Radio Giant Pitches Buyers On High Def

On Oct. 25th, in a dining room surrounded by life-size cardboard cartoons of Elvis, Orson Welles, and Sean Hannity, a panel of radio execs assembled by Interep heralded the arrival of High Definition (HD) radio, a new digital format promised to open a new era in radio advertising. HD radio responds to American demand for personalized media that engages viewers with extra information and new options, the execs told the New York Advertising Club audience--thus securing a place for "trusty old radio" in the pantheon of new media.

"Digital brings a couple things: better quality, more choice, and more interactivity," according to Bob Struble, CEO of iBiquity. "The demand of up-and-coming consumers--the 'digital kids'--is 'what I want, where I want it, when I want it, how I want it.' You simply can't respond to that with AM technology, but with digital you will be able to."

Arriving on the heels of other new radio technology-based brands like satellite, HD radio boasts the main advantage of traditional radio--it's free, after you buy the new HD set--plus the myriad benefits of subscription satellite, including CD-quality sound, digital display of product information like singer, album, and song names, as well as accessories like album art (and easy online ordering) through the same display. Also promising are TiVo-like control of the content--rewind, pause, and record functions--and the patch-in of useful information like maps, traffic reports, and store locations for HD-equipped cars.



One obvious route to personalizing HD radio is multicasting channels devoted to different genres and sub-genres of music, talk, and other content. This allows not only more individual choice within broad categories like rock, country, and hip-hop, but also the introduction of new genres to markets where the existing AM stations couldn't risk innovating. "As a radio company, you're always being passed by content providers," said Scott Herman, Executive VP, Infinity Broadcasting. "With HD you can have books on audio, for example, that you listen to driving. The possibilities are really endless."

The industry seems to be eagerly taking to the new technology. "We announced a deal in January in which 22 of the top 25 [radio] groups agreed to an accelerated rollout of the technology," Struble noted, with 2,052 stations already broadcasting in HD format. On the broadcasting side, Herman confirmed that "by the end of 2005, we will have 50 of our 187 channels 'lit up' on HD, and by the end of 2006, we'll probably be closer to 75 or 100 channels. It's quite a lot of cost for a radio station to do this, but we figure it's the way we'll compete in the future." As for quality, Herman raved: "All three [HD channels] sound much better than the original one--it makes AM sound like FM, and it makes FM radio sound like CD quality."

One persistent worry reflected in both the panel discussion and audience questions was the danger that HD radio may simply fragment the existing radio market into smaller, less accessible, and less quantifiable target groups. While acknowledging that this was a concern among industry leaders, Struble was sanguine: "You just have to realize we have an 'installed base' of 200 million people [already listening to radio], and then a position in the dashboard of every single car. Once that infrastructure is in place, we'll be able to figure out all kinds of opportunities."

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