BOB GARFIELD: There are about 800 million radio sets in the United States, and while some of them may be new, they're all so – old. The hot new technology is digital or high-definition HD radio. Digital radio has no static and takes less bandwidth, so even if the analog signal takes up most of the space, it can still carry additional digital signals. That means that with HD radio, one frequency can have, for example, smooth jazz on its main channel and adult contemporary on a side channel and talk radio on a third. More than 700 stations are already broadcasting in HD, most of them agreeing to operate their HD service commercial-free, at least for now – that is, if you already have a pricey HD radio receiver. Phil Redo, former vice-president of station operations at WNYC, joins us to explain HD radio. Phil, welcome to OTM.
PHIL REDO: Thank you, Bob. Good to be with you.
BOB GARFIELD: What are the advantages, from an audio perspective, of HD?
PHIL REDO: It's going to make AM sound closer to FM, but what it will do on the FM is allow you to have CD quality on your main channel and then FM, what's been previously known as the FM quality, on a second channel, and then a slightly less quality level on a third channel, and then potentially even a data stream-only channel, and all of these would be able to carry data in the text versions that I think people are becoming somewhat more familiar with through satellite programming and other things, where they're seeing LED readouts of all the data about songs and the composers or the artists that are being heard.
BOB GARFIELD: In other words, very much like satellite radio. Is that what's generating all of this, the competition from satellite?
PHIL REDO: I think it certainly what was put it in high gear. Radio, being the oldest of all the electronic mass media, I think is facing a myriad of new competitors. What this allows us to do is to fight back. The other thing, of course, is it's local, and the third most important thing is that it's free. I mean, yes, you have to buy a new device, but once you've bought that device, it's free.
BOB GARFIELD: Now, at the moment, I gather there isn't exactly a gold rush for HD receivers. It's still very, very low penetration in spite of your access to the radio waves to get your message across. What's stopping people from diving right into this new technology?
PHIL REDO: That's the chicken and egg problem. While the manufacturers would love to sell another, you know, 800 million radios to the same people again, the people who are at the retail level say, “well, we don't really want to stock these until there's a product out there that people are actually asking about.” So that's why it is still a very low penetration but with the potential for exponential growth that I don't think any of the new media are going to be able to rival.
BOB GARFIELD: Now, one of the come-ons for getting one of the radios and tuning into the side channels is that by a mutual agreement, this alliance of broadcast stations is making these alternate stations commercial-free, at least through the year 2007. Is that the marketing gimmick to get people to sign on?
PHIL REDO: Yeah. I think Bob, the interesting thing is it's a real throwback to the very early days of radio broadcasting when department stores, for example, would become owners of radio stations, not so much because they had content but because they wanted to sell radios. And I think in this case, what people understand is that one of the biggest objections to regular radios are the interruptions caused by commercial content. So the combination of the two is offering some compelling and perhaps niche programming that is not available and wouldn't be sustainable on a main channel, and at the same time, making it enticing enough that it drives people to go and say, “I'd like to buy one of these new devices.”
BOB GARFIELD: In digital television, Congress has mandated that all receivers sold, I think, in the year 2009 must be digital. Is there any such legislative mandate for digital radio or is that strictly voluntary for all concerned?
PHIL REDO: At this stage of the game, it's strictly voluntary. I think that radio felt compelled to move into the digital age. It was almost incredible that every other device had gone digital and radio still had not. But at this point, I don't see that on the horizon. I would never say never. Certainly that spectrum is valuable, and I also think that would allow, if radio was able to become fully migrated to a digital domain, even more multicasting opportunities. And, you know, at the end of the day, I think that that's what the consumers want.
BOB GARFIELD: Whenever new technology comes along in media, there's always one or another vested interest that just goes ballistic at the prospect of seeing their business eroded. I guess the entire business model of both the radio and recording industries has been this symbiotic relationship. The broadcasters play the music, essentially for free. They don't pay royalties to record companies. And record companies get to have their songs sampled over and over and over to create an appetite among consumers. But if I've got a hard drive on my receiver, that throws a monkey wrench into a 100-year-old business plan. Do the receivers sold now contain a hard drive?
PHIL REDO: They don't currently, but I know that the technology exists. But keep in mind that there's also technology that's being developed that encodes the music, that will prevent some of this from being offered as a pass-a-long. And I really believe that the two industries do need one another, and I do think they're going to sit down and figure this out. And I think that the devices that are going to be built in the future are going to have to acknowledge that some protection needs to exist.
BOB GARFIELD: Okay, Phil. Well, thank you very much, and all best of luck in the new gig.
PHIL REDO: Bob, thanks a lot.
BOB GARFIELD: Phil Redo, former vice-president of Station Operations at WNYC, is now the new market manager for Greater Media Boston.