases of Old Coke were being sold for $30. Bottles of Old Coke were stored like they were fine wine.

The execs at Coca-Cola quickly realized they had made a huge mistake. 

On July 11, 1985 the company yanked New Coke from store shelves. By the end of that month, New Coke had vanished and was replaced by "Coca-Cola Classic” made using the original formula.

Despite millions of dollars in research and development, it turned out that Coca-Cola had failed to ask consumers a key question: Do you want a new Coke?

This mistake has been made many times in many industries including media platforms and devices. Here are a few examples of media products that looked good in the Board Room, but were dead on arrival in the real world:

THE IN-CAR RECORD PLAYER

 "

Bet your "connected car" doesn’t have this device! 

In 1955 Chrysler debuted the Highway Hi-Fi, an in-car turntable offered to Imperial buyers for $75 per unit. 

The advertising for it crowed:

It’s another Chrysler Corporation first! The Highway Hi-Fi record player slides in and out easily and can be operated without taking your eyes off the road!

Chrysler was so certain this would work that they induced Columbia Records to spend thousands of dollars to developi vinyl records for the Highway Hi-Fi. 

The records were thick 7-inch discs that played at 16 rpm. In theory, they would provide up to an hour of entertainment. Chrysler actually sold sold over 18,000 Highway Hi-Fi record players.

Only one thing was missing was common sense. The turntable skipped whenever the vehicle of a hit a pothole.

LESSON: Things that are developed in the lab need real-time testing for obvious flaws. Today’s Connected Car manufacturers are relearning the meaning of the term “distracted driver.”

AM STEREO RADIO

By the late 1970s FM began its domination of the radio dial. 

AM station owners pushed the FCC to save them. 

People hypothesized that if AM radio could deliver stereo sound, the rush to FM would be over.

The FCC dithered. In 1980 the Commission selected a Magnavox AM stereo system to be the official standard. This led to lawsuits from competitors. By 1982 there were four competing AM Stereo systems. None of them were compatible with each other.

This totally confused consumers and AM Stereo soon faded away.

LESSON: The FCC doesn’t always know best. FCC approval does not ensure success.

QUADRAPHONIC FM

Question: What is better than two channels of FM?  Answer: Four channels of FM.

That was the common wisdom in the late 1960s and early 1970s. Soon came Quadraphonic vinyl albums and FM stations. 

Manufacturers foresaw a day when audiophiles would want to upgrade to four channel sound.

Record companies thought people would want to update to quad so they could better hear their Credence Clearwater Revival vinyl albums.

The BBC had developed quadraphonic recording and it soon became the de facto standard. WIBQ in Detroit was the first U.S. station to “go Quad.”

Quadraphonic FM hit its high point in 1974 when Classical station WNCN, New York changed its call letters to WQIV and adopted an all-quad AOR format.

But, things didn’t go well. The 4-channel systems required a sizable room and record companies released very few titles in the quad format. WQIV went out of business in less than a year.

LESSON: FM quad was cooked up in the Board Room to sell records and hardware. But the corporate folks failed to ask the question: Do people really want 4 speakers?

HD RADIO

The photo on the left is of a Radiosophy HD Radio. 

Hundreds, perhaps thousands, of Radiosophy tuners were purchased by public radio stations and used as pledge drive premiums to promote station's new HD channels.

As it turned out, Radiosophy became part of the “road kill” caused by HD Radio. Today you might find a Radiosophy tuner for sale at a flea market.

We recently published a chart showing the audience for Classical music on HD channels that are not re-transmitted on FM translators.

LESSON: Beware of hype. 

The development of HD Radio is in many ways similar to New Coke. 

It was created in corporate boardrooms and designed in the lab. But, it was never tested with consumers before it went on sale. Today HD Radio is good for one thing: Feeding FM translators.