HD Radio Not Making Waves

HD Radio has been available for about four years in the United States, and is still struggling to make a dent in the marketplace. As XM Radio exceeds 9.6 million subscribers, consumer awareness of HD Radio is pathetically low.

Prices of HD-Radio-ready models are lower than $100, and some cars come with it factory- or dealer-installed. New features such as iTunes tagging that let you mark a song to download from iTunes are interesting, but still not creating a buzz.

There are almost 1,750 AM and FM stations that also broadcast an HD signal, and 800 offer separate programming on the digital side. Yet, only 300,000 HD Radio units sold in 2007, and only one million expected in 2008.

With a sound quality that is superior to analog FM and AM, why isn't HD Radio taking off?

A new report from Reuters had some quotes as to why.
"It's not a great mystery that a higher volume of radios will sell at a lower price,"
iBiquity president/CEO Bob Struble says. (iBiquity is the company responsible for HD Radio.) "We've seen this move before with consumer electronics. Think of the first DVD players for $2,000. We are following a similar path to make it happen as quickly as we can. The price point is fundamentally important."

H105kdhdr30f_mt "Programming is a regional crapshoot of varying quality," Edison VP Tom Webster says. "Building brands takes the time, resources and energy of radio's talented programmers and creative staff - but many are already programming three to five broadcast stations, so often the HD2 channel gets relegated to the back burner."
Robert Unmacht, a media consultant and radio expert with iN3 Partners in Nashville says, "The problem is that it is being rolled out as if it's a new radio invention, like FM. If there were no competition from new media, it would be fine for this to gradually phase in and replace analog radio. But with so much competition, we don't have that time to wait."

iBiquity's Struble downplays the competitive threat from Web radio. "If you take the 3 (million) to 4 million listeners of radio drive time, that would shut down a broadband network," he says. "It simply doesn't have the capacity. And if at some point the consumer is charged for the access, that spectrum is no longer free. Radio has an economically efficient pipe to distribute to a broad audience" - the airwaves.
"If HD is free and just comes with my car, then its potential exceeds the near- and mid-term potential for online radio in vehicles," Webster says. "It's easy to fall into the trap of the 'futurist' and assume free, ubiquitous Internet access will be available to all. Someday maybe, but in the intervening years, radio does have a gap - through an ever-closing window - to establish new, great digital brands that consumers will be loyal to wherever they are and whatever they are doing."

I hear promotions for HD Radio every morning. Sounds like a great thing, but I'm not actively seeking it out. Perhaps there needs to be a more compelling reason to send me out shopping. -Leslie Shapiro

Via Reuters

Image of Polk Audio i-Sonic ES2 and JVC KD-HDR30 courtesy of Crutchfield.com