HD Radio: How Media Consolidation Killed It
HD radio was pitched as the FM upgrade that would save terrestrial radio from satellite and streaming, but two decades later most listeners have never heard of it. Broadcast engineer Tyler Woodward traces the FCC's 2002 approval, iBiquity's royalty driven business model, and how media consolidation left stations with no incentive to actually use their HD2 and HD3 channels. It is a story about broadcasting infrastructure and what happens when corporations stop investing in the tech they were handed.
The first group that I worked for back in 2014 had already shut their HD radio operations down before I got there, which at the time I didn't think much about. A lot of stations had already shut it down. But my chief engineer used to tell me a story about how every few months they'd send someone down to the radio shack at the local mall. you know, just to see how the HD radio receivers were actually selling, you know, see what the stock was, how many were on the shelf, whether anything had been sold. And for a long time, the story was always the same, disappointing,
dusty boxes, staff who didn't know what they were or how to sell them and nobody asking about them. Then one day, the rock station put the cubs on their HD2 channel. The receivers sold out. I think about that story because it tells you almost everything you need to know about HD radio. What it could have been, why it mostly wasn't, and why we're still having this conversation 20 something years after the FCC approved this thing. This is the Tyler Woodward project. I'm Tyler Woodward. I'm a broadcast engineer and today I'm talking about HD radio Opinions are
my own everything here is from my perspective not speaking on behalf of my employer stations networks vendors or anybody else out there To understand what HD radio was supposed to do you have to go back to 2001 2002 satellite radio just launched you had XM and Sirius on the air they're selling subscriptions and they're doing it with digital audio nationwide no static CD quality and broadcasters are looking at this
going Boy, we need an answer to that Europe is rolling out something called DAB digital audio broadcasting dedicated new spectrum shared infrastructure think of it like ATSC 3 .0 Lighthouses listeners buy a new radio and get a clean digital signal by 2026 the UK would be at something like 74 % of all radio listening happening would be on a digital platform. Norway shut off FM entirely back in 2017. That model worked. The US looked at DAB and went, nah, we'll pass. What we got
instead was Eibach in band on channel. Keep the analog signal exactly where it is, just bolt some digital sub -carriers onto the sides of it. Same tower, same antenna, same frequency. The FCC approved iBiquity's version, which they branded as HD Radio in October of 2002. The appeal from the get -go was... obvious. No new spectrum needed. No existing stations would lose their coverage. You go digital on the channel you already
own. The FCC's own order said DAB had no, quote, no active domestic proponent and no appreciable support within the broadcast industry, unquote. Eibach was the only thing any radio station here in the US was willing to build. The pitch to the listener was cleaner digital audio on FM, extra programming on HD2 and HD3, and eventually a path to going fully digital. The receiver would blend seamlessly from digital to analog if you drove out a range. The FM and HD one blending
so You'd never notice the transition better radio same radio stations. No disruption now in Practice, we know the blending didn't work quite as well as it was it was advertised But that was the promise The audio The quality improvement was real. I I do want to give HD radio that on a good signal In a good car with a good stereo, the FM HD1 channel does sound noticeably cleaner than the analog equivalent. I mean, you've got a lower noise floor, no multipath flutter. If you've ever watched your FM signal dissolve in
a parking garage, I mean, HD radio would fix that. until you're too far away, at which point it fixes itself by disappearing entirely. But cleaner than analog FM is not the same thing as competing with a streaming service or a satellite service, which is what HD radio was actually supposed to be doing. By the time HD radio was in a meaningful number of car dashboards 2014 ish 2015 people already had Spotify in their pocket the window had moved The receiver situation
was a mess before we even got to that part every HD radio receiver The chip inside that thing had a royalty attached to it I biquity was a intellectual property company. That was their business model, not licensing the broadcasters, not selling the equipment, collecting royalties on every receiver manufactured. Their CEO, Bob Struble said that when a station went on the air with HD radio, I biquity averaged about a thousand bucks. He called it quote, a wholly material part of our business model, unquote.
The money was in the HD radio chip, which meant HD radio never get cheaper and never get into those $15 radios that you could run down the street and buy at Walgreens. It never showed up in the FM receiver that's sitting disabled inside most smartphones. The station fee itself was actually a one -time flat license, not a cut of your ad revenue, not an annual payment. In 2002, in 2003, Ibequity actually waived it entirely to try to get people on board. After
that, the published rate kept climbing. $5 ,000, then $10 ,000, then 15, peaking around 25 ,000 by 2008. Then in 2010, they cut it back to 10 ,000 with a five -year payment plan. The revenue share kicked in only if you ran sub channels and made money from those. 3 % of whatever new income the HD2 or HD3 channel actually generated. With a minimum of about a thousand dollars per year per channel Your existing FM ad sales were
never touched in that So the cost to a station to go on the air with HD radio Wasn't nearly that bad the equipment conversation. However, that is a real number a hundred thousand dollars, maybe more Probably more, depending on your setup. In the early days, that equipment was absolutely painful. High level combining, that's the part that made a lot of chief engineers look at HD radio and decide, man, that ain't worth the headache. When HD radio first rolled out, you were merging the analog and digital signals, which meant specialized
gear. careful tuning and generating a serious amount of heat for what you were actually getting out of it. The combining hardware itself was big and it ran hot. And if something went wrong, you were troubleshooting a system that most engineers of the time hadn't grown up with. A lot of shops looked at that rack and said, no, that ain't worth it. But that's not where we are anymore Companies like our friends up north not tell I mean they figured this out Their HD multicast plus unit is a completely different Proposition compact it's integrated the exporter and importer
functions that used to require a pile of separate hardware Were consolidated into something that actually fits in a normal equipment room without having to rethink your cooling setup. The barrier to entry in 2026 is a fraction of what it was in 2006. It's actually easier to run HD radio now than it has ever been, which makes the adoption numbers way more painful. because about 20 % of commercial FM stations are actually running it. Just 20%. In top 50 markets, that number
is probably better. Maybe half of full power FMs. Outside the top 50, that number drops off really quick. AMHD largely collapsed. Most stations that tried it turned it off because the the hybrid signal caused interference on adjacent channels. And at night, when AM starts sky -waving hundreds of miles, that interference could carry over and reach stations in the next state. The engineering problems got solved over time, just not on a schedule that would have changed anything. The sub -channels are where I have the most complicated
uh feelings about hd2 and hd3 were really interesting ideas you've got a broadcaster with an existing fm signal and suddenly they can run two or three additional streams of programming on the same channel with no additional over -the -air cost you could feel uh fill a format niche reviving a dead brand Run a foreign language service put a sports affiliate somewhere useful now some of that happened I Heart to their credit ran a nationwide LGBTQ format called pride radio on HD sub channels for years. I think it's still
out there classic rock stations brought back legendary formats public radio stations used HD 2 for classical or jazz student stations, community programming, that would have never have made it onto a primary frequency. But HD sub channels, they don't have an analog fallback like HD1. Drive away far enough from the transmitter and when you lose that digital signal, the sub channel just stops. No blend, no analog version to fall back to. It's just gone. Coverage is significantly smaller than the primary signal
because of that. And over time, a lot of those sub channels quietly became something less interesting than a niche program would have been. Think FM translators. A low power FM signal rebroadcasting an AM station or some sort of syndicated format from an HD2 station. That was getting relayed on the FM side The FCC allows it. It's fine. It's useful But what happened in a lot of markets is the HD2 channel that was supposed to be a new digital content stream became Just a feeder for a translator running an AM simulcast The
sub channel and it exists technically it just isn't doing what the PowerPoint said it would do back in 2001. Which brings me back to the Cubs. The Radio Shack story isn't just some fun trip down memory lane. It's a proof of concept. If you give people content they actually want, content they can't get anywhere else, and they will find a way to receive it. They will buy the box. They will dig through the menu in the car. The technology wasn't the problem that day.
The content strategy finally worked. Most stations never found their version of Cubs baseball. They put up an HD2 channel, ran smooth jazz for six months, got bored and pointed it over to the translator. However, there is a part of the HD radio story that doesn't get enough attention. HD radio can also carry data. I mean, you're probably thinking, well, of course, digital audio data. But no, think actual data services embedded in the digital stream, not just the audio. The most visible part that you might remember is
the song metadata. you know title artists album art on your car display that works and a lot of people use it and don't realize that it's hd radio actually powering it but there was a way more ambitious version of this real -time traffic data when radio stations still carried actual traffic hd radio stations and major markets were broadcasting live traffic Map overlays incident locations travel times embedded invisibly in the HD signal your Vehicles navigation system could receive it with no subscription and no Cellier signal just by being in range of that FM station free over -the -air real -time navigation
data using infrastructure that already existed Now unfortunately that service is long gone The navigation industry moved to cellular and crowdsourced data apps like Waze and Google Maps and Apple Maps. You know, those are updated constantly. Nationwide, no FM coverage required. The HD data layer couldn't compete with that and just sort of phased out quietly. The metadata part survived because it's cheap and nobody's trying to replace that yet. The bigger data ambitions got eaten
by the smartphone market the same way the audio quality story got eaten by streaming. AMHD is another part of this that deserves a separate little moment because There's something genuinely really cool about that. Now, hybrid AMHD, that was a mess. The digital carriers overlapped, caused issues with the adjacent channels, and night when AM signals started doing its sky -waving dance, you could be spreading interference for hundreds of miles. Engineers, to their credit, I mean, they spent years filing complaints with
the FCC about it, trying to get something done. Most AM stations threw in the towel and just turned it off. But the FCC in 2020 did something really cool. They authorized all digital AM. MA3 mode. Drop the analog signal entirely. Go full 100 % digital. A station. and Frederick Maryland WWFD on 820 AM. Engineers tested it extensively with the folks from iBiquity or Xpery, whoever it was at that time. All digital AM without the interference constraints of the hybrid system. And from what I'm told, it's really good. It's
more robust, more consistent coverage. You get stereo on AM again. Song data album art even a secondary channel because you don't have the analog taken up space The station actually charted in Nielsen ratings with a signal that maybe Just maybe 25 % of area cars could actually receive The technology is proven to work Nobody else is doing it though because there's no mandate. There's no sunset date for analog AM There's no incentive for an owner to abandon the signal that reaches every AM radio right now in favor of one that reaches maybe a small percentage of nearby listeners. WWFD is doing it because
Hubbard Broadcasting truly believes in it and well let's be honest has the resources to experiment. The thing they got HD radio approved is the same thing that I think kept it from ever mattering. End band, no new spectrum, backwards compatible, no disruption to existing stations. The FCC looked at DAB in 2002 and said there wasn't spectrum for it. Said the broadcast industry didn't want it. Said it would take years to clear the bands. And they were right. About all of it HD radio
was the thing that could be deployed quickly You got to think at that time the industry was pretty worried about satellite radio but Can be deployed quickly and will move listeners to digital radio That turned out to be two different things Now DAB worked in the UK and Norway and Germany because someone Eventually said hey, we're shutting off FM. Here's the date and here's the date that you need to buy a new radio I mean, that's brutal and Norway listeners weren't exactly
happy about it, but it worked In the US there was never There was never that mandate that forcing function to move people HD radio was always optional here for the stations and the listeners The analog signal stayed on the listeners kept the old radio in the Digital signal rode along behind it for 20 plus years waiting hoping to be noticed The equipment has gotten easier The fees have come down, the technology got genuinely better, especially on the AM side. And none of it changed the trajectory
because nothing ever had to change. The promises, they were real. Better audio, new channels, data services, a path to fully digital. Some of them, I mean, it got delivered. Partially in some markets for some listeners. Most of them are still like me and still waiting The comparison now Isn't the satellite radio? It's Spotify It's Apple music and podcasting the window HD radio Was supposed to fill has been replaced three times over by the internet. I Don't think HD radio is going away It's in way too many cars at this
point. It calls stations literally nothing to leave it on and Xperia has a whole connected car platform built around it now It'll keep existing but The version of HD radio where your FM station sounds better than anything your phone can do Where every market has its cubs? Where the data layer is doing something your navigation? App on your phone can't? Well, that version never arrived. The Cubs sold out that radio shack in little old La Crosse, Wisconsin. The rest of the industry mostly didn't bother to figure out
why. Subscribe on Apple Podcasts, Spotify or iHeartRadio. Yes, I'm even there. Rate and review the show follow me over on Facebook and YouTube at the Tyler Woodward project Instagram threads blue sky. I'm there too at Tyler Woodward dot me Reach out and say hello. Hit me up on you know with any suggestions on content you got Subscribe to the sub stack at sub stack dot Tyler Woodward dot me I'm independent. This is all my own thing. I don't have any sponsors, so if you like the show Show some love or just share it and subscribe to the podcast that helps as well I'll catch you guys next week
