BusinessWeek has a good article today on the state of HD Radio and hurdles that terrestrial radio face in spurring adoption.

One interesting section of note:

The problem for the broadcasters, who continue to see their audience become fragmented and struggle to boost ad revenues, is that HD radio "is not a new offering. It's a defensive move," says Ted Schadler, an analyst with Forrester Research (FORR). "It's better radio, but it's not a whole lot better radio." He calls it a replacement product and likens it to the transition from black-and-white to color TVs.

"People still got a picture and their shows on black-and-white so they waited until their sets went on the fritz. Then they bought a color TV." For 2007, the industry will sell a few HD receivers, but 10 years from now, everyone will have one. "It's that kind of thing. It will happen without a ripple," says Schadler. 

The only difference with this analogy is that color TV was "cool" - HD Radio, in this rapidly evolving technological environment - is being challenged by a heck of lot of other "cooler" things.

Now let's flip it around (because I can't bring up HD Radio without talking about Satellite Radio)... what about satellite radio isn't "cool" enough to the consumer?

[BusinessWeek]

HD Radio was just launched in 17 new markets as part of the HD Radio Alliance's national rollout. With the addition of these markets, this brings the tally up to 85 new markets in the past year.

"That means there are now more than 600 new radio stations on the air with HD2 programming that is unique, diverse and local to each market," said HD Digital Radio Alliance President/CEO Peter Ferrara.

Yep, that's 600 new stations broadcasting HD2 programming, with 320 stations in 81 markets owned by Clear Channel. Programming that, as MediaWeek points out, requires station owners to "research and program, in earnest, the HD stations that today are not getting serious attention."

Serious attention is right. Some of HD2 stations in my area only seem to broadcast the same exact thing as the HD1 stations... or just the lovely sound of silence. Only a handful provide unique HD2 content.

Not exactly the best way to attract an early-adopter audience.

According to a recent study by Bridge Ratings, the percentage of respondents who would be interested in purchasing an HD Radio has dropped in the past six months.

As a result Bridge has reduced their original projections for full year 2007 HD Radio sales from 2.1 million to 1.5 million total HD Radio units sold. The study also shows that "awareness" of HD Radio is on the rise, something that terrestrial radio fanboys trade publications would rather focus on, though they are completely ignoring the reduction in full year sales estimates.

Oddly enough, while "awareness" of HD Radio is climbing, knowledge of what exactly HD Radio does is on  the decline. This most likely has to do with the brand confusion between HD Radio and HDTV. Everyone knows what HDTV is, so it's a pretty simple jump to be aware of HD Radio - so perhaps general awareness of the term "HD" is just on the rise itself.

One thing I'd like to kindly point out to the boys at Bridge Ratings. In their 2nd question they asked respondents: Do You know what HD or High Definition Radio is or what it does? - this question in syntactically incorrect. The fact is, the "HD" in "HD Radio" doesn't stand for "high-definition" as it's television brethren does.

As Peter Ferrera, president and CEO of the HD Digital Radio Alliance said, "Quite honestly, it [HD Radio] doesn't stand for anything. The concept was somewhat of a steal from HD television, where viewers know it means better quality"

And Bridge's study punctuates that point.

Introducing HD Radio's answer to the plug-and-play radio, the Visteon HD Jump. With HD Radio OEM units running a cool 500-clams, a cheaper add-on solution is necessary (because, y'know, market demand is so high). So the HD Jump is here to supply the yearning masses for all their HD Radio needs.

Now this is state-of-the-art technology here folks. The HD Jump offers a full spectrum of features, including "real-time" song title, artist and album information (amazing!) plus the HD Jump has multicasting capabilities (if you can find one).

Note the gorgeous, and modern-looking, monochromatic display. The six preset buttons allow you to store up to 18 different stations (if you can find them). I liken the large tactile control knob to that of the iPod - just spin it and select what station you want to listen to!

The HD Jump features an FM modulator, so you can interface with your regular car or home radio. Sure, you'll be going from "crystal-clear" HD digital radio back to analog FM radio, but it's worth it to get all that compelling content.

The thin profile is quite attractive and would hardly be noticeable on your dashboard. With the built-in AUX jack so you can plug in your iPod, the HD Jump does it all!

The HD Jump is expected to retail for only $200, and should be available this Spring. Can't wait!