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HD Radio Technology Finds Niche Audience

HD2 digital radio multicasting enables broadcasters to add new channels featuring programming not typically found on AM or FM radio stations. New HD2 channels are popping up with bluegrass, big band music, gospel and Spanish oldies formats rarely found on analog radio today, according to Kagan Research.

Country music was dropped as a radio format in the greater New York City area in 2001, but last year made a comeback via separate HD2 audio channels from WKTU-FM and WALK-FM, two area Clear Channel stations in the market.

"If we've seen anything over the past few years, it's that the consumer wants diverse content," says Robert Struble, president and CEO iBiquity Digital Corporation, the developer of HD Radio technology. "This gives radio an option to address the long tail in a way that makes economic sense."

The long tail is a marketing concept referring to the ability to market special-interest product to niche consumer segments that traditional media ignores. HD Radio technology squeezes digital signals alongside analog broadcasts. The first digital stream -- HD1 -- is a simulcast of the analog or main channel while the other streams offer original programming. All digital broadcasts fit within the existing radio spectrum.

HD Radio technology is already broadening programming opportunities, covering more audience segments and using multicasting to field test new ideas. While just 1,225 U.S. radio stations are broadcasting in digital out of a total of 13,000 analog radio stations, Struble notes that those digital radio stations cover 80 percent of the U.S. population.

HD Radio receiver prices, which currently begin at $149.99, have fallen by more than 50 percent since their introduction two years ago, following a pricing curve typical for new consumer electronics product introductions.

"We need those price points to get down to a more mass market level," he says. "And we need to get receivers in more big-box retailers." This week, Wal-Mart agreed to sell a $190 car-radio model HD Radio made by JVC in some 2,000 of its 3,500 stores and on its Web site, giving a boost to the medium.

Besides offering consumers radio programming, HD Radio technology can also be employed to transmit data streams for businesses and consumers, as digital can squeeze more data into the existing bandwidth than can analog.

Two months ago, Clear Channel unveiled plans to launch a venture with Microsoft for a data service dubbed MSN Direct HD. Car navigation services are also considering digital radio transmissions.

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