You’ve probably heard that Apple’s new iPod Nano will have an FM tuner with iTunes tagging built in. Lost in radio’s coverage of the announcement was its impact on HD Radio. You may recall that in Fall 2007, iBiquity Digital announced a deal with Apple to enable iTunes tagging on HD radios.
Clear Channel, Cumulus, Cox, Entercom, and Greater Media all quickly announced that they would support tagging. You can read iBiquity’s complete explanation of the process here, and Apple’s latest explanation here.
Here’s how Wired’s Listening Post blog explained the process:
HD Radio stations send song information along with their signal; when the user hits the tag button, that information gets stored on any iPod in the receiver's iPod dock. The next time the iPod is synced with the user's iTunes collection, the tagged songs show up for purchase within iTunes.
Tagging finally gave HD Radio something quite unique. It nudged HD Radio a little closer to hip by aligning the product with the essence of hip: Apple. There was a slight problem.
For tagging to work, your iPod had to be docked in an HD Radio designed for tagging. So those who already owned an HD radio without the feature were screwed. Today, some two years after the announcement, Amazon lists only five radios capable of tagging, all pretty pricey. Don’t plan on tagging with your sub $50 Insignia.
Wired added this analysis:
I suspect that Apple created this feature with more than HD Radio in mind, and plans something along the line of Rhapsody's hardware tagging feature, which lets users tag radio songs on Sandisk and Sonos players for purchase or subscription download.
Wired was pretty close. Apple’s deal with iBiquity was just a test. They wanted a system that could sell more downloads and trump Rhapsody, and HD was the perfect guinea pig. They already had tagging on the entire iPod line. With the kinks worked out, now all they had to do was add an FM tuner to the iPod. Which they did with the new Nano.
Make no mistake. This move was not designed to help radio. It was designed to give iTunes a revenue boost. Radio stations do share in the download revenue that tagging brings to Apple, but it probably won’t be enough to reinstated the Christmas party.
The real value to radio is the acknowledgment that radio can move product. They were looking for more revenue, and they knew that the Internet couldn’t deliver. There is no other vehicle that can expose people to music like commercial terrestrial radio. The Labels and performers may have forgotten this, but Apple didn’t.
As we stated in an earlier blog, Steve Jobs needs radio more than radio needs Steve Jobs.
And HD? Apple knows how many downloads HD generated for iTunes. Maybe that’s why they didn’t bother adding an HD tuner to any of the new iPods. Today, Apple has over a 70 share of the MP3 player market. In contrast, Microsoft has a one share. We think they’ll wait to see how well Microsoft’s new Zune with an HD tuner sells.