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HD Digital Radio Alliance launches; Ferrara in charge

We pegged it (11/29 RBR #232): Finally, a coordinated industry effort to compete with the format variety of satellite radio. Yesterday in NYC, most of the big radio groups got together and announced the Orlando-based "HD Digital Radio Alliance," the industry's means to coordinate the HD roll-out in each market, develop programming for multicast (HD-2) channels, create HD and HD-2 awareness ads (200 million bucks worth next year alone), and work to get HD manufacturers moving on multicast receivers and the automakers as well for OEM deals. Peter Ferrara from Clear Channel is the President/CEO of the new alliance and will be solely dedicated to and paid by the alliance. Participating groups so far include Bonneville, Citadel, Clear Channel, Cumulus, Emmis, Entercom, Greater Media and Infinity.

Staff will be hired there on an as-needed basis. The plan right now is talent will be contracted out from the participating companies to do various projects. Each station participating will launch only one HD multicast signal, at least initially.

Serving on the consortium's oversight management committee are Mark Mays, CEO for Clear Channel; Peter Smyth, president and CEO for Greater Media; and Joel Hollander, CEO for Infinity Broadcasting. The new HD-2 channels will be commercial-free for at least two years.

It's all about changing radio's declining image among listeners (especially younger ones) of stale, boring and predictable. We spoke with Ferrara on that: "I was talking with somebody over at the press conference and they asked me if I thought it was going to be challenging for the programming people to come up with new format ideas. And I said No, I don't think it's going to be challenging at all. I think it's going to really stimulate their interest and creativity in doing this. They get a chance to experiment again. They get a chance to try new things."

Much more with Peter Ferrara.

What are the groups going to be required to commit financially?

"They're committing a number of things, none the least of which is their support for the vision and objectives. But from a monetary standpoint, all of the member companies are contributing money, scaled based on the number of radio stations that will be HD-enabled. But the biggest commitment they're making is a substantial amount of commercial inventory on all of their radio stations to promote HD. I basically have the ability to go out and partner with receiver manufacturers, retailers and automotives, and I've got 200 million in radio time to work with."

What is the approach going to be with the automakers to help accelerate their OEM adoption? So far only BMW has agreed to offer HD Radio receivers as a factory-installed option in its 7 Series 2006 model year.

"The first thing I need to find out and understand is where are each of them in the process right now. iBiquity has been fairly focused on Detroit in particular and has done different things to try to move that along. My goal is to be able to sit down with them and say look, you guys want to sell cars. We want to put HD Radios in those cars. If you'll help us put HD Radios in cars, we'll help you sell them. That's the real power in it for us - - and for them."

[He's already booked tickets to CES in Las Vegas to meet with manufacturers as well].

How will market-specific HD programming lineups be chosen? What's the process? How will the formats be chosen amongst competing stations?

"We're going to go through the format selection process over the next couple of weeks, and we anticipate that sometime in the first part of the year we'll be announcing the Top 25 markets. Because this is being done on a market-by market basis, every market is going to generate unique ideas that are going to fit within that market's spectrum. It will be done through the partnership with all of the Alliance's senior programming people. Everybody submits their ideas for formats for the market, and obviously there will be more ideas than there will be signals. Then we go through those formats and get agreement that everybody thinks those are all acceptable ideas. Then each one of the companies goes through and selects which format they want to do. And we have an HD Index that we work from that allows a hierarchy as to who goes first and second, etc. And it's by station, not by company. This will be the process for any conflict resolution as well. We've actually beta-tested this process in a couple of markets already and it's working great."

Are other groups welcome to join in?

"Absolutely, as long as they agree to the mission and objective of the Alliance and they're willing to contribute to the HD-2 process for format selection and they're willing to commit the inventory, it is wide open. We want to as many groups and companies as we can possibly get. [contact him at [email protected]]

RBR observation:
The planning for this came to light months ago (9/6/05 RBR #174) and the groups had hoped to have it ready to announce at the NAB Radio Show last fall in Philadelphia. But these things take time to come together. It is vital that the radio industry speak with one voice to promote HD Radio to the US public and roll it out in an orderly manner. We don't need to remind anyone of the experience with AM stereo. While there's been a lot of talk about the programming side of the Alliance, which will provide unique programming for the new HD-2 channels, we think the more important parts are the plans to introduce HD Radio to the public and convince automakers to put the receivers in new cars. Even if your company has its own plans for programming HD-2 channels, you would do well to find out what the Alliance will be doing to make it possible for people to actually receive those new channels.

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