Friday, August 19, 2005
Why HD radio won't save broadcasters.
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The last, best hope for saving terrestrial radio may not be enough.By Om Malik, June 10, 2005
Terrestrial radio is under assault. The attacks are coming from all sides -- satellite radio, iPods, subscription music services, broadband radio, and podcasting. Given all that, the $20 billion a year radio industry has to reinvent itself. Fast.
So what's a radio executive to do? Industry insiders are excited about high-definition radio, which marries analog and digital signals and sends out a hybrid data stream. HD radios then decode the two types of signal and play them back as separate channels.
What makes this possible is that radio broadcasters actually own the frequencies around their stations. An operator whose station sits at 96.7 FM has control over the frequencies that spread from 96.5 to 96.9 megahertz. In HD radio, the analog signal travels over 96.7, and as many as eight additional digital signals can be sent using the 96.6- and 96.8-MHz bands.
HD technology addresses the biggest problem with modern radio: Its homogenized formats simply aren't serving the increasingly niche-ified audience. By offering more specialized formats, radio can bring back some of the listeners. A classical radio station with HD capability can promptly start offering an opera-only channel, which may attract a smaller but more lucrative listenership. Or a pop music station can launch a channel devoted exclusively to indie music. Or world music -- you get the idea. In addition, HD radio stations can dispatch real-time traffic reports, paging alerts, and even e-mails, which show up on the tiny LCD screens on HD radios. HD also sounds better than traditional analog radio and can be recorded TiVo-like for later playback.
Even with all those advantages, though, HD radio may be too late to help the industry. A recent study by TechnoMetrica Market suggests that the coveted youth audience has already abandoned traditional radio and is tuning in elsewhere. While one in nine U.S. adults listens to music online, an astonishing one in three 18- to 24-year-olds is doing it. "Listener bases appear to be shrinking," says Constantine Kambanis, an analyst at TechnoMetrica. And there's little reason to expect that trend to stop.