While some opine on iBiquity’s technology, both positive and negative,
there is a much bigger story to HD radio, starting with Satellite
radio.

Broadcasters didn’t launch Iboc because they knew digital technology
was the future of radio, it started with satellite broadcasters doing
what some said couldn’t be done. Sat radio, convinced listeners to pay
a monthly fee for radio. For the first time in history, terrestrial
radio’s users, broadcasters listeners, were coughing up $12.99 a month
to hear the naughty ramblings of Howard Stern, opinions of Larry King
or adult contemporary music, that’s always been a free over the air
service. Think of this, roughly 18 million terrestrial radio users,
broadcasters listeners, are also paying monthly services fees to XM &
Sirius to hear music and talk formats. I’ve said broadcasters
listeners, more than once, to illustrate the deep-seated feelings of
contempt, that must be felt towards sat radio, by the arrogant kings
of the air, but that’s another story.

Broadcasters will never admit this, but between you and me they had to
be impressed
and envious of satellite radio’s pay to play revenue model. Industry
titans must have been chomping at the bit, over the prospect of
developing their own subscription radio model.

Enter Bob Struble, with a little known company IBiquity, propped up by
broadcasters and investors. Thus quicker than the eye can see,
broadcasters pulled a magical rabbit out of their hat, called digital
licensing rights and shazam, they’ve invented pay to play radio, sold
as free digital radio. IBiquity charges broadcasters, annually
thousands, for Iboc digital licensing rights, plus manufactures pay a
one time licensing free, that passed onto consumers, for each
receiver. Think of it, 235 million people weekly listen to terrestrial
radio, and Americans own 7-8 radios per household. The potential
numbers and profits from digital licensing and traditional advertising
revenues are positively huge!

Unfortunately, gadget-loving, credit card rich Americans have been
slow to upgrade their traditional analog receivers. Less informed
radio users, average people, have misconceptions, believing HD and sat
radio are one in the same. My marketing hat tells me, people remember
whose fist in a category and don’t care who’s second, and HD is
second.

Bridge Ratings estimates that Internet radio will have 180 million
listeners by 2020, 250 million will still be listening to terrestrial
radio, but HD will have less than 10 million.
As of 2004, IBiquity has only sold roughly 500,000 radios.

Moving forward, sooner than later, free wireless Internet access,
(wimax) will become a reality, and every dashboard will be Internet
enabled. Ipods or Slacker’s G2 may very well become, the pocket radio
of choice for users 12-34 & 25-54.

With a world wide recession, IBiquity will continue to struggle, sales
of receivers will level off at much lower rates than expected, plus
broadcasters now struggling to keep their main channel afloat, will be
slow to adopt Iboc startups, or offer earth shattering programming
content, beyond jukeboxes and simulcasted stations.

Sources:
http://www.nytimes.com/2008/11/26/bu..._r=2&ref=media
http://www.orbitcast.com/archives/sl...ur-pocket.html
http://www.bridgeratings.com/press_0...vsInternet.htm
http://www.hear2.com/2008/12/is-free...ly-a-year-away.