The US radio industry is looking to make additional income from music downloads, we’re told by Reuters – while listening to the radio, they’ll be able to select the playing track for paid download.
The piece announces the catch-all snappy name of HD Radio, that’s iBiquity Digital’s offering, which digitised the FM and AM bands. European readers will be well aware of equivalent FM services under the banner of DAB (Digital Audio Broadcasting) which has been available for a considerable period of time, and the currently lesser known drm (Digital Radio Mondial, not Digital Rights Management) which offers FM-quality listening on the AM frequencies.
The benefits brought by HD Radio/DAB/drm are digital compression of the audio, enabling more radio stations to be broadcast on the same amount of frequency. As the broadcast is digital, additional information can be distributed with it, such as the name of the artist and track playing.
As with all things compressed for digital distribution, there is a balacing act between number of stations and the audio quality of those stations. Digital doesn’t have to equal quality. The quality of the audio isn’t assured – the amount of the compression directly controls the quality.
US “terrestrial radio”, as it is being called by some to differentiate it from its satellite-delivered competitor, is under pressure from numerous sources; satellite radio (XM AND Sirius); Nokia’s Visual Radio; Internet-based radio stations; digital music player; podcasting, and don’t appear to have acted that quickly to respond.
The current cost of radios to receive HD radio are in the range of $500-$1,000 (~€382-€764, ~£270-£540), but as we’ve seen in the UK with DAB, it’s just a matter of time before these drop to the £49 (~€70, ~$91) levels, as more efficient chip sets become developed and a mass market is formed.
We found the comments by Jeff Littlejohn, executive vice president of distribution development at the dominant US radio station company, Clear Channel, the most illuminating, “We don’t think the business model associated with downloads is nearly as attractive as adding additional audio channels.”
In Clear Channels view there’s still more money to be made from advertising revenue than from music downloads, not least because they don’t have to share the revenue raised with the record companies – who are not known for their willingness to take small proportion of sales.