LAS VEGAS Now that HD Radios are in the marketplace, Americans can go into stores and compare for themselves between analog vs. digital, and terrestrial digital vs. satellite.
While satellite radios have appeared in special kiosks in many consumer electronics stores, retailers indicate they will place HD Radios on their so-called “big board,” the wall of radios in each store, making it easier for the buyer to compare analog to digital.
Besides the promise of better audio, HD Radio proponents are banking on the words “no monthly payments” to motivate consumers.
Naysayers feel the rollout may be too late, that XM and Sirius Satellite Radio have gained a consumer foothold that will only keep growing. As the satcasters add services, they give listeners fewer reasons to go back to terrestrial radio, according to some industry experts interviewed for this article. The satellite companies’ plans to add local traffic and weather to their offerings fuel this point of view.
Certainly the list of markets for which XM intends to create traffic channels is like a blueprint of the markets receiver companies told Ibiquity to target in its rollout. Criteria for those rollout markets included radio audience size, long commutes and previous high sales figures for consumer electronics.
Ibiquity’s original targeted markets are New York, Los Angeles, Chicago, San Francisco, Miami and Seattle, followed by Atlanta, Boston, Dallas, Denver and Detroit. Stations have licensed Ibiquity’s technology in more than 100 markets.
XM debuted its dedicated traffic channels for these cities on March 1: New York, Los Angeles, Washington, Dallas-Ft. Worth, Chicago, Houston, Detroit, Philadelphia, Phoenix, San Francisco, Tampa-St. Petersburg, Orlando, Baltimore, Pittsburgh and St. Louis.
Dedicated channels for Boston, Atlanta, Miami-Ft. Lauderdale, Minneapolis-St. Paul, Seattle and San Diego are to be introduced by the end of the year.
Ibiquity Digital Corp. President/CEO Robert Struble is unfazed by the satcasters’ plans.
“We knew that was coming. Satellite radio is here to stay,” he said. “Nobody is saying now, as they did a few years ago, ‘Satellite radio is not going to work.'”
HD Radio is part of terrestrial broadcasters’ solution, he said. Just as satcasters are focused on building subscriber numbers, Ibiquity is focused on advancing station conversions.
“Once you see product shipping, that says to a lot of manufacturers, ‘This is real.'”
Ibiquity spokesman David Salemi said 80 percent of drivers listen to local stations, and they want to hear local personalities.
Several high-level broadcast engineers involved in the industry’s decisions about adopting digital radio echoed this sentiment, noting that the satcasters’ programming strategies to limit commercials, boost audio quality and offer local traffic and weather still result in a product lacking localism.
“Traffic and weather is not the start and finish of localism,” said one head of engineering for a prominent radio group. “I am not convinced they can do as good a job as terrestrial guys.”
“The market for satellite radio is projected to reach only 20 to 30 million total, after many years,” said Mike Starling, NPR’s vice president for engineering and operations. “So, even at that future date, the other 90 percent of Americans will still be getting radio through their local stations, most of which will be operating in HD Radio long before satellite radio hits 10 percent penetration.”
Another source, the head of engineering for a prominent radio group, said that although terrestrial radio’s digital rollout is lagging due to the earlier codec problem, XM and Sirius are “forging some territory and terrestrial radio will be able to learn from their mistakes.”
This engineer thinks price will be a motivator for consumers to buy HD Radios.
“The general population is not used to paying beyond the purchase price for most entertainment,” the engineer said. “That’s going to be a real factor as HD Radios come on the market. The one-time purchase price will be a selling point.”
Still another engineer involved in the HD Radio rollout from the manufacturing side said terrestrial radio would do well to pay attention to the satellite companies’ limited use of commercials.
“The HD Radio rollout is happening as fast as it possibly can. We need to make this happen or we’ll be left in the dust.”
The news that satcasters plan to offer regionalized traffic and weather “will cause stations to clean up their act” as far as audio quality and commercial stop-set length, he predicted. “The days of long commercial stopsets are over.”
HD Radio supporters said they will take note of the “churn rate” for satellite radio. How will new drivers react when faced with paying for their subscriptions, something they may not have noticed bundled into their new car payments at first?
The satellite companies have said their churn rate so far is miniscule.
Terrestrial digital radio proponents are bullish, having invested years of time and money on the concept. They believe Americans will buy the new radios to gain better audio quality and for the telematics conveniences promised to stations. Several of those advances were demonstrated at this winter’s CES convention, including traffic and weather with and without navigation systems, surround sound and the supplemental audio concept.
The debut of the first HD Radios has been a long time coming, although consumers won’t necessarily care about past delays. After more than 11 years in development and a roughly six-month delay due to the codec quality issue, the first aftermarket HD Radios are on store shelves. Kenwood shipped product to retailers in January; JVC and Panasonic planned to ship home and aftermarket units this spring.
Kenwood also is working on a combined in-dash unit for HD Radio and Sirius, to ship this fall. By then, the industry also may see HD Radios in 2005 model cars.
Nearly 300 stations have licensed technology from Ibiquity Digital to use the HD Radio technology, according to the company; approximately 75 of those are actually believed to be on-air with a digital signal.
Two stations timed their HD Radio conversion to coincide with the CES convention.
The first HD Radio purchased by a consumer sold in January to a 25-year-old in Cedar Rapids, Iowa. Nathan Franzen bought a Kenwood KTC-HR100 HD Radio tuner from the Ultimate Electronics store. He had it installed in his 2001 Pontiac Grand Prix. Franzen then tuned to Iowa Corp. station KZIA(FM), which has converted to digital.
Beasley Broadcast Group’s Las Vegas radio station KSTJ(FM) converted before the show, saying it was the first to use datacasting for navigational purposes. KSTJ also ran live audio and traffic data through a Broadcast Electronics HD Radio transmitter.
The station is sending its digital signal into a Shively antenna, separate from the analog signal and antenna. The station is broadcasting HD Radio under experimental FCC authorization, pending the agency’s rulemaking on the use of separate antennas for digital service.
Meanwhile, last summer’s codec problems seem to be moot as HD Radio supporters push forward with the rollout. In discussions with manufacturers, “The codec does not come up anymore,” said Struble, since Ibiquity switched to its new, proprietary HDC codec.
At CES, FCC Chairman Michael Powell was bullish on digital radio. The chairman, Commissioner Jonathan Adelstein and several agency staffers toured Ibiquity Digital and XM Satellite Radio booths on the exhibit floor.
Powell told Radio World he believes Ibiquity’s technology is sound and it’s good for consumers, although he added, “We’ll see what consumers embrace” of all the digital radio technologies.
The challenge for broadcasters, he said during a panel discussion with Consumer Electronics Association President/CEO Gary Shapiro, “is to migrate so that at least your product can be distributed in a digital form that will at least have the potential for interactivity, dynamic selection” and greater capacity.
“But you still have to use the raw materials to go into the digital future or you’re going to end up in the ashbin.”
For radio, he said, “Staying where they are is absolutely no solution for the future.”