May 26, 2005 6:10 PM PDT
High-definition radio gears up for reality
The radio conglomerates, chipmakers and other companies behind HD radio--a digital form of broadcasting that essentially fits into the same spectrum as current analog channel--say their campaign to promote the technology is about to begin.
Boston Acoustics and other companies are expected to show off HD radios next week at the Computex trade show in Taipei. While $400 HD radios are now available in limited quantities, tabletop HD radios selling for $150 to $250 will start to appear in stores later this year.
HD radios are also heading for car dashboards. Alpine plans to come out with a car model in August.
BMW will include HD radios in its fall 2006 car lineup, said Patrick Walsh, chief financial officer of Ibiquity Digital, which licenses HD radio intellectual property to manufacturers. MP3 players and cell phones will also eventually come with HD radio embedded.
Consumers can expect to see that old radio promo--free stuff for callers--to be part of the plan. Rewards are likely to come in the form of free radios during pledge drives this fall at National Public Radio affiliates, Walsh said.
The push on HD radio is a combination of opportunity and desperation, Walsh and others concede. In HD radio, up to eight separate stations can be squeezed into the same spectrum currently allotted for a single station. As a result, broadcasters can offer multiple channels of related programming; a classical station, for instance, could dedicate channels to chamber music or opera. Ideally, this will lead to more listeners and advertisers.
"Multicasting is the killer app," said Chuck Tweedle, senior regional vice president of Bonneville's San Francisco stations. These new stations can be broadcast for free, or delivered for a nominal subscription, such as $1 a month, that would undercut satellite radio services.
As an added bonus, broadcasters don't have to terminate analog broadcasts while adding digital channels, so listeners aren't compelled to upgrade.
Texas Instruments plans to get in on the act by selling chips to power radios for the new standards, but they aren't acting out of the good of their heart.
While the average house in the United States has seven radios, traditional radio is under attack. The two major satellite services, Sirius and XM Satellite, have seen their subscriber rolls grow. XM added more than 500,000 subscribers in its recent quarter and expects to have 5.5 million by the end of the year.
"XM and Sirius are the best thing that ever happened to our company," Walsh said.
Many, meanwhile, have turned to MP3 players and Internet downloads as their source of music. Peer-to-peer radio services such as Mercora also threaten to grab listeners.
Those declining numbers can also be partly attributed to sclerotic programming too. "We took the consumer for granted more than we should have," Tweedle said.
In a rare example of cooperation, the major radio broadcasters announced support for HD radio at the Consumer Electronics Show earlier this year. The plan is to invest $250 million to upgrade 2,500 stations across North America for HD. NPR is seeking grants to allow it to upgrade 800 stations. So far, more than 300 stations have upgraded.
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