It may seem like a shot through the heart for Sirius (NASDAQ:SIRI). Ford (NYSE:F), one of the automotive heavies that has ramped up its car lines to include Sirius satellite receivers, announced this week that nearly all of its 2008 model year cars will have an option to add HD Radio receivers. It's the first major American automaker to embrace the HD Radio standard.
HD Radio is terrestrial radio's response to satellite radio, offering a free alternative in the form of digital quality sound that gives local radio operators the ability to broadcast different channels within the same broadcast frequency.
Free may sound better than the $13 a month that you're currently paying for Sirius, but this is still ad-driven terrestrial programming. In other words, you won't find Howard Stern, dozens of commercial-free music stations, or all of the NFL games on HD Radio.
It's an interesting wrinkle because it will be a challenge for Sirius. In an effort to prove that its proposed merger with XM (NASDAQ:XMSR) wouldn't be a monopoly, the satellite radio operators can now point to automaker installations of HD Radio receivers -- just as they have with the trendy addition of jacks for Apple's (NASDAQ:AAPL) iPods -- as proof that they would not be a monopoly.
It's a sound argument, no matter how many different opinions you try to stream through the same frequency. So go figure. Terrestrial's lifeline in HD Radio may wind up being its own noose.
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