The air war for in-car listeners is spreading. As the satellite radio stations fight for subscribers, and as more drivers cue up their iPods with slick car-stereo interfaces, a new entrant has entered the drive-time marketplace: HD Radio. As HD Radio promises superior sound quality and subscription-free content, auto manufacturers like BMW and Jaguar are perking their ears. Should you?

In simple terms, HD Radio is a digital technology for traditionally broadcast FM and AM radio. HD receivers basically convert the signal of AM and FM from analog to digital, thereby changing sound quality. Proponents say HD-based AM sounds as good as analog FM stations sound today, and that HD-based FM has near-CD quality fidelity.

Additionally, the compressed digital signal opens up the amount of spectrum available to broadcasters, thus allowing single radio stations to broadcast separate content on multiple channels. Called “multicasting,” this means single stations can offer more dedicated programming on several channels nearby on the dial. An example would be stations dedicating new channels entirely to a certain genre of music. For instance, New York’s publicly funded radio station WNYC, which primarily offers news, talk and music programming on its main channel, 93.9 FM, in 2006 began HD-broadcasting an all-classical music station on WNYC2, at 93.9-2 FM.

HD Radio is not subscription-based like satellite radio, so programming comes free. HD Radio is based on the same advertising-based business model as traditional AM-FM (analog) radio. The HD Digital Radio Alliance, a consortium of the traditional major terrestrial radio broadcast companies, persuaded members to initially offer commercial-free programming on the extra digital-only “HD2” channels they enable, to entice listeners to purchase HD receivers. This commercial-free programming will eventually cease, though, some say, at the end of this year.

At press time, iBiquity Digital Corp., the creator of HD Radio technology, said there are more than 1,205 radio stations in the United States currently broadcasting in HD, with more than 600 carrying HD2 multicast programming. According to the alliance, HD2 multicasts have launched in 85 of the nation’s top 100 markets.

Interestingly, the “HD” in HD Radio actually has no meaning. It has come to stand for “High-Definition” in common usage, with an easy reference to High-Definition Television, or HDTV. Although HD Radio uses “Hybrid Digital” technology, according to iBiquity, it does not stand for Hybrid Digital, either.

How to hear HD — the gear

Automakers have been slow to commit to providing factory-installed in-car HD receivers. BMW was the first to officially announce an offering. The Munich-based automaker announced in January it would offer factory-installed HD digital radio receivers as an option ($500) across all its 2007 models. Jaguar recently announced it would offer HD technology in its 2008 XJ Sedan, which will go on sale this fall. And Hyundai announced that its new-for-2008 premium sedan, currently called the Concept Genesis, will offer the technology as well.

The number of manufacturers offering an HD option is expected to grow. “Nine manufacturers and 51 models of cars have committed to — but not announced — implementing HD Radio over the next 18 to 24 months. HD will be in every vehicle in a fairly short period of time,” says Peter Ferrara, president and CEO of HD Digital Radio Alliance.

In the meantime, several off-the-shelf options exist for those who desire to listen to an HD signal in their current car. Receivers range in price from about $199 to $329.

Visteon is selling the plug-and-play HD Jump, which it calls the “only transportable HD Radio receiver available,” that can be used both in the car and at home. HD Jump uses the vehicle’s existing radio antenna and connects either through an auxiliary input on the head unit or through an FM-modulating wire. A car cradle mounts to the dash and front window; a home dock is also available with cradle, power adapter, remote control, antennae and required cables. The Jump is expected to list between $249 and $299 (installed).

Dice Electronics is currently offering HD Dice, an external HD Radio modulator that can be connected to certain auto manufacturers’ factory-installed radios, similar to how aftermarket satellite radio tuners are connected. HD Dice is shipping now for $199, compatible with factory radios from BMW, Mini Cooper, Toyota, Lexus and Scion models. Later this year, Dice says, the module will offer compatibility with vehicles from Buick, Cadillac, Chevrolet, GMC, Hummer and Pontiac as well as Honda and Acura. Dice requires vehicle-specific connectors and a small HD-capable antenna needed to receive the digital AM-FM signals, each of which comes in a package. The main module connects to the vehicle’s available external device connection port. Dice says the HD module offers optional auxiliary device connections, including an available iPod integration cable. Users can select and change HD Radio stations using existing car radio buttons or via steering-wheel controls.

Other aftermarket offerings include the in-dash JVC KD-HDR1 radio, which lists for $329.95. JVC says the 200-watt system has a built-in HD Radio tuner with multicast capability that offers iPod connectivity via an iPod adapter, and one can attach Sirius satellite radio functionality and/or a CD-changer via the system’s “changer bus.” A SIR-JVC1 SiriusConnect tuner for JVC radios lists for $99.99.

Panasonic offers its built-in HD Radio in the CQ-CB8901U disc receiver for $199.99. Kenwood offers the KTC-HR100 HD Radio tuner, which adds HD Radio and multicasting capability to any HD Radio-ready Kenwood in-dash receiver for $199.99.

Like satellite radio, HD listeners can see the title and artist of the song currently playing on the receiver’s readout. But content offerings can vary greatly between satellite and HD programming.

Satellite radio providers say their breadth of programming bests terrestrial radio’s. XM and Sirius combined have more than 300 channels available to listeners all the time. This is compared to the 60-odd AM and FM stations listed as available in the New York tri-state area. Sirius and XM say they offer more personalized music, sports and entertainment programs tailored to genres, nationwide. Doing so, they say, enables them to offer consumers, particularly in the music channels, the surprise of discovery, in that one can enjoy the novelty of listening to artists or songs that are new to them, or relish the freshness of not knowing exactly which artist or song is up next, regardless of where they are.

Paul Blalock, Sirius’ head of investor relations, says: “I consider us more of an on-demand type service, in that you really don’t have to know what you want. You have to know the genre, and it’s programmed for you.”

Steve Cook, XM’s EVP of automotive marketing, says satellite’s advantage goes beyond sound fidelity: “HD Radio is traditional AM and FM radio stations in a local market going to a digital signal, which improves their sound quality. But the main reason people are interested in XM radio is not the digital sound quality, it’s the breadth of all the content we offer. It’s the coast-to-coast coverage advantages, the commercial-free music. We have, we believe, very strong advantages compared to HD Radio.”

Peter Ferrara, president and CEO of HD Digital Radio Alliance, counters that satellite radio’s national footprint means it cannot provide content specific or meaningful enough to the particular place where consumers live, like HD Radio and traditional terrestrial radio can.

Traditionally, terrestrial radio stations are programmed where they’re based, in the same community or region, though Clear Channel has been known to program stations situated in less-populated, smaller markets from outside of their locales.

“Satellite radio is the same channel in New York as it is in L.A.,” Ferrara says. “What the broadcasters have put on the air in HD Radio in New York is totally different than what we’ve put on the air in Los Angeles, because we’ve been able to specifically serve the marketplaces, balancing what is already on the air and what’s missing, and what the consumer population is. There wasn’t a country radio station on the air in New York City, but now there’s one in HD. We didn’t need to put another country station on in Nashville. So that’s the uniqueness of it.

“I also think there is a real sense of community between the listener and the local radio stations,” he adds. “There’s a sense of ‘Hey, they live and work in the same place we do, and they’re involved in our communities,’ whether that’s raising money for children’s hospitals or doing wacky stunts or bringing in concerts or whatever, they’re part of the community, the life in the marketplace. That’s something that HD and only local radio can deliver. Satellite could never pull that off.”