Digital radio still hard to hear
Broadcasters eagerly jump on the digital-radio bandwagon. But radio releases are being delayed, and few people can listen today. Photos: HD radios
The problem is, hardly anyone can. More than 570 stations around the county are now broadcasting in the new digital radio format, but only a relative handful of actual digital radio receivers have been sold, or are even available to consumers who want to buy them.
With competitive pressures growing from satellite radio and the iPod, radio companies had hoped that this year's shopping season would finally see a significant number of high-definition radios hitting the market. But several major manufacturers have pushed back releases until 2006, likely dooming these hopes.
What's new:
Critical manufacturers say they won't have many new digital radios ready for the 2005 holiday shopping season.
Bottom line:
Broadcasters are rushing into HD Radio to compete with the growth in satellite radio and iPod listening, but the radios themselves have barely hit the market.
"We are seeing a month-or-two slippage, which is not uncommon with new technologies," said Robert Struble, chief executive officer of Ibiquity, the company that created the standard HD radio technology. "But we're talking about a fundamental change to radio, not just about one shopping season. It's better to get something out right."
The release of digital radio is widely viewed inside the broadcast radio industry as a critical response to other digital technologies, which are capturing a growing share of radio listeners' attention.
The defection of key radio personalities such as Howard Stern to satellite radio over the past year has focused broadcasters' attention on the competitive threat. The number of stations broadcasting in the new HD radio digital format, about 100 at the beginning of the year, is expected to reach 600 by the end of 2005.
That still leaves a long way to go to reach the 13,000 total stations in the country, but all the big chains have committed to transitioning most of their stations over the next two years. Backers note that 60 percent of the country's citizens already live within range of an HD signal.
"HD Radio is vital to the future of radio broadcasting," said Caroline Beasely, chief financial officer for the Beasely Broadcast Group, a company with 41 stations around the country. "It will keep radio relevant, and you can't overstate how important that is to our medium."
The technology essentially does for AM and FM radio what digital, high-definition television does for TV. The quality of the broadcast goes up substantially, eliminating static and providing near-CD quality richness of sound.
The Ibiquity-produced HD Radio technology standard also allows stations to broadcast at least two audio streams over the air, as well as several data feeds such as news headlines or traffic reports, over the same space ordinarily used for one traditional radio broadcast.
About 40 stations around the country are already using this "multicast" facility, often to supplement their existing music station with another stream of up-and-coming artists, or a related genre.
But on the street, that progress is less apparent.
Jack Chew, sales manager at Bay City Stereo in San Francisco, says he isn't selling any HD units yet and few people--"maybe one in 200," he said--are even asking about the technology. His company has been told by manufacturers that products will mostly be pushed back until next year, he said.
Building as fast as they can
The urgency in the broadcast world has drawn response from device manufacturers, but the process has been slower then radio stations would have liked.
A handful of high-end manufacturers, including Boston Acoustics, Polk Audio and Radiosophy have announced tabletop or other home receivers as well. Several of these companies are finding that production difficulties associated with a brand-new technology--some cite software interoperability glitches, while others note difficulty in obtaining components from China, for example--are pushing back widespread release of receivers to the retail market until 2006.
Polk Audio says its HD Radio devices, which will also play DVDs, will reach the market in March. Radiosophy CEO Richard Skeie said his company will have some product on the market by December, but only existing orders will be filled this year.
"We don't want HD to fall on its face because we rushed it," Skeie said. "We're all making sure that we don't have to take a step backwards when we ship. We're feeling as much pain as (broadcasters) are."
A Boston Acoustics spokeswoman said her company's high-end device would reach retail shelves, and be available for radio station giveaways, by Thanksgiving.
Analysts say the technology is stuck in a classic "chicken or the egg" dilemma. Radio stations need the technology to compete with their new rivals, but they want to make sure listeners will be there before investing large amounts of money. Listeners, meanwhile, are barely aware of the technology and are unlikely to buy new high-end devices without large amounts of available content.
The high cost of HD radios--$269 for Radiosophy's desktop player, and $499 for Boston Acoustics' radio--is also likely to keep most listeners away from the medium for a few years, until production costs can be lowered, analysts say.
The Gartner research firm predicts that about 1 million people will be listening to HD Radio by the end of 2006, rising to about 10 million by 2009. The firm said that about 92,000 HD receivers would be in the market by the end of this year.
In a sobering note for broadcasters, the research group also predicts that satellite radio will have more than 26 million subscribers at the end of that same time frame.
"In terms of getting a signal out there, a lot of stations have now done that," said Gartner analyst Laura Behrens. "Unless you can give them radios to put in people's hands, they have done what they can do."
Radio giants say they aren't worried about satellite in the long term, however.
"Satellite is targeting a narrow niche market," said Dave Robbins, director of digital programming for the Infinity radio chain. "There will always be a place for people who want to pay for radio, but for the most part the free FM option is the way that listeners want to go, as long as it is digital quality."