For now, it’s analog driving HD success.

Story by Inside Radio

A growing number of operators are going old school to monetize their investments in HD Radio. The number of analog FM translators rebroadcasting HD side channels is growing steadily. And those with decent coverage areas and a well-programmed format that fills a market hole are racking up sometimes extraordinary ratings. But monetizing those numbers can take some work.

Cromwell Group’s two year-old urban AC “Magic 98.1” WYDS-HD2, Decatur, IL has become the poster child of radio’s translator movement. With a 12+ share of 7.8 in the latest Arbitron survey, it ranked third among 11 in-market signals. It’s not alone. An urban-formatted Cox Media Group HD-fed translator is tied for No. 1 in 18-34 in Jacksonville. Comedy is pulling a two share or better in Austin and Denver, while alternative is grabbing at least a one-share in Cincinnati, Cleveland and Raleigh on HD-translator hook ups. Cromwell CEO Bud Walters says the success of “Magic 98.1” has allowed him to recoup his HD Radio investment and turn a profit. “We would have no revenue without the translator,” Cromwell regional manager Chris Bullock says of the simulcast. “The majority of listening is on 98.1.”

While not as wildly successful, Lincoln Financial Media posted a 2.3 with Denver’s “Comedy 103.1,” which launched last October from the HD2 channel of country KYGO (98.5). “We’ve been growing every month in billing and ratings,” SVP/GM Bob Call says. “It’s going to be a nice addition to our cluster.”

With the FCC expected to soon grant more than 1,000 new translator applications, the trend is likely to grow. Earlier this month at the NAB Show in Las Vegas, iBiquity director of U.S. broadcast sales Rick Greenhut says he met with numerous broadcasters buying or leasing translators, interested in retransmitting HD side channels.

For HD-fed translators, how to identify the station can be a barrier to monetization. Arbitron lists it as KYGO-F2. Some buying systems identify it as NYGO or UYGO. Engineers may call it KYGO-HD2. To listeners it’s just “Comedy 103.1.” But many ad agency buyers don’t know what to make of it.

Operators say the branding conundrum that dates back to the inception of HD side channels has become one of the biggest obstacles to monetizing HD-fed translators. Call says “there is an enormous learning curve at the agency level on what they’re seeing, what it means and how it’s different from KYGO” — you know, that Denver country station at 98.5.

Other operators report similar obstacles. “One of the difficulties we face is the buying software ad agencies utilize wasn’t equipped to buy an HD2,” Bullock says. “Even our own traffic software wasn’t equipped to do anything other than AM and FM.”

Despite encouraging ratings, Call says “Comedy 103.1” isn’t converting ratings to revenue on a one-to-one basis because of the branding issue and because comedy is a new format that requires explaining to advertisers. He and others say that Arbitron and rep firm Katz Radio Group have been helpful in explaining to agencies and advertisers that an HD multicast-fed translator actually looks, smells and acts like a real radio station. In fact, HD2 stations can be a just what some marketers are after.

When Anheuser Busch told its local radio sales rep it wanted to “own” something to market its new light beer, CBS Radio-Houston came back with something they couldn’t refuse: their own radio station. CBS wove the new beer brand directly into the name for its new Electronic Dance Music station, an HD2 channel to CHR “Hot 95.7” KKHH. When the station streams from Radio.com, the player reads: “Energy 95-7 HD-2: Houston’s Only Dance Station Powered By Bud Light Platinum — Every Night Has Potential.”

The sponsorship launched last June during a kickoff party at Houston Pride Week, where the station handed out Energy 95-7 — Bud Light Platinum bandanas. The broadcaster generated $10,000 from the launch party and $5,000 a month for the steaming player, CBS Radio Houston director of integrated marketing & events Michelle Giroir said during a presentation at the NAB Show earlier this month. The beermaker also received promos on “Hot 95.7” promoting the new HD2 station and stream.

The partnership shows a translator isn’t necessary to derive revenue from HD Radio. “Energy 95-7” carries a spotload, something iBiquity director of U.S. broadcast sales Rick Greenhut says he’s hearing more of on HD multicast channels. He sees HD as offering a digital advertising solution, one that combines a visual call to action, a web stream and banners ads — in addition to audio spots.

For some operators, leasing a side channel to a third party has tapped a new revenue stream. “The long-term payout will be when HD penetration rises,” Call says. “I believe there is a future for HD, maybe not the way we all intended it to be, but in terms of a lot of features we can add to the listening experience, especially in the car.”