• by Erik Sass  @eriksass1, August 12, 2010

After a gradual start, HD digital radio is poised for rapid growth over the next few years, according to a new forecast from ABI Research -- with much of the increase coming abroad, especially in Europe, where various governments have established HD radio as the national standard. Growth will also be driven by the inclusion of digital receivers in smartphones.

As of 2010, U.S. consumers have purchased 4 million HD radio sets, while European consumers -- led by the U.K. -- have purchased about 13.5 million, ABI expects the global "installed base" of HD radio receivers to jump to 200 million by 2015, a more than tenfold increase in just five years. That's a cumulative annual growth rate of just over 60%.

ABI Research noted that many manufacturers are going to begin including HD digital radio receivers in smartphones in response to growing concern about the large amount of mobile bandwidth currently used by smartphone owners accessing Internet audio sites like Pandora.

Carriers are expected to begin promoting digital radio as a way for smartphone owners to get premium audio content without taxing data delivery. (HD radio is touted for its CD-quality sound.) ABI Research senior analyst Sam Rosen cited "AT&T's decision to stop offering unlimited data plans, due largely to high data usage in New York and San Francisco" generated by Internet music sites.

The forecast of big growth in HD digital radio is good news for traditional (terrestrial) radio broadcasters. They have rolled out HD channels in most large- and mid-sized media markets in the face of increasing competition from new digital audio options, including satellite radio and pure-play Internet radio.

Radio broadcasters also got another bit of good news in a separate study from Harker Research, which found that digital alternatives have failed to make a big dent in local broadcast radio listening.

Harker's analysis of 61 markets (distributed among Arbitron PPM markets, Arbitron diary markets, and Nielsen diary markets) shows that Americans continue to listen to local broadcast radio stations in record numbers.

Comparing listening patterns from spring 2009 to spring 2010, Harker found that the proportion of the U.S. population that is listening to broadcast radio actually grew from 91.4% to 93% over that period. Average weekly listening dipped about 1%, or 11 minutes, to 17.4 hours per week.