I've recently posted two exchanges (July 31, August 4) between two radio professionals, researcher Mark Ramsey and producer Stephen Hill, about the likelihood of future economic success for "HD Radio." Check them out because they're relevant to what I'm about to say. Readers who don't know me should note that this is written from a public broadcaster's perspective, but everything I will say applies to commercial radio as well -- or even television (though the standards and architecture there are less open).
Like nearly everyone in radio management, their comments assume an "HD Radio" configuration that is more or less congruent with the current second-generation digital receivers. That is, a main channel that's identical to the analog channel and protected from digital drop-outs by a blending mechanism, and one or more additional program channels that are digital only and therefore unprotected from drop-outs. Both Mark and Stephen agree that disruptive technologies, Web-delivered and portable storage audio, will, along with other weaknesses in the assumed business model, make for tough sledding. Stephen says it's DOA.
I generally agree with both of these critiques, though just short of the DOA part unless you assume that "HD Radio" development and derived business plan will stop with the current generation of receivers. In this sense, "HD Radio" is less than we think. However, if their critiques are true for 1st and 2nd-generation digital, it must be also true for analog, so they're important.
There are two digital transitions involved here. The easy one is converting the transmitter. In many cases, it's a no-brainer because the big FM build-out from the mid-Seventies to the mid-Nineties across the country leads to the need for analog transmitter replacement today. It's not a huge capital leap to replace analog with an analog+digital transmitter. The problematic transition, however, is the consumer one. When life was much simpler, we saw it take roughly 40 years for FM to dominate AM. Even something as easy as FM stereo wasn't an overnight success. In fact, its introduction 45 years ago was the last radio innovation that really took hold, however slowly -- unless you want to count CD and MP3/AAC players as radio innovations.
Today, the geological time of broadcasting is competing with the "dog years" of the Internet. Given that "good enough technologies" are a powerful drag on consumer acceptance of new ones in the over-the-air broadcasting world, broadcasting needs to somehow converge with the two most powerful disruptors -- broad-reach wireless internet services and vastly more capacious portable storage devices -- or we (analog and digital) are going to be found on f**kedcompany.com. A quarter century of declining radio audiences has shown that (a trend which, until the last couple of years, fortune has permitted my segment, public radio, to escape).
We need to think of radio broadcasting's fate as something like 15th century Norse Greenland. The Norse settlements there didn't disappear on a given Sunday. They disappeared over about a century, ending some five centuries of settlement during which they used up fuel and fodder that could have saved them and during which a "little ice age" descended upon them. They likely died of freezing and malnutrition.
Our enemy is the malnutrition of a dated business model and the "freezing" (entropy) of hundreds or even thousands of competing audio sources. Are we going to fight this with analog technologies that are 85 and 65 years old, respectively? We can't even spend $3,000 per station to add RBDS. Like the Greenland Norse, if we just live the status quo, stations won't disappear on a given Sunday. Some stations will be better at putting away fodder and others will have larger stores of dead wood to burn and be more creative about breaking up furniture to make fuel. GM's in my age bracket will likely escape to full-time golf, gardening and grandparenthood before the end arrives.
No, I think that an important survival strategy for radio broadcasters is to figure out how to mate what we do well with what the Net does well. And it turns out that "HD Radio" is actually well-positioned to be an important part of this if we can accelerate the creative development of its capabilities and not let competing interests screw up the roll out of these innovations. You see, "HD Radio" capabilities are defined by accessible software. That is, many capabilities can be easily changed and updated through software upgrades. National Public Radio took the lead in advocating advanced features in its "Tomorrow Radio" project (IMHO, a much better name for digital than the one the alliance chose). We can do it again.
Before I start sounding too utopian, consider that the underlying technology for "HD Radio" is the W3C's Synchronized Multimedia Integration Language (SMIL, pronounced "smile"), expressed as the HD Radio Broadcast Multimedia Language, or HD BML (for more on SMIL, see this). Considerable development work is already underway to integrate these radios with traffic systems, to provide "TiVo-like" functionality, conditional access and other advanced features coming in real products very soon. We should encourage open source development of "HD Radio" advanced features, especially those aimed at integrating these receivers with "IP-over-IP" digital distirbution or with portable storage devices. Open source has been hugely successful, both with visible efforts like Linux and Firefox, and with thousands of others. SourceForge.net hosts some 100,000 projects, many of them media related (check out, for example, MythTV). Yes, receiver manufacturers need to provide some accommodations, mainly in interface development, on-board memory, and Bluetooth (or similar) capabilities, but these should be coming along anyway.
Also coming along anyway are radios integrating WiFi, WiMAX, or other 3G or 4G wireless technologies. Let's integrate them with "HD Radio." Here's what a convergence radio ("Tomorrow Radio II?") might look like. There are, by the way, already about a half dozen Internet radio appliances on the market, at least one of which is mobile using Sprint's EV-DO service. The problem with these is that there's no easy way to give users curated access the thousands of available choices. Think of curation as a valued filter solving the problem of the entropy of too much choice. Let's solve that problem for them.
"HD Radio" creates small "neighborhoods," anchored by your main program channel, through which listeners find your main and subsidiary channels. What if instead of having two or three channels in the neighborhood, you have two or three dozen -- or even two or three hundred -- that you have curated or enabled listeners to create online? A convergence radio would seamlessly concatenate your over-the-air channels with those coming in by wireless Internet. Those additional channels might also include your branding, traffic, public safety/homeland security information, weather, and local underwriters (or advertisers in the case of commercial stations). Stephen's "Hearts of Space" might be one or more channels. So could NPR's podcasting offerings (user-selected, of course), a listener's daycare or breezeway cam (these radios support video, too), or (assuming the Lawyers' Full Employment Act of 2007 passes) a listener's iTunes collection. Some of these channels could be conditional access (e.g., a reading service for the blind or members-only-channels) which, along with underwriting or ad sales, could be the foundation of a sorely-needed new business model. You could also mirror your subsidiary channels via streaming to provide blended reliability not now availabile on "HD."
Bottom line, don't think of "HD Radio" as being defined by the second-generation receivers and strategies that are now rolling out. Expect to see prototype third-generation receivers at the next CES in January. Take Wayne Gretzky's advice, skate to where the puck is going, not to where it's been. "HD Radio" is also more than you think.