HD Radio Could Cure US Broadcasters' Satellite Radio Woes, says ABI Research

Business Wire, May 22, 2006

OYSTER BAY, N.Y. -- HD Radio and HD2, also known as multicasting or supplemental audio channel broadcasting, offer a multitude of new opportunities for North American broadcasters faced with fierce competition from satellite radio. According to a recent study from ABI Research, satellite radio has gained more than nine million paying subscribers in four years, and is now putting a crunch on the traditional broadcasting market.

"Fear of satellite radio is prompting an unprecedented level of cooperation among broadcasters in their efforts to launch HD Radio and HD2," says Frank Viquez, director of ABI Research's transportation practice. Viquez adds that HD Radio multicasting is especially attractive to broadcasters because of its ability to divide the radio signal into separate audio channels, allowing new programming opportunities. "Traditionally, many stations with dual formats have been forced to split their programming according to a certain time schedule; thus HD2 offers them many new possibilities."

Switching to HD Radio digital broadcasting costs stations relatively little, often requiring minimal additional equipment, and software upgrades to existing equipment. Broadcasters are currently in an aggressive HD Radio rollout phase. One of the biggest HD2 proponents has been Clear Channel Communications, which has launched HD2 in more than 100 stations across 25 markets in less than one month. Additional broadcasters such as Beardsley Group, Emmis Communications, and Greater Media have also been introducing HD2 channels across the majority of their stations. There are currently more than 300 stations broadcasting in HD2.

Viquez observes that "While specific revenue and business models have yet to be defined, the broadcast content on HD2 will vary from station to station and by market. However, we can easily imagine broadcasters offering specialized channels that feature little or no commercial interruption, 'pay-per-listen' events such as concerts or other special events, or new formats that target a very specific demographic audience." Just bringing AM sound quality up to par with that of analog FM is, he believes, enough to open new possibilities for AM broadcasters alone.

ABI Research's recent study "Digital Radio Automotive Markets: Global Trends and Strategies for DAB/DRM, HD Radio, DMB and Satellite Radio" outlines current and planned initiatives for both satellite and terrestrial-based radio and multimedia services for each major region, and explains how they pertain to automotive markets. It forms part of the firm's subscription "Automotive Infotainment Research Service" and "Automotive Systems Research Service", which include a variety of research reports, regular market updates, forecast and industry databases, Vendor Matrices, ABI Insights, and analyst inquiry time.

Founded in 1990 and headquartered in New York, ABI Research maintains global operations supporting annual research programs, intelligence services and market reports in automotive, wireless, semiconductors, broadband, and energy. For information visit www.abiresearch.com, or call 1.516.624.2500.