WSJ: HD Radio's Prospects May Improve
January 9, 2008 at 5:30 AM (PT)
Radio has spent years of effort and hundreds of millions of dollars to move into digital broadcasting as HD Radio, but few have noticed as the medium has been overshadowed by satellite radio, writes THE WALL STREET JOURNAL. That could change this year, its backers say, helped by several developments: new support from FORD MOTOR CO. (NET NEWS 1/7) and other car makers, receivers priced below $100 and new features such as the ability to tag songs you hear on the air for download later onto APPLE's IPODS.
Last year was really a breakthrough... and we see that continuing to accelerate.
The name "HD" is a marketing misnomer. The HD in HD Radio doesn't stand for "high definition" -- it is a brand name piggybacking on the popularity of HD TV. Like satellite radio, HD Radio promises static-free reception and more programming for people who buy new radio receivers. HD Radio takes up less bandwidth, so broadcasters can squeeze two or more channels of programming into a single frequency. Unlike satellite, HD Radio is free.
Getting HD Radio right is crucial for broadcasters. The industry is pinning hopes on HD Radio and an increasing presence on the Internet to reverse declines in listener numbers and perk up annual revenue, which has essentially been stuck at around the $20 billion mark for several years.
Skepticism over HD Radio remains high. The question lingers as to whether HD Radio will become as prevalent as high-definition televisions, or will be confined to the digital-technology remainder bin. HD Radio gained traction last year. Most areas in the U.S. have at least one radio station broadcasting digitally, and HD radio receivers are starting to sell at popular retailers including WAL-MART STORES INC. BMW AG and other auto makers are installing HD Radio receivers in new cars.
Last year "was really a breakthrough... and we see that continuing to accelerate," said IBIQUITY DIGITAL Pres./CEO ROBERT STRUBLE.
"I am excited about the continued positive momentum HD Radio is generating," added CLEAR CHANNEL RADIO CEO JOHN HOGAN.
One of the more promising features is ITUNES "tagging." Consumers with enabled devices can hear a song they like on the radio and press a button to mark the song for purchase later. The person can then download and buy the song from APPLE's ITUNES music service. The radio broadcaster receives a slice of the revenue from ITUNES sales. Broadcasters, as well as satellite-radio companies, are using advanced features as a selling point, as the audio quality of digital radio has grown less important to prospective buyers.