Top Radio Group Owners Band Together to Promote HD Radio

The “charter” members of the so-called HD Digital Radio Alliance have agreed to commit $200 million worth of air time and cash “inventory” in 2006 to promote HD radio and its new “HD2” multicast channels, reporters were told. Alliance members include Bonneville, Citadel, Clear Channel, Cumulus, Emmis, Entercom, Greater Media and Infinity. They said they would work to secure automotive design wins to reduce receiver price points and jointly market the technology with receiver makers and CE retailers. Alliance membership is open to all U.S.-based radio companies, but not CE makers or others. Companies must pay membership dues to join, but executives wouldn’t give specifics.

Most Alliance members already have made “a big technological investments in our plants that will enable us to broadcast in HD digital radio,” said Clear Channel CEO Mark Mays: “We're very proud of those investments we've made to date. However, what we realized is that we need to do more than just technically make our plants able to broadcast in HD digital radio.” Mays said “first and foremost” among the Alliance’s goals will be to promote the debut early next year of HD2 multicast programming in major markets. HD2 programming will be “diverse” and “very compelling from the consumer perspective,” Mays said. Moreover, HD2 “in the short term” will be free of commercials and subscription requirements, he said. But Alliance members turned aside suggestions HD2 multicasts would compete directly against satellite radio. Satellite radio is but one potential competitor; others include MP3 players and the Internet and other entertainment and information sources that take people away from radio.

Infinity Bcstg. CEO Joel Hollander said the Alliance would move ahead with “an aggressive rollout schedule,” including announcements early in 2006 of the first specific HD2 programming line-ups in the top 25 markets. To be announced around that same time will be details of a nationwide consumer marketing campaign, Hollander said. In the campaign, he said, radio will market itself in “fresh, smart and new ways that will surprise a lot of people and competitors.”

Peter Ferrara, a former Clear Channel executive named CEO of the Alliance, said the consortium was studying “some very new and compelling programming” for its HD2 formats. Formats being evaluated include female-oriented talk, Hispanic, love songs, comedy, headline news, classical, pop, jazz, blues, ballads and others. Ferrara said members have agreed on a fair framework to diversify HD2 programming to avoid duplication of programming within a market.

Ferrara called for cooperation from receiver makers and CE retailers. “While a lot has been done to date” to support the commercialization of HD Radio, “we really believe we need to do a lot more sooner and faster,” he said. “We're going to put the marketing muscle of these companies and this industry behind HD Radio,” and the partnership of the CE industry and automotive OEMs will be crucial toward a successful effort, Ferrara said.

Ferrara and others sidestepped our questions about how the effort might increase the number of HD Radio stations operating next year. They referred those questions to iBiquity Digital CEO Bob Struble, who attended the news briefing but didn’t participate. Struble said 600 stations are on the air with HD Radio, and it’s predicted that count will double within a year.

Responding to a questioner, Greater Media CEO Peter Smyth said the Alliance hopes all radio group owners ultimately will join. But with the radio industry so “fragmented,” the plan was to begin with a “core” of major members. Infinity’s Hollander said it’s hoped that when the ABC Radio sale goes through, “whoever is the winner of that sweepstakes” will join the Alliance.

Alliance members said they have drafted a “format selection allocation process that’s very fair and balanced.” It assures the consumer will wind up with the most “widely diverse” local programming in a market.