Many of the biggest radio companies are speeding up their plans to bring digital radio to the masses, according to a report Thursday from The Associated Press. That's a smart move, given the disruptive technologies that have been altering the musical landscape. But is it enough?
According to the article, companies like Viacom (NYSE:VIA) and Clear Channel (NYSE:CCU) plan to increase their implementation of new digital "high definition" broadcast standards. Listeners will be able to enjoy music that sounds much better than analog radio -- think CD quality -- without the usual interference and fuzziness.
The faster rollout is probably wise, given how slowly the technology has been adopted to date. Only 600 out of 10,000 radio stations already offer the high-definition content. Although this digital content will be free, the article states that consumers will still need to buy "pricey" digital radio receivers to listen.
The corporations involved in radio certainly need to offer a more compelling product. Many listeners have likely abandoned radio in favor of our Apple (NASDAQ:AAPL) iPods, which can pump customizable playlists through car speakers via a variety of add-on gizmos. Consumers are also showing continued interest in satellite radio providers XM Satellite Radio (NASDAQ:XMSR) and archrival Sirius (NASDAQ:SIRI).
I know many people are more bullish about traditional radio than I am; some will argue that there may be value in those unloved stocks. Indeed, local content continues to give traditional radio an edge, since most people would rather hear about news, traffic, and weather in their own neck of the woods. But in my opinion, most corporate radio has become awfully stale, driving users to defect to digital players, satellite radio, and even Internet radio at home or work. Digital radio will need compelling content to truly succeed -- otherwise, if users need to buy expensive receivers to receive the digital content, why wouldn't they just switch to satellite instead?
At any rate, it's obvious that traditional radio's big names are trying hard to keep up with the times. Just last week, Clear Channel announced plans to offer video podcasts for some of its radio shows. It remains to be seen whether digital radio offerings can woo back drifting listeners, but investors in traditional radio providers will probably be pleased to see those companies try to update their fare.
For more on radio, see the following Foolish broadcasts:
- Clear Channel is trying to get hipper.
- Fools dueled about XM Satellite Radio not too long ago.
- Last spring, one Fool said: Long Live Radio.
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Alyce Lomax does not own shares of any of the companies mentioned.
