Radio's Death is Greatly Exaggerated
OM Malik calls the cover article about radio in last week's Barron's "fascinating". What I find fascinating is how a business paper could do a major think piece on the radio business and miss completely the next big thing in radio, called HD Radio.
HD Radio is the answer to the very problems that Barron's calls out in its story. Digital broadcasting will make the radio industry a supplier of music and music programming to the iPod. I suspect that every digital music player in five years or less will have a HD Radio chip in it.
Musical choice is a problem in the radio industry, but HD radio will allow each FM station to broadcast as many as six or seven audio streams on a single channel if the market will support that much programming. That's potentially more channels in any given market than satellite offers on its entire system today.
Almost every major publicly traded radio group has announced big station conversions this summer. Most groups are announcing plans to convert up to 80% of their stations to HD within the next 3-5 years.
And yet Barrons missed this story completely. I hope all the radio investors out there don't miss it too.