Industry Pledges to Spend $200M to Promote HD Radio Alliance

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NEW YORK ( -- In a show of unity, the CEOs from eight of the top radio groups gathered today at New York’s Waldorf Astoria Hotel to launch an HD radio alliance and promote what the radio industry believes will bring it into the digital age.

Clear Channel's Mark Mays was one of eight radio industry CEOs at the Waldorf Astoria today to unveil the HD Radio Alliance.
Clear Channel’s Mark Mays and John Hogan, Infinity’s Joel Hollander, Cumulus’ Lew Dickey, Entercom’s David Field and Greater Media’s Peter Smyth were among the executives who, collectively, pledged $200 million of on-air ad time, approximately 1% of radio’s total $20 billion ad take, to promote HD digital radio. Emmis, Bonneville and Citadel are also among the consortium.

Broadcasting in HD Radio, or high-definition digital radio, improves radio’s sound quality -- FM has a CD-like sound, AM will sound more like FM. Because of the efficiency of a digital signal, HD radio allows broadcasters to split their spectrum into multiple channels. So New York’s WLTW, for example, could offer in addition to its flagship light FM format, a WLTW HD2 station that plays only love songs.

In short, the radio industry sees digital radio as a way to vastly increase its sound quality and number of formats it offers in its local markets to better handle burgeoning competition from media such as iPods and satellite. Currently 600 radio stations have upgraded their signals to HD and about 40 stations are multicasting a second channel.

The group today announced full HD rollout in the top 25 markets would begin in January. It also has created a format selection and allocation process, which will ensure there won’t suddenly be, for example, four radio stations offering a country music multicast in New York.

Reality check
HD Radio’s reality check, however, is that in order for listeners to receive HD signals they must have an HD-enabled receiver -- in other words, get a new radio. While several consumer electronics manufacturers have begun offering the feature in high-end receivers, there has so far been a dearth of mid-range and inexpensive HD radios available. In addition to a consumer push, the alliance is hoping to accelerate the rollout of HD radio among both electronics and auto manufactures. This year a pair of high-end BMW models will offer HD radio receivers as an option and more are on the way for 2007.

The HD multicast signals will initially be advertising free, although the group didn’t specify how long that period would last. Radio executives hope that by beginning to attract a consumer audience, HD radio will provide additional ad revenue opportunities, although it may be a model different than the current spot model.

“There’s no reason moving ahead that this can’t be run as ‘this hour is brought to you by,’” said Mr. Smyth.

Marketing wise, Mr. Hollander said “we’ll surprise a lot of people. … The industry is going to be very competitive. … Nobody -- whether it’s satellite or iPods -- nobody has the marketing muscle of over 10,000 radio stations.”

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