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HD Radio Alliance Shifts Strategy, Adds Members

The HD Digital Radio Alliance will enter its third year in 2008 with a commitment to use $230 million worth of radio airtime to promote HD Radio and a plan to encourage more radio groups and independent stations to join the effort.

The alliance will turn over some of that airtime to local stations to use for their own HD-Radio promotions, give individual FM stations more flexibility to choose HD2 simulcast-channel formats to better meet local needs, and let member stations air a limited number of ads on their simulcast channels for the first time.

The changes, a spokesman explained, give stations the freedom to create their own ads, monetize them in their own way and play whatever format that they feel best serves the local market. “The alliance,” added Greater Media president/CEO Peter Smyth, “needs every broadcaster to participate.”

The alliance currently consists of eight major radio groups and one independent station, accounting for about 1,300 AM and FM stations around the country. When the alliance formed in late 2005, it defined its mission as:

  • promoting the rollout of HD Radio through coordinated promotions with receiver manufacturers, retailers and automakers;
  • persuading automakers to offer digital AM/FM tuners as standard equipment; and
  • promoting and coordinating the rollout of FM multicasting to diversify terrestrial-radio formats in major markets to compete with satellite and Internet radio. Multicast FM channels were to be commercial-free as long as necessary to drive consumer demand for HD Radio, the association said at the time.

In outlining its 2008 plans, the alliance isn’t dramatically changing the value of the airtime set aside for HD-Radio promotions. The $230 million budget for 2008 is down slightly from 2007’s $250 million but up from 2006’s $200 million.

As in 2007, HD Radio ads will promote the technology’s benefits, a specific retailer carrying the technology, and specific HD-Radio models available in the retailer’s outlets. This year, however, radio stations will be able to create their own HD-Radio ads. Stations will use this inventory to promote their HD2 stations and build local promotions with car dealers, retailers and potential sponsors of their HD2 stations, a spokesman explained.

With this autonomy comes more autonomy. The alliance previously coordinated HD2 format assignments and focused alliance members on music genres that were expected to be extremely well-received, a spokesman said. Now stations will be able to choose their HD2 formats without alliance review, provided that the new format is not currently on the air in the local market on either analog or HD2, although each station must still get approval from its parent group. Individual stations can do whatever they want, and we expect that to increase the ability of broadcasters to go off in non-traditional directions, he said.

Previously the alliance selected which station group would add a particular format, so if the alliance decided that county music was under represented in New York, the alliance would assign the format to a specific group in that market. It would be up to the individual station to choose such country subformats as classic country, program song selection, and choose on-air talent.

In reversing its HD2 ad-free policy of two years, the alliance is allowing HD2 stations to accept “name-in-title” sponsorships and limited sponsor mentions per hour.

“Now is the time for each local market manager, program director and sales manager to step up and make HD Radio a part of their business objectives for 2008,” said alliance president/CEO Peter Ferrara. “Their support, commitment and enthusiasm are the active ingredients in taking HD Radio to the next level.”

Clear Channel CEO Mark Mays said the alliance’s 2008 goal is dedicated “to doing even more to empower local broadcasters to continue driving the success and momentum of HD Digital Radio.” The new mission “creates additional ways for our local stations to pump up the volume on promoting the fresh, free formats and choices available on their HD and HD2 channels.”

To date, about 1,500 radio stations are broadcasting digital signals, and more than 700 of them are simulcasting FM stations.