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HD Stalled, Struggling
Billboard reports that HD Radio sales were about 300,000 in 2007, 1m expected in 2008: You may have noticed, the few of you who have been reading this blog, that I haven't posted in months. I was never idealistic about digital AM/FM, but I thought it was an interesting transition that would produce a greater array of interesting programming, along with interesting hardware to go with it.
Hasn't happened.
While public radio stations have taken advantage of the format to use second and third digital FM channels for alternative programming, often programs that they can't fit into a regular schedule and international news, commercial stations have remained bonded together into an alliance that ensures no competition among secondary formats, and nothing original in programming.
HD Radio's patent/format owner iBiquity says that with more radios below $100, sales will increase. I keep asking: where are the receivers? Is there some good reason that inexpensive home receivers, the hub of the home-entertainment system, don't have HD built in? Those are sold in the millions each year, and it's an odd omission. Car radios increasingly have factory-installed or factory-included HD, however, and the tabletop radios continue to be produced.
Frankly, as I walk around with a 2.5G (original) iPhone with several different streaming music options that provide me live Internet radio (from broadcast and Internet-only stations), custom programming, and other options at a fidelity that's not far from HD Radio, I don't see how HD Radio will thrive.
Internet radio looked to be another popular piece in programming stealing share from existing listening sources and expanding the audience of people listening to provided music (as opposed to owned music): regular analog terrestrial radio, satellite radio, and Internet radio would appeal to different markets at different times.
But if you have mobile phone radio on a device that also can store hundreds of hours of purchased or rented audio, where does HD Radio fit into the picture? And where's the future of analog broadcasts, too?
Comments
"Is there some good reason that inexpensive home receivers, the hub of the home-entertainment system, don't have HD built in?"
Here's the answer: From the beginning, iBiquity has followed a clear, flawed business model with regards to receivers: Tax the chip.
Meaning, make it all depend on a chip that iBiquity controls, and collect money on the sale of every chip. They put a toll-booth at the worst place in the road that they could possibly have placed one: Listeners.
In the beginning it meant delays because iBqiuity had no exprience designing or controlling chips.
And it proved an inherently flawed concept, especially so because its competition, satellite radio, was, is and always will subsidize access to its technology.
The delta between tax and subsidize is so wide that fundamental economics have been all you need to understand to know why iBiquity will inherently fail.
Never mind the rest of the discussion, which is all valid and points to additional problems: HD is not high-def, it's actually low def, especially in multi-channel mode (think 32 kbps streams if three-way, 96 kbps at best, both far below the 160 and above that are average, and 320 being the CD standard).
And HD is incompatible with DAB, the world standard (and has cheap high-quality radios flooding the market).
Throw in for good measure that you don't even need a chip to decode HD -- it could be done in software, and has been done in software, but iBiquity will not allow it, despite the fact that a software implementation could make every computer an HD receiver with a cheap $10 USB antenna module.
It's all such a long and sordid tale. I could go on and on but will not, mostly because it doesn't matter anymore. This was a "mass media" that never got the mass and ceased to be a viable media and even its founding radio companies have moved on to digital streaming over whatever network you choose: wireless, wifi, wimax, wired -- you name it. If you can get digits, and you will be able to do so wherever you are and whenever you want, then you will be able to get streaming digital audio, and at whatever bit rate you like, with interactivity (and more importantly, interactive commerce).
Posted by: Jim Griffin | August 28, 2008 12:04 PM