Eight U.S. radio companies yesterday announced an alliance designed to accelerate the nationwide transition to digital radio and pledged more than $200 million worth of commercial airtime on their stations next year to promote the technology.
The goal is to help terrestrial radio compete at a time when media in all forms are increasingly being offered in enhanced digital formats that provide consumers with an increasing number of reading, viewing and listening options.
Industry titans Clear Channel Communications and Viacom International Inc.’s Infinity Broadcasting Corp. are founding members of the HD Digital Radio Alliance with Cumulus Media Inc., Emmis Communications, Entercom Communications Corp., Greater Media Inc., Bonneville International and Citadel Broadcasting Corp.
The companies, which compete every day for listeners and advertisers, partnered to help raise demand for HD radio. “Otherwise, there was a good possibility it might not ever succeed,” said Peter Ferrara, the alliance’s president and chief executive.
“This wouldn’t have happened four or five years ago,” said Tom Taylor, editor of Inside Radio, a daily industry newsletter owned by Clear Channel. “The technology is [now] there and the whole process of convincing manufacturers, car makers and broadcasters themselves that this is the next step.”
Mr. Ferrara, former senior vice president of Clear Channel Communications, said terrestrial radio reaches 200 million people daily and that the alliance was “not at all” a response to the growing popularity of XM Satellite Radio Inc. and Sirius Satellite Radio.
“The reality is consumers are deluged with demands on their media time,” from portable audio and video players to the Internet to print and television offerings, he said. “The radio alliance wants to make our tree in the forest stand a little bit taller.”
The satellite providers have about 9 million subscribers combined, and both are in the midst of aggressive holiday advertising campaigns.
“We hope that [yesterday’s] announcement is an indication that the broadcasters have finally decided to compete on content rather than through legislative efforts to cripple satellite radio,” said Nathaniel Brown, an XM spokesman.
A Sirius spokesman refused to comment.
Nearly 600 radio stations in the United States are already broadcasting their primary programming signal in high definition, which is supposed to eliminate the static and fades associated with analog signals.
HD radio also enables broadcasters to segment an existing frequency so that it can carry multiple, simultaneous, AM and FM broadcast streams and wireless data.
The broadcasters are calling the newly created stations, HD2, and they can be used to broadcast weather, traffic information or certain types of music.
Alliance members have agreed to coordinate the use of all multicast HD2 channels, which will be locally programmed in each market and will initially be commercial-free.
The alliance’s short-term goal is to get the top 25 radio markets in the HD2 format by the end of March.
A longer-term objective will be creating partnerships with radio receiver manufacturers, retailers as well as the automobile industry, Mr. Ferrara said.
The group expects to announce its first market-specific HD2 lineup early next year.