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Open Mic: Inside the HD Digital Radio Alliance

Open Mic: Inside the HD Digital Radio Alliance

Feb 1, 2006 12:00 PM

After the CES convention, Radio magazine talked to Peter Ferrara, president of the HD Digital Radio Alliance, about the new group’s plans.

Radio: The founding radio groups have committed more than $200 million of on-air inventory to promoting HD Radio. What other advertising is going to be used to promote HD Radio to consumers?

PF: I’m not sure that the Alliance will utilize other media directly, although I think that as we move forward in connection with our retail and automotive partners’ advertising, HD Radio will take a presence in that. But for us, radio reaches 96 percent of all Americans every week. I don’t really think that we need anything more that has the kind of reach or marketability like our own medium.

Think of it this way: of those other people buy our time to promote their products. We will promote radio on the radio to people listening to radio. It doesn’t get much better than that.

Radio: There are concerns that the Alliance is involved in unfair practices by assigning formats to stations. What’s really happening?

PF: We want the owners [to join this effort]. This is not an exclusive club. We have everyone in here from the size of CBS and Clear Channel down to two markets for ABC and an independent owner in Philadelphia. The Alliance is open to anyone and everyone who wants to step up to participate in this. And they all should. This is an industry effort. This is not an individual company effort. That’s why it exists.

Radio: Are there established deadlines for the Alliance’s goals?

PF: I don’t think that deadlines would be appropriate. It’s very difficult with a new technology and the adoption of a new technology to set a definitive line and say that by x date we want to accomplish y.

We have a four-prong strategy. The first part is that we have to work with the receiver manufacturers to help them get into the game and develop a radio that is available at a lower price point that will appeal to a broader audience base. The second part is to establish and work in the retail channel. We have to find ways to get these radios on the store shelves in large quantities and in ways that the consumer has easy access to. Right now that does not exist. The third part is the OEM and automotive sector. This is vitally important to the success of HD Radio.

The last part — and arguably the most important — is raising consumer awareness and ultimately consumer demand for HD Radio. That’s the real driver of this.

I said to a number of people at CES that it’s interesting that the broadcast industry is doing this, because the broadcast industry is the last beneficiary of getting HD Radio into the hands of the consumers. It’s the ultimate beneficiary, but the chip makers, the receiver manufacturers, the retailers and the automotive industry will make money before we do. This is a real push for the radio industry to be on a side of the business that is really not our business. If we don’t take this approach it’s just not going to happen fast enough.