Digital Radio Debuts
Arik Hesseldahl, 01.14.03, 10:00 AM ET
NEW YORK - At first it sounded like just another AM radio broadcast. It was a
talk station and, as usual, sounded tinny, flat and distant. It was a call-in talk
show, the type so common on AM stations today, and its sound quality
illustrated the reason why music has all but disappeared completely from the
AM dial.
Then a few seconds later, the sound quality changed. It grew depth, clarity,
bass and warmth. It sounded almost as good as an FM stereo radio
broadcast, suitable once again for music.
What changed was the signal the radio was tuned in to. It first grabbed on to
the conventional analog radio signal. A few seconds later it found a new and
better digital signal, courtesy of a new technology recently renamed HD
Radio.
HD Radio (The HD apparently stands for high definition, as in HDTV), used to
be known as IBOC, and is the brainchild of Ibiquity, a digital radio startup in
which several major media and automotive companies hold an investment
stake. Among the investors are The Walt Disney Co. (nyse: DIS - news -
people ), Clear Channel (nyse: CCU - news - people ), chipmaker Texas
Instruments ( nyse; TXN) and automaker Ford Motor (nyse: F - news - people
).
At last week's International Consumer Electronics Show in Las Vegas,
Ibiquity announced that 40 radio markets in 26 states will have HD-ready
stations early this year, including New York, Los Angeles, Chicago, San
Francisco, Dallas and Philadelphia among the larger markets. Some
stations in smaller radio markets, including Forest, Va., Price, Utah, and
White Oak, Ga., are also adding the HD signal to their towers.
Ibiquity's business plan calls for stations to make relatively small initial
investments in some new broadcasting equipment to send out the new
signal, which also improves FM signals so that they sound, as the company
says, as good as a CD. Listeners need only to have an HD-capable radio
receiver. Companies like Sanyo, JVC, and Kenwood, all of Japan, have
committed to make HD-ready receivers for both the automotive and home
market. Visteon (nyse: VC - news - people ) has committed to putting
HD-ready receivers into some car models starting with the 2004 model year.
The sound itself won't be the only thing changing. Ibiquity is working on some
interactive data services that will go with the new signal. Services like weather
information and traffic data will be displayed on the face of the radio receiver.
Ibiquity has also partnered with an outfit called Yes Networks to develop
some data-based advertising services. If you like the music you're hearing on
the radio, you might soon be able to order the CD it's on directly from an
online retailer, say, Amazon.com (nasdaq: AMZN - news - people ).
The next generation of HD Radio, which is about another year away, will give
the radio receiver a Tivo-like recording capability by adding a hard drive to the
radio. If you're a big fan of a certain talk show that you often miss, you can
program the radio to record it for you so you can listen the next time you're in
the car. In a demonstration, we also noticed that you'll be able to forward and
rewind through various segments of a show. If it's a call-in show, you'll be
able to forward through the segment for each caller, news report segments if
it's a new broadcast or various songs if it's a music show. The receiver will
also be able to keep the latest weather, traffic and news saved on the hard
drive so that you can listen to it right when you need it.
Of course HD Radio has been terrestrial radio's defense against the
onslaught of satellite-based radio services like XM Satellite Radio (nasdaq:
XMSR - news - people ) and Sirius Satellite Radio (nasdaq: SIRI - news -
people ). Both of these firms have seen their stock prices plummet in the last
year, though XM has been relatively successful by landing 360,000
subscribers. As of the end of September, Sirius had some 16,000
subscribers. But Sirius surprised many by announcing a video transmission
capability that will allow TV-like transmissions to cars via satellite.
The combination of HD Radio and the various satellite services will make
choosing a radio receiver for your car a little more complicated than it has
ever been before. Literally dozens of car stereo setups have been developed
for all three services. Few, if any will combine both satellite and HD Radio into
a single unit, at least initially. It will take a few years for HD Radio to percolate
down into the mainstream. But that will happen only if broadcasters decide
they like it and can make money off the enhanced signal and extra services.
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