$200 million for promoting HD Radio

The HD Radio Alliance, which is the broadcast radio industry's coalition to promote HD Radio, announced yesterday that they will spend $200 million this year in advertising on 250 radio stations in 12 major markets to educate consumers on the value of HD Radio.

Peter Ferrara, CEO of the HD Radio Alliance, pointed to broad support from "from receiver manufacturers, retailers and automakers," whose cooperation is crucial to the roll-out of the new product.

Bob Struble, CEO of iBiquity, the developer of HD Radio (and a company that I am an investor in and on the board of) is quoted in the article linked above as forecasting "HD radios costing less than $100 in the near future".

I've been saying this for a while now.  HD Radio is gaining momentum.  The two big things that have to happen is consumer education and low cost radios in the market.  It looks like both are going to happen in 2006.

Comments

[jackson]

Heard one yesterday on the classic rock station in DC.

[Ian Bell]

I am glad to see this gaining momentum as well. While satellite radio is good, having your local stations broadcast at this level of quality will probably steal some thunder away from satellite.

Digital Radio has been big in the UK and most major manufacturers are already making hardware for that market, so it should not be too tough to make a switch to the U.S. although the technologies are not quite identical.

[Erik Schwartz]

I question whether HD radio really addresses the real problems that afflict traditional radio.

Consumer acceptance of MP3's have proven that sound quality isn't the real issue. The problems lie in too few organizations controlling too many stations on the dial. Does not HD just subdivide the available frequencies? Are frequencies going to be allocated to new entities? I'm not sure how having 24 crappy Clearchannel stations in a market is such a big improvement over having 5 crappy Clearchannel stations...

You want to fix radio, fix the idiotic ways that they do music research. Call out testing? Auditorium tests? Please...

[Jim Griffin]

It's all about the network value: HD Radio is worth the number of users squared.

And in this case, that means HD Radio has little value: The number of listeners cannot be greater than 10,000 nationwide, and I'll bet it's half or less than that, based on the number of radios sold, many of which are not multicast enabled.

The third comment, Erik's, is spot on: HD Radio was designed to defend incumbents' positions, not shake up this stale medium.

Who believes the iBiquity pronouncements? The long-promised Radiosophy is still not shipping, admitting this week on its web site that they still do not have a successful implementation (or a ship date).

Sub-$100 radios this year? If so, they won't be standalone portable radios, if they will exist at all. Even the $300 Boston Acoustics HD Receptor models are getting bad reviews.

Bottom-line: I have an HD Radio in my car along with a Sirius satellite radio, and I almost never turn on the HD Radio. When I do, it is hard to tell if there are multicast stations, and the digital carrier fades in and out, even in urban areas, bringing with it an 8-second time mash-up that renders it counterproductive. When it works right, the sound is better, but not at all impressive in a way the differentiates the medium.

By contrast, what is happening on satellite is fascinating, an exercise in community building. The broadcasters are having fun, speaking as do real people (no FCC threats) and the medium is truly enabling, allowing artists like Scott Ferrall and others to exhibit their true talent.

Furthermore, I know no one else who owns an HD Radio, and I work as a media technologist. Even those I know in the radio business do not own or use an HD Radio. When I ask people about HD Radio, they invariably think I am asking about satellite.

Fred, I have deep respect for you, but this is an investment that needs a kick in the ass, not a pat on the back.