An interesting piece in today's New York Times about HD radio. Better described as "digital radio", the technology allows broadcasters to fit three additional channels in the space now occupied by just one.
A digital signal also allows for much better behavioral targeting for advertisers. Combine this with Google's recent move into radio advertising, and you have a new growth medium for targeted local advertising.
The move towards digital radio will largely be fueled by the new on-demand marketplace. There will be more content choices and more of a pull of content, rather than a broadcast push. The pull is also where targeting can be more acutely executed.
WIRED magazine wrote a great forward looking piece last March which speculated some of the possibilities of digital radio.
From the article:
As listeners select the programs they want to hear, they’re instructing the radio about their interests. "Whenever you pull the dial like a piece of taffy and let more signals come through, you are of course going to get a lot more niches," Griffin says. As a broadcaster, "you make money [running a collection of niche stations] because targeted ad buys are so much more valuable than nontargeted. Traditional media isn’t a great way to reach fly fishermen or people who are in quilting bees, but niches are."
In this TiVo-esque environment, Clear Channel-style mass broadcasting becomes less and less effective.
The technology is in an early adoption stage, and the pricing for necessary hardware reflects that. But the price will come down and it should follow a typical new technology life cycle. When it reaches wide scale adoption, we can expect to see many of the targeting abilities of the web, and of IPTV, manifest in radio.
There is a lot more to it, and we will continue to analyze this interesting area as it develops.