Digital Radio: Big Development for 2001

Radio will finally go digital in 2001. Among the oldest analog media, radio will be the last to make the transition, but it should make much faster headway in the market than digital television has. Satellite digital radio broadcasters XM Satellite Radio Holdings, Inc. and Sirius Satellite Radio, Inc. are both on schedule to go live in the coming year, aided by partnerships with automakers to make digital receivers available as options in new cars. A strong automotive aftermarket for digital radio receivers is expected, with some industry insiders predicting that the first models will retail at approximately $100 apiece. Both XM and Sirius will offer multiple channels of music, news, comedy, sports, and talk show entertainment—all for about $10 per month per subscriber.

Without the obstacle of expensive receiving equipment—a problem that has hindered the pace of the changeover to digital television—digital radio should move quickly once some enthusiasm builds among early adopters. Unlike DTV, which required a separate, wide-bandwidth channel to accommodate it, digital radio signals in North America will share frequency bands with their analog AM and FM counterparts. Receivers may be able to switch seamlessly from analog to digital reception to keep the audio quality as high as possible, as some cellular telephones can do. Additional data, such as information about the song and artist currently playing, or weather alerts for travelers, can be sent along with audio signals.

Radio receivers are among the most popular types of audio electronics, with more than 70 million units sold annually in the US. Adding digital tuners and decoders to existing designs shouldn't add more than a few dollars to manufacturing costs for new models. A growing base of affordable receivers—and, therefore, customers—will make the transition to digital much less traumatic for radio broadcasters than it has been for TV stations. Furthermore, a TV station must invest approximately $2 million in new equipment, studio space, and technical training to put DTV signals on the air by the FCC-mandated target date of 2006. By comparison, upgrading to a digital transmitter costs most radio stations around $50,000. Digital radio is not expected to have the technical problems that have plagued the rollout of DTV.

The first prototype receivers—including some bearing the XM brand name—will be on display at the Consumer Electronics Show beginning Saturday, January 6 in Las Vegas. Motorola will demonstrate its "iRadio," a model with analog and digital capacity as well as the ability to connect to the Internet through cellular networks. Other manufacturers will integrate Global Positioning System transceivers in their digital radios.

The biggest player in the digital radio league is iBiquity Digital Corporation, formerly known as USA Digital Radio, which recently merged with former competitor Lucent Digital Radio. The National Radio Systems Committee (NRSC), an engineering group, along with representatives from both broadcasting and manufacturing, will test the company's technology during the first six months of 2001. If approved by the NRSC, iBiquity's technology will be presented to the Federal Communications Commission for formal consideration as the national standard for digital radio. "The ultimate objective we have is to license technology to all these various industries," explained Robert Struble, iBiquity's CEO.

Now 10 years old, Columbia, MD-based iBiquity was formed by a partnership of Gannet Company, Westinghouse, and CBS, the nation's three largest broadcasters at the time. Investments by broadcasters and technology companies like Texas Instruments have boosted iBiquity's capitalization to more than $100 million.

Other recent digital radio developments include a partnership signed December 18 by Burnaby, BC-based Spectrum Signal Processing, Inc. and BAE Systems North America to provide digital radio products for "signal intelligence" and wireless applications for the defense and commercial wireless markets. On December 15, Emap Digital Radio, Ltd. (a division of Stereophile's parent company Emap PLC) was awarded the local digital multiplex license for Humberside, England by the UK radio authority.