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The Clear Choice: Beasley Broadcast Group Believes Adoption Of HD Is Key To Radio’s Future (09/03/07)

By Editor-In-Chief Joe Howard

Beasley Broadcast Group has made a comprehensive commitment to HD Radio; not only has the company authorized one of its program directors to critique all of its HD2 programming, it has created – with input from its stations – a company handbook with guidelines for how to program the additional channels that HD Radio technology makes possible. An active member of the HD Digital Radio Alliance, this family-run company believes radio’s future success is linked to the successful rollout and consumer adoption of digital radio technology.

“You’ve got to move technologically with the times,” says president & COO Bruce Beasley. “You can’t sit back and wait for someone else to do it; you’ve got to start somewhere, and that is why I am such a big proponent of the Alliance. You cannot not do it; that is the bottom line.”

Beasley executive vice president & CFO Caroline Beasley adds, “We’ve been in the business for a long, long time, and we’ve seen radio change over the years. It’s our belief that this is the future of radio. We’ve got to provide our listeners with what they want — better quality and more choices — and HD responds to that. We need to do this today for tomorrow.”

Management of Beasley Broadcast Group is truly a family affair; this brother and sister are part of an executive team that includes their father, founder and Chairman George Beasley, and brother Brian Beasley, who serves as vice president of operations. So their commitment to the company’s future goes beyond mere business; they’re preserving and building on their father’s legacy. And they believe HD Radio will play a key role in carrying the company that bears their family name into the future.

“I think we’ve got a good plan,” says Bruce, “and that’s the key to success in anything you do.”

RADIO INK: Beasley Broadcast Group is known as a major proponent of HD Radio. Why is the company so firmly behind this technology?
CAROLINE BEASLEY:
We’ve been in the business for a long, long time, and we’ve seen radio change over the years. It’s our belief that this is the future of radio. We’ve got to provide our listeners with what they want — better quality and more choices — and HD Radio responds to that. We need to do this today for tomorrow.
BRUCE BEASLEY: We started discussing HD in the latter part of 1999; we were proponents of it back then. Quite frankly, we were very happy that the Alliance was formed so we could get some cohesiveness within the radio industry. It’s something that the industry has to take upon itself. To get all these companies together at one time, to join in on this effort, was a big undertaking. I think the Alliance really helped us. Right now, we’re in the educational/content stage. Because there are relatively few receivers out there, we’ve got to get the consumers interested in buying the product.

RI: What is Beasley doing to educate consumers and station staff about HD Radio?
BB:
We are streaming our HD2 channels, and we’ve also done some education within the company. We had a brainstorming session in 2005 with some of our PDs, corporate engineer, and corporate communications on how we should proceed, and to lay groundwork for our company’s conversion to HD Radio technology. We’ve given direction to the radio stations — with input from them — on how to move this effort forward. We’re also working with the Alliance in helping to promote the HD effort.
CB: The main thing is for us to provide good content to our listeners. I’m sure you’ve heard all the negative about HD2 channels that play the same 16 songs over and over, or they’re just dark. We’re all so focused on our day-to-day business, but this is such an important aspect of the future that we just have to get to it. We really have to focus on the content and monitor that process closely. Bruce is working with one particular PD in our company, asking him to listen to all of our HD2 channels and requesting advice from him.
BB: And he’s doing a bang up job. We also have an employee handbook posted on our Beasley corporate website that explains what HD is all about, because we expect our people to be ambassadors out there. At many of our events, particularly in our larger markets, we’ve had an HD booth set up where we allow people to listen to our radio stations in HD. Obviously, it’s important that our HD2 channels be monitored at the station level, so early on we made sure that each general manager and program director had access to an HD radio. We distributed radios at the corporate office, which is located in the SW Florida market where our five stations all broadcast in HD Radio. HD Radio is also prominently positioned on the agenda of Beasley’s upcoming general managers & program directors meeting.

RI: Can you give an example of how Beasley is investing effort in HD2 programming?
BB:
We have some pretty darn interesting HD2 channels across our company. For example, Beach 103.9 here in Ft. Meyers plays beach music — reggae, that sort of thing — but we daypart it. We know people are sitting out on the beach during the day, and at night they’re sitting in their favorite bar or at home preparing to have dinner. We’re also getting ready to launch an HD2 that will be blues-based. We’re working with the program directors and letting them know how important this is; if we’re going to put an HD2 signal up on the air, it can’t be just left alone, we’ve got to pay attention to it, we’ve got to give people a compelling reason to listen to it. I think we've done that on those we’ve launched so far.
CB: We’re having a program director’s meeting soon, and HD Radio is a big focus for this meeting. [HD Digital Radio Alliance CEO] Peter Ferrara is going to speak to our general managers and PDs, and there will be two break-out sessions with him. There is a big focus on HD.

RI: How do you resolve putting this effort into something that so few people are hearing right now?
BB:
You have to. We have believed for a long time that this is part of the future of radio, and you’ve got to move technologically with the times. You can’t sit back and wait for someone else to do it. You’ve got to start somewhere, and that is why I am such a big proponent of the Alliance. You cannot not do it, that is the bottom line. Obviously, we expect to monetize this at some point in the future, but it is the chicken-and-egg theory. You’ve got to get it out there before you can monetize it.

RI: What are they key ways for radio to monetize its investment in HD Radio?
BB:
The primary goal of the Alliance and anybody involved in HD right now is to continue the education process and get more receivers in the marketplace. The content on the HD2 channel is important, but right now it is imperative that we continue educating the public and people who will be supplying receivers. Once we get to that point where there’s a significant number of receivers in the marketplace, then you can monetize it. Our outlook right now — and it could change — is selling commercials on the radio stations at some point, maybe years down the road. I know Caroline doesn’t like to hear this, but we’ll monetize it as soon as it is reliable enough for us to monetize.
CB: Initially, we’ll look at sponsorships to monetize this. The business model has not been developed for these side channels, but I would suspect that you’re looking at some kind of sponsorship opportunity. What goes beyond that will just kind of evolve.

RI: Will the traditional ad sales model work on HD2? Or will HD2 advertising be all sponsorships?
CB:
It very well could be.
BB: Again, we don’t have a model set, we’re just speculating right now.

RI: Are subscription-based services an idea that might play out?
BB:
No, absolutely not.
CB: I agree with Bruce, that’s something we should stay away from.
BB: The key is, this is radio. It’s a high-definition radio that will offer sideband channels, and it’s free — just like people have been used to listening to the radio for many, many years.

RI: How do you feel about what the Alliance has done so far in terms of marketing HD to consumers?
CB:
They’ve done an amazing job. We would not be where we are today without Peter and [HD Digital Radio Alliance Senior Vice President/Marketing & Communications] Diane Warren.
BB: I concur with that. As I said, to get everybody to agree on something as important as rolling out HD, forming that Alliance was a great call.

RI: What are you hearing in terms of consumer awareness?
CB:
We’re running a lot of commercials on our radio stations to promote HD Radio, and people are becoming aware of it. I have people coming up to me in the Naples/Ft. Myers market and asking how is HD Radio coming along, should I go buy one, what kind of channels do you have on your stations, do all the other stations have side channels? People are becoming more aware, and we just have to continue the effort.

RI: Do you feel that the right receivers are on the market, or is there a product vacuum somewhere?
CB:
We’re just going through the initial stage, and we have to walk before we run. I expect that there will be more choices down the road and they will be better, because technology improves.
BB: Consumer demand will evolve the needs; that is basically how retailers work their product placement.

RI: What are you hearing about negotiations with the automakers to get HD Radio receivers in new vehicles?
BB:
Peter is working diligently on that; he’s got some good opportunities for us moving forward. I was reading the other day that it’s not a long process to integrate HD into a car radio – I think it’s a chip. Auto dealers do research themselves to see if consumer demand is there, and that’s why I keep going back to education. The more consumer demand we can put on HD Radio, the more people will be asking their car dealer, "Where is my HD?" or "How can I get that?" It's a two-pronged effort: the Alliance working with the automotive dealers, and us continuing the education to the consumer.

RI: With so much going on at once — consumer education, programming, receivers — do you fear something is being overlooked?
BB:
We are just in the beginning of this, and to judge what’s lagging right now is too early. We are working on our HD2 content, on educating the public. The Alliance is trying to convince manufacturers, auto dealers, retailers. I think we’ve got a good plan, and that’s the key to success in anything. We’ll eventually get there. We’ve got a long way to go, to be very honest, but at the end of the day, you’ll have good content on HD2, the public will be educated about the quality of HD Radio, and we’ll all look back and say the Alliance did a great job.
CB: I agree. Even though we’re in the infancy stages, the important thing is to not get frustrated, and to stay the course.

RI: Caroline, can you tell me about the NAB task force you chair, and what this effort is about?
CB:
The NAB stepped up about a year ago and allocated dollars toward marketing HD Radio. We have been working in partnership with the Alliance, and the goal was to specifically target the automotive industry and to encourage automakers to include HD Radio receivers in their vehicles. We’ve been running the "fully equipped" campaign — if you don’t have HD Radio in your car, you’re not fully equipped — and the NAB has committed to several marketing initiatives. We had provisions at the New York auto show, we put ads in automotive print magazines, we had billboards throughout Detroit and we’re going to have billboards through the end of the year in the Detroit area. We put ads in the regional issue of USA Today, targeting Detroit, New York, and L.A., and we plan to be at the L.A. auto show. We just need to be out there and constantly in their face, reminding them that HD Radio is available and they need to put it in cars. I really have to commend NAB for stepping up and doing this.

RI: Do you believe that getting HD Radio receivers into new cars is the step that will take the technology to the next level?
BB:
Definitely. It will certainly help; there is no doubt about it. If people have it there, right at their finger tips just like they have regular AM and FM, there’s no doubt about it, it will help pique the availability to consumers.
CB: That does seem to be the missing link, if you will.

RI: Without getting too technical, FCC rules dictate that HD2 channels must keep their power levels below a certain limit to protect main channels. Are you hearing any complaints that power levels are a little weak right now?
CB:
I can only respond based on my own personal experience because I have an HD radio in my car. I live in Naples, and we have four FM stations that have converted to HD. They all have the side channels, and I have to tell you that every morning going into the office and coming home, I am sitting there punching those buttons. The problem that we had initially was with processing equipment; you’ve got to have good processing equipment on these channels. Once we upgraded those, it seems like there’s not the distinct difference between your main channel and your HD2 channel. That’s the only way that I can comment on that. I’m in Naples and our stations are up in Ft. Myers, so that seems to have been the difference that I have found down here, just personal experience. But that is something that I can bring up to the NAB task force.
BB: That goes back to making sure you treat your sideband channels with the same amount of passion that you treat your, for lack of a better word, main channel. We’ve told our program directors when they put a sideband channel on the air, if you wouldn’t have it on your regular channel, then we don’t want it on the air.






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