As HD Radio braces for a sliver of success – adding advertisers and a new wave of portable receivers – critics say tight control by big radio companies at the top is smothering the fledgling industry's chances.

"Radio's most popular formats were created by radio rebels, outlaws, misfits and ne'er-do-wells – not by corporate marketing executives," says Robert Hughes, co-owner of San Diego rock station KPRI, which has no immediate plans to broadcast in HD.

Over the last two years, about 1,500 U.S. radio stations have made the leap to digital broadcasting, terrestrial radio's response to the overwhelming success of the iPod and the threat posed by satellite radio. The technology – known as HD Radio, although the letters don't stand for "high definition" or anything else – allows stations to broadcast in higher fidelity and offer secondary channels to listeners with special digital radios.

Stations spend an estimated $100,000 each to upgrade their transmitters to carry digital signals, according to the HD Digital Radio Alliance trade group, which is dominated by huge radio companies.

But so far, digital radio has generated nearly no buzz. HD Radio technology company iBiquity Digital estimates about 200,000 HD radios were sold last year, and predicts between 1 million and 1.5 million will be sold this year.

But car manufacturers are beginning to offer digital radios as an option, and home sets are becoming cheaper, although they're still plagued by reception problems.

Peter Ferrara, the trade group's president, says another development will spur HD Radio's success: a less power-hungry digital radio chip, to debut at the Consumer Electronics Show in January.

Another sign that HD Radio is gaining traction: The trade group announced last Monday that it will, for the first time, allow advertisers to underwrite blocks of time on the hundreds of subchannels that piggyback onto parent stations' digital signals.

There could be "a BMW oldies station, a Starbucks coffee channel," says Ferrara.

The group still won't allow actual commercials on the subchannels, however, and DJs remain rare. Plus, members of the alliance cannot offer formats – say, oldies from the 1980s – on their subchannels if duplicate formats already exist in their local markets.

"There's not much free market there, is there?" says program director John Decker of San Diego public radio station KPBS, which broadcasts in HD but isn't a member of the trade group.

But Ferrara says the alliance just wants to support "a diverse ... array of unique content."

Many of the formats currently broadcast on digital subchannels would probably never survive on a profit-hungry radio station. Subchannels in cities from Syracuse, N.Y., to San Antonio feature a syndicated gay-oriented format created by the monolithic Clear Channel chain. Elsewhere, subchannels offer up Irish music, "tropical, reggae and beach music," and 24/7 comedy.

To KPRI's Hughes, this focus on niche programming sounds like satellite radio, which is not doing well. The premise for HD Radio "is under a pretty serious cloud," he says.

As for commercials and DJs, industry analysts say they should have been on subchannels from the beginning because listeners expect them.

"The myth is that (listeners) find the DJs annoying," says radio consultant Donna Halper. "They find them annoying when they babble endlessly."

Despite HD Radio's slow and possibly flawed start, Ferrara says the technology will take off in time.

"FM radio took 10 to 15 years to get its footing," he says. "I don't think HD Radio will take nearly that long."