Many Retailers Forecast ’08 HD-Radio Gain
By Amy Gilroy -- TWICE, 5/22/2008
NEW YORK — Consumer electronics stores and mobile electronics specialists say HD Radio hasn’t been a big hit to date, but many contend sales have been picking up and will likely get an additional boost this year from a growing selection of affordable products and the launch of iTunes Tagging.
The digital-AM/FM technology could get an additional boost if more retailers focus on HD Radio’s ability to deliver multicast stations and if more retailers install outdoor antennas to deliver a compelling demo, HD-Radio developer iBiquity Digital noted. In its latest promotional campaign, the HD Digital Radio Alliance has already shifted to focus mainly on multicasting’s benefits.
When the first HD Radios hit the market in 2004, digital FM stations had not yet begun to multicast an additional channel using digital-FM’s multicast capability, but now more than 800 FM stations are broadcasting two to three programs simultaneously on their assigned frequencies. "We always had a vision it was about the additional applications it would bring, but out of the gate, the only thing we could say was it sounds better," said Bernie Sapienza, iBiquity retail business development VP. "Unfortunately, that’s what stuck with retailers, but our best application is multicasting, and we recently released another application called iTunes Tagging."
In the future, Sapienza added, HD Radio will also offer "conditional access," or the ability to pay for select programming, he continued. "If Bruce Springsteen is playing tonight and you don’t have a ticket, you could pay a buck and buy that one concert on your radio," Sapienza said. Listeners could also buy individual sports games. "You may say, I don’t want to pay $13 a month [for satellite radio], but I’ll pay $1 just to listen to a Browns game."
For the most part, most of the 20 retailers polled by TWICE said HD Radio has yet to generate much demand, but prospects are growing. Aftermarket car HD Radio sales seem to be faring better than their home counterparts, at least for now, TWICE also found.
Polled dealers included MyerEmco of Gaithersburg, Md.; Vann’s of Missoula, Mont.; Nebraska Furniture Mart of Omaha, Neb.; Wilshire Home Entertainment of Thousand Oaks, Calif.; Bjorn’s Audio Video of San Antonio; Audio Etc. of Orange, Conn.; Take 5 Audio of New Haven, Conn.; AudioMasters of Pineville, N.C.; Car Toys of Seattle; ABT Electronics of Glenview, Ill.; Action Electronics of Newington, Conn.; Westminster Speed & Sound of Westminster, Pa.; Sixth Avenue Electronics of New York; Flanner’s Home Entertainment of Brookfield, Wis; Ken Crane’s Home Entertainment of Hawthorne, Calif.; and Crutchfield of Charlottesville, Va.
In home audio, MyerEmco purchasing VP Dave Glassman foresees long-awaited gains. "HD Radio is being included on more and more [A/V] receivers that are in the popular price points, so I think you’ll see a pick up in interest. But as far as people beating down the door to ask about HD Radio; there’s not a marked increase in it. That’s the home audio side of it."
Flanner’s audio buyer Jarrett Ernst described his home HD Radio as "doing very well," and Crutchfield said it is seeing some momentum build on the home side.
Falling price is a key catalyst for home HD Radio sales, retailers said. A/V receivers with HD Radio started in 2007 at $1,600 for an Integra model, with a handful of other HD-Radio A/V receivers (AVRs) priced at more than $2,000 from multiple brands. This year, Yamaha began offering an HD-Radio AVR at $999, and Coby and Sony have announced $100 standalone component tuners that can be added to a home’s existing component-audio system. In addition, retailers said, tabletop HD-Radio gear is holding steady in price but gaining features such as CD players.
Likewise, prices are getting more affordable in the car audio aftermarket. In-dash CD-receivers with embedded HD Radio are starting at $119, and add-on aftermarket tuners are starting at less than $99.
On the car side, "HD demand is growing," said Dan Jeancola, merchandising senior VP for Car Toys. Dual and Jensen CD players with built-in HD-Radio tuner "have been very popular," he said. "And there is excitement from our sales team and customers about the upcoming add-ons with iTunes tagging."
Neil Riffer, mobile electronics buyer for ABT Electronics, agreed that demand is rising on the car side. "We’re getting more people coming in and asking for it," he said.
Action Electronics called HD Radio an opportunity for mobile specialists to replenish lost satellite radio sales. "We feel that HD Radio is just stepping in where satellite radio dropped the ball," said owner Mark Gebeloff. "The merger is on hold, and you can’t get [satellite-radio car] product."
For its part, mobile specialist Westminster Speed & Sound is promoting HD Radio as a way to boost margins. The company has been pushing the JVC KD-ADH39 in-dash CD-receiver. "We found we can take a customer who was going to buy a $120 CD player and bump them up $80 to a $200 HD Radio," said owner Mark Miller. "There is demand. Some people are asking about HD, and others like the idea once you mention there’s no subscription."
On the home side, Bjorn’s buyer Joey Martinez called Yamaha $999 AVR promising. "I think because of the Yamaha, it will pick up," he said of HD-Radio sales for the home. Bjorn’s also sells tabletop models. Still, he said, "I don’t think as many people are coming in and asking about it, which is surprising because in this market, there’s so much HD Radio." As for iTunes Tagging, he called it "a great idea."
At Sixth Avenue Electronics, operations VP Tom Galanis said HD Radio "is picking up in both home and car." Although he described current sales as "OK," he pointed out that "HD-Radio products are starting to become more accepted." Sixth Avenue carries A/V receivers with HD Radio along with some car stereo, and the company plans to add tabletop HD Radio.
Sixth Avenue and other retailers said they promote the technology’s sound quality. "That’s the big advantage compared to Sirius and XM — it’s a huge difference in sound," Galanis said. Flanner’s, on the other hand, promotes HD Radio’s ability to receive extra stations through multicasting. "That’s our main pitch," said Flanner’s audio buyer Jarrett Ernst. In Milwaukee, he noted, the sole classical radio station ceased broadcasting, and the only classical station is now exclusively on HD Radio.
The Flanner’s buyer also claimed his HD-Radio sales over Christmas "were spectacular" in Sangean and Sony tabletop radios. A Sangean stand-alone tuner and select Integra AVRs also performed well, and Flanner’s is now waiting for Sony’s $100 component home tuner.
Flanner’s notes, however, that returns on HD Radio for the home is higher than on other products. "If you get a signal, the sound quality is spectacular," said Ernst. "If you don’t get it, you don’t get it. It has a higher return rate than other products because someone can’t get a signal or maybe they live in a valley or too far away from the station."
At Nebraska Furniture Mart, executive Mark Shaw said, "We haven’t seen any increase in sales. There’s multicasting, but there’s not a lot of content. It’s not a big market." The company sells a Sony tabletop radio, a Denon AVR and a car audio piece.
Dax Keuhn, electronics buyer for Vann’s in Missoula, Mont., described HD Radio as "kind of floundering," likely because the number of HD Radio stations is limited.
In California, Ken Crane’s Home Entertainment sells Denon’s AVRs at a suggested $2,499 and $5,200 with build-in HD Radio but doesn’t sell tabletop models, which don’t work inside the stores because of all of the interference created by all of the TVs inside the store, said senior VP/COO Steve Caldero. Connecting all of the tabletop radios to an outdoor antenna to pull in HD Radio signals is not very practical, he added.
"I would not call HD Radio a real important feature on home products yet," Caldero said. "The local stations are mentioning that they are broadcasting in HD but, I am not sure people understand what that means — yet.
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I have had my JVC HD radio in my car for a year now and love it! Many of the local stations in Cleveland market have an HD1 and an HD2 station so there are more choices than before. Does is sound good? Yes,wider soundstage, deeper, tighter bass. The high end could be a little less harsh. Is it CD quality? Not quite, but its much better than plain FM. I work in Broadcast TV in Cleveland and the biggest reason for lack of enthusiasm over HD radio is a poor job of marketing by the broadcasters themselves. We all knew Digital TV was coming, but until just recently did the broadcasters get their marketing campaigns in high gear to educate the public. I think Digital TV is doing a far better job at promoting HDTV and the switch to digital TV than the Radio Broadcast community is doing with HD Radio. My biggest worry isthat the manufacturers of A/V Receivers are not gearing up to provide HD radio Tuners as a routine part of their gear. And what IS on the market is priced way too high. Its just another radio tuner, not some super high end format that will replace CD's. And it should be priced so. Right now, the Sony XDRF1HD HD Radio Tuner for under $100 is the way to go until it becomes the norm for any receiver to carry the HD tuners.
Jim Settecase - 2008-13-11 15:09:00 EST -
FM HD radio is amazing. Twenty stations in this market work just fine. Tons of ethnic content, foreign news, amazing programming that was never available in a car radio before. And I can receive non-HD first adjacents just fine with an HD radio or a sufficiently rejecting analog unit.
On AM, though, the ability to receive distant stations at night is a loss, and the reception is much less reliable than it is on FM. Plus, there's no multicast, and analog sound quality to run HD. Not so for FM. If HD stuck to FM, they'd be much better off.
Rachel - 2008-30-10 10:00:00 EDT -
“HD Radio on the Offenseâ€
“But after an investigation of HD Radio units, the stations playing HD, and the company that owns the technology; and some interviews with the wonks in DC, it looks like HD Radio is a high-level corporate scam, a huge carny shill.â€
eastbayexpress.com/2007-03-07/music/hd-radio-on-the-offense
"Radio: Ponzi's back!"
"In 1918, we had Charles Ponzi. Ninety years later, we have Peter 'Sgt. Bilk-o' Ferrara. Schemes. From Ponzi to HD Radio. Ibiquity has the license and collects the fees. The HD Radio Alliance, which Sgt. Bilk-o runs, does the fast-talkin’, slow walkin’ hype. Right? Like the other schemes, the HD Radio edition begins with a hard-sell sales pitch to hook you in and establish the product. Right?"
gormanmediablog.blogspot.com/2008/03/radio-ponzis-back_27.html
HD Radio is a scam!
Radioman100 - 2008-23-5 18:14:00 EDT -
I cannot believe the other comments to this article! I have been an HD radio listener for almost two years. As an on the road salesperson, I have favorite stations in Cincinnati, Louisville, Indianapolis, Nashville, and other cities in the Midwest. HD is in all these areas. Does it work? It is absolutely fantastic. As a side note, when on the road, I listen to talk radio as it seems to make the miles go quicker...AM suddenly sounds like a clear FM station and in stereo, just as the HD folks claim. I have many friends with XM and I just do not like the sound (can anyone say MASSIVE COMPRESSION) or the fee. Also, my favorite radio personalities are not on XM or can I get instant weather when the snowstorms hit. I am a salesman and trainer for a major HDTV manufacturer so I do have some electronic competency and know what I am talking about, and what I HEAR. Just to comment on the fee stuff, I will not be a customer for any of that. There is too much other programming material to choose from for me to pay for radio programming. I like it so much I bought another in dash JVC unit for my wife''s car, and although she is not a hi-fi aficionado, I have already noticed she tunes to HD stations exclusively for the sound and ability to see the display of artist names and songs etc...I again just do not understand why you guys are so anti-HD.
Jim Grigsby - 2008-23-5 09:48:00 EDT -
Interesting that Best Buy, Circuit City, Wal-Mart, Radio Shack, etc were not polled - that is becasue many HD radios are already on clearance because they are not selling. What - was this article written by iBiquity/HD Alliance.
Mike Walker - 2008-23-5 08:43:00 EDT
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