The radio industry is betting that high definition digital radio will make it more competitive against its perceived threat from satellite radio. Only one problem. The real threat to terrestrial radio is not from satellite radio, but from the next generation of listeners who spend their time listening to music interactively. This next generation -- Generation Y -- has been raised on the Internet and is not enamored of what terrestrial radio has to offer. It's more than whether radio stations cut their commercial loads or add more variety, it's about interactivity. Almost to a person the top executives who run the consolidated radio companies are convinced that HD radios will save the day.For example: the I-Sonic satellite and terrestrial radio from Polk is being snapped up from the manufacturer by radio companies looking to use them as monitoring devices and to offer them for giveaways. And it's a good thing, too, because these radios cost $599 retail. Did I mention that they are DVD and CD capable as well?
Let's figure this one out. The next generation is going to spend $599 -- and certainly some day a lot less -- to own an HD radio that gives them more of what they don't want (radio) and none of what they already have (interactivity). There are some companies like Emmis Broadcasting which recognize that HD is not the sole answer.
If you're thinking about the future -- and terrestrial conglomerates should have been doing that ten years ago -- the operative word is interactive. The model is the Internet. The future is mobile and interactive.
Radio companies should be thinking of how to get into the content business by cooperating with the inevitable and encouraging their many bright programmers to find new uses for mono dimensional over-the-air radio.
