The HD Radio Alliance

Today in NYC, seven of the largest radio broadcasters announced the formation of the HD Radio Alliance.

According to Radio World, the HD Radio Alliance will be run by Peter Ferrara, formerly a VP at Clear Channel.

The Alliance's major efforts will include "the coordination of formats on a new multicast channel, as well as working to secure digital automotive receiver designs and lower the price points of digital receivers."

Apparently this is a significant cooperative marketing and programming effort.  The prepared statement says that "Member companies will devote air time and dollars to promote HD Radio and the new multicast channel."

I blogged last week that November was a great month for HD Radio.  Well this announcement means that December will be even better.

This announcement is important on multiple levels:

1 - it shows that the major broadcasters are united in their effort to make HD radio work and they now have a coordinating entity in place to do that.

2 - it shows that multicasting (new free stations) are going to be the lynchpin of their marketing efforts

3 - it shows that the broadcasters are going to spend a lot of on air promotion to drive adoption of HD radios and the new multicast stations that will only be available on HD.

4 - it shows that they are also going to work agressively to get the price of HD Radios down to a mass market price and that they are going to work to get the auto manufacturers to put HD radios in cars.

That's a winning formula if you ask me.  It's taken the radio industry a while to get behind HD, but 2006 may turn out to be the year that HD Radio finally becomes real.

Comments

[Niraj]

This is good news. I'm looking forward to HD Radio. As long as the price of entry is low, no subscription fees, and there's enough programming to satisfy almost everyone, HD Radio should do well.

I was never a fan of XM or Sirius. I don't spend enough time in my car to justify a monthly subscription charge.

[sanjath]

Is there a DVR like thing for radio? I have not used satellite radio, so I dont know if it is already there in some form. If recording using some program guide (is there a single source like TV guide?) is facilitated, then it would make good sense.

[xm investor]

The XM2Go line has 5 hours of programmable time shifting.

HD will not have 'enough programming to satisfy everyone.' XM and Sirius have HUNDREDS of channels and still some people are not satisfied. While IMO the XM programming is excellent, it does have some niches uncovered.

And satellite aggregates the national market for reggae, latin jazz, americana, etc. An HD station has to sell ads to justify its programming and staffing costs, but is splintering the much smaller local pool of listeners even more.

Fred, this is a nice blog and you appear to be reasonably intelligent and obviously successful, but the HD business model just doesn't make sense:

1. XM's SAC is in the 50s. SIRI's is in the hundreds. And they've been around for a while, and they have a huge subscription revenue source. WHO will pay the CASH to get the HD radios down to prices that consumers are willing to pay? XM's entry level radio probably carries a direct $20-$30 subsidy, and they've been on the air for a while.

2. Can't get into the dashboards. The OEMs are paid to install satellite and they get a revenue share. Why would they want to install HD?

3. Even in the biggest radio market in the country, New York, NO ONE can make a go of country music in ANY format. Meaning, not enough listeners to justify ad cards that make a reasonable ROR. But suddenly a country station in that market will be profitable, where it can serve only a super-tiny portion of the same listeners? Meanwhile, for $13 a month, XM offers seven commercial free, well programmed stations in their country "neighborhood."

4. Do you listen to radio? Doesn't look like it by the looks of this and your other blog. Don't blame you. Too many ads. You must not like ads. Neither does anyone else. Which is why HD is doomed. Because in the end, it HAS to be supported by advertising. Lots of it. And it's just not what people want.