Digital Radio - Free vs. Paid?

HdradioI’ve blogged so much about HD Radio that most readers have probably tuned me out by now.

Most longtime readers know that I am an investor in and a board member of iBiquity, the developer of the HD Radio standard that the broadcast radio industry is using to convert their industry from analog to digital.

I pay a lot of attention to the comments I get on my blog posts. It’s my way of getting an education from all of you.  And I’ve heard plenty say that broadcast radio is dead and satellite is the future.

But I’ve always felt that paid radio can’t beat free radio and last week we got some data substantiating that.

JD Powers, a leading market research firm in the automotive sector, published their 2005 study on U.S. Automotive Emerging Technologies last week.

They found some interesting things in surveying consumer’s views on HD Radio and satellite radio.

Here is the headline:

Premium surround sound systems and
high-definition (HD) radio are highly attractive features consumers
would like to see in their new vehicles based on their estimated market
prices, and consumers prefer to pay a one-time fee over a monthly
subscription for satellite radio.

Apparently consumers don’t like monthly fees for radio.  Here is another quote:

"Even though satellite radio is at an advantage
over HD radio by offering commercial-free content and coast-to-coast
coverage, interest in HD radio is higher than satellite radio after the
introduction of price," said Wu. "In general, consumers would rather
pay once for a feature and have been reluctant to embrace subscription
fees. This is evident in the trade-off exercise in this year’s study in
which almost twice as many consumers chose lifetime (life of vehicle)
satellite radio with a one-time $499 subscription fee compared to a
one-year option."

Maybe this survey will prompt Detroit to wake up and start offering HD radio as a standard option on new models, like they do with satellite radio.

At least I sure hope so.

#VC & Technology