• by Erik Sass  @eriksass1, January 9, 2007

Microsoft's MSN Direct, which delivers Internet content to mobile devices and consumer appliances, is joining forces with Clear Channel's high-def digital radio. The announcement was made Monday at the International Consumer Electronics Shows in Las Vegas. Although the flow of information will remain one-way for now, from broadcaster to consumer, the MSN platform could provide an entrée to interactive functionality. It may soon allow listeners to respond to ads displayed on the digital display of their HD sets, with the addition of a back-channel component like a cell phone.

The new service, called MSN Direct HD, will deliver a variety of data to HD radio sets--including updates on traffic, weather, sports and stocks as well as original content specific to Clear Channel Radio, according to Jeff Littlejohn, Clear Channel's executive vice president for distribution development. Because the collaboration is in its early stages, the exact nature of the content has yet to be determined, Littlejohn said.

Also undecided is how it will be monetized.

The existing MSN Direct service delivered to "smart watches" is subscription-based. But Littlejohn said the HD radio side "could be a subscription service, it could be an advertising-supported service, or it could be a combination of the two. We have a very good history of selling advertising as a way of monetizing something."

In comments made in 2006 Bob Struble, the CEO of iBiquity Digital Corporation, which owns HD radio technology, touted the ability of HD sets to deliver text and even video advertising, including direct-response promotions, such as offers from local retailers. Littlejohn agreed that direct-response promotions were possible, but noted that listeners would require a cell phone or some other back-channel device to respond, as HD sets don't yet have that capability.

While that method may be less elegant than direct response via the HD set, a simultaneous joint announcement by Microsoft and Ford promising to streamline cell phone use in cars could make things simpler.

Ford is installing a Microsoft-based system called Sync in 12 of its 2008 models, which will allow users to control cell phones and MP3 players with voice commands delivered via Bluetooth. The system will eventually be available in all Ford cars.

Looking to the future, iBiquity's Struble has also spoken seriously of including "buy buttons" in digital radio sets, allowing advertisers to establish causal links between ads and purchases.