HD Radio: Could It Ever Supplant FM?

Will HD Radio someday overtake analog FM in the United States? If so, how long until most commercial FM broadcast is at least accompanied by an IBOC modulated signal? Will stations ever really start turning off their analog entirely, as originally envisioned under the "hybrid" approach to a digital radio transition?
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Will HD Radio someday overtake analog FM in the United States? If so, how long until most commercial FM broadcast is at least accompanied by an IBOC modulated signal? Will stations ever really start turning off their analog entirely, as originally envisioned under the "hybrid" approach to a digital radio transition?

We asked several engineers, station managers and suppliers and came up with an interesting divergence of views.

Doubts for some

It's hard to answer long-term questions, of course, when so many short-term questions remain. No consensus exists as to whether the IBOC FM standard will ever be implemented permanently or whether listeners will buy enough HD receivers to make business sense for radio advertisers. Those following AM developments know that implementation is still facing technical challenges that may delay AM IBOC for an unknown length of time.

"The jury's still out," said one prominent East Coast engineer in November, speaking on the condition of anonymity. "I think there's still a possibility IBOC might fail."

As of now, this source said, "The number of receivers out there is virtually nil. And if there aren't receivers, (stations) aren't going to spend the money to convert." He feels $100 is the price at which receivers should be sold.

Tim Eby, manager of Ohio State University station WOSU(FM), agrees. "Nobody's going to run out and buy a radio if it costs $350." For him, $100 is the target price point required for mass appeal.

Harris Broadcast's Manager of Marketing and Communications for radio Hal Kneller believes that 15 to 20 percent of the market must own receivers before the business models start to work; a $100 price, he said, "would be ideal" to bring consumers to that point.

Tim Bealor, vice president of RF systems for Broadcast Electronics, puts it a different way: "It's going to have to be something under a $30 premium" over current radio prices, and maybe even a little less than that.

What if enough receivers can make their way into the right hands? Even our skeptical East Coast engineer turns optimist in that scenario. Then he predicts HD Radio would supersede analog FM in about 10 years.

High-def crystal ball

Radio ownership groups have taken various positions on HD Radio. Many that support the technology are investors in Ibiquity Digital Corp. According to Bob Struble, president and CEO of the company, some owners are pursuing aggressive installation and implementation, others are waiting to see what happens. But he is certain HD Radio will someday replace analog FM broadcast in the United States.

When will we reach a point at which, for all practical purposes, every FM transmitter is running IBOC modulated? It's impossible to predict for sure, he acknowledges.

"We've been asked to evaluate. We came up with an estimate: 12 years from the time you say 'go,' which arguably was ... this year or last year. So figure 2018, or something to that effect."

He added, "That could be sooner; that could be later."

Dave Robbins, director of digital programming for Infinity Broadcasting, said, "Although we can't predict the future, we are clearly moving down the path toward digital broadcasting.

"One of the great things about HD is that it operates in tandem with analog, so that if you have an HD radio, it also picks up analog stations. There won't be a cutoff point, (as if) that's the end of this, and we're starting something new ... It's a planned transition. We're not taking any analog stations off the air ... what we're doing is putting HD transmitters right next to the analog transmitters."

Clear Channel Radio Executive Vice President of Distribution Development Jeff Littlejohn points out that with 800 million analog radios in the United States, analog FM has inertia in the market.

"I think it would be quite some time before we could even consider turning off our analog signals. We'd need to sell a lot of digital radios first."How long before that happens? "Perhaps 40 years."

Station managers interviewed for this article expect HD Radio to succeed in all markets someday, and agree that the final changeover will be more than a decade in the future.

Doug Myrland at KPBS(FM) in San Diego says, "Is it inevitable? Yes. How long before it replaces analog radio? At least a decade, if not significantly longer ... I think it is going to (have) a relatively slow start, and then toward the end of the cycle a relatively rapid final transition. The first 10, 20, 30, 40 percent of market penetration will be a long time coming, and then it will tip pretty quickly."

WOSU Station Manager Eby agress the IBOC standard will be accepted because of the way digital radio works: "The potential for broadcasters in adding more channels is tremendous." He adds that data broadcasting will be an important role for their system. But he thinks it will be more than 10 years before IBOC will dominate the FM landscape. Will the business model work?

"Down the road, absolutely. In public radio, we have a lot more good programs than channels to run them."

Trend lines

And what does the supply side say?

Among transmitter suppliers, a pattern is clear: the licensed IBOC transmitter manufacturers - Harris, Broadcast Electronics, Continental and Nautel - report that IBOC transmitter sales outpace analog sales in dollar volume and in unit sales.

Bealor of Broadcast Electronics acknowledges that putting receivers into the market is an initial challenge, but said, "Let's say that one remaining hurdle gets jumped; then, I think that, at that point, we'll still continue to operate in analog and digital simultaneously for at least the next five to eight years."

Matthew Straeb, director of business development for Continental Electronics, said, "We're selling a lot more HD transmitters than we are analog. For a small premium, (the broadcaster) is going to be able to buy HD-compatible stuff ... The pricing will become closer, and the analog transmitters will be the same price as the IBOC."

When? "It's all quantity at this point. We're still paying a lot of the development costs off. So as development costs get paid off, and we see some of the quantities go up even higher, then we'll be able to reduce the price of the transmitters."

How long has HD outpaced analog sales at Continental? "For six months, I'd say the backlog showed that ... We just basically started shipping product."

Nautel, according to Sales/Marketing Manager Jorgen Jensen, has offered advanced HD transmitters and taken orders for two years. Nautel's HD sales are now on pace with analog sales and are expected to continue to grow.

Will HD Radio signals ever be everywhere in the U.S.? "Not in my lifetime," Jensen said.

Ernie Belanger agreed: "Without a mandate to shut off analog radio or for receiver manufacturers to (stop producing) analog radios, analog will exist virtually forever," said Belanger, sales and marketing manager of Armstrong Transmitter Corp. "I don't see U.S. manufacturers offering only IBOC transmitters for 20-30 years."

The company is in the process of developing an FM HD product line, he said. "We are right on track for the second wave of implementation, which should begin in late 2006 and 2007."

Bext Inc. President and CEO Dennis Pieri thinks, "HD Radio is here, and is here to stay. But many standards are here to stay without being necessarily dominant enough to eliminate another standard... Unless something changes dramatically, analog service is not going to go anywhere anytime soon, and may be around indefinitely."

Pieri puts the company's position this way: "We are taking a prudent attitude ... we surely will start a Bext HD line the minute our customers show readiness to buy."

Asked if he believes analog FM will come to be replaced by HD Radio, Bernie Wise, president of Energy-Onix Corp., has a firm, concise answer: "Never." As for plans to offer the technology in his own transmitter products, the same answer: "Never."

But at Harris Broadcast, HD Radio transmitter sales have exceeded analog sales for the past year, Kneller said. After introducing IBOC transmitters in late 2002, deliveries were started in early 2003, and the company's forecasts are for HD to continue to outpace analog sales.

Kneller feels HD Radio will be successful in reaching critical market penetration, but he doesn't see analog being turned off for a "very, very" long time.

"I liken HD Radio to the color television transition, where it grew slowly over time, until one day you woke up, and color television was pretty pervasive."

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