Getting HD Radio off the ground isn’t easy. People are still wed to AM/FM radio. And HD Radio faces tough competition from iPods, music on mobile phones, and satellite radio. But iBiquity Digital is laboring to get HD Radio adopted.
The Columbia, Md., company is in the process of raising a $15 million fourth round of venture capital, VentureBeat has learned.
Investors include Grotech Partners in Timonium, Md.; J.P. Morgan in New York; New Venture Partners in Murray Hill, N.J.; and Pequot Private Equity Fund in Westport, Ct.
The company has had a long history in trying to bring high-definition digital sound to the free radio airwaves. It started as a joint venture, USA Digital Radio Partners, in 1991 between CBS, Gannett, and Westinghouse. It won the support of 15 broadcasters in 1998 and in 2000, iBiquity was formed through a merger between USADR and Lucent’s digital radio business.
Now a bunch of partners are selling HD Radios for both homes and cars. Demand has been slow to take off, in part because 200 million or so people still prefer the older AM/FM radio. At the recent Consumer Electronics Show, a bunch of licensees of iBiquity were showing off a cool new feature: iTunes tagging. With radios from companies such as Polk Audio, users can push a “tag” button when they hear a song they like. Then the radio can send the request to an iPod plugged into the radio. The iPod then transfers the request to iTunes and the user can buy the song. Ten different companies showed off the iTunes tagging feature at CES.
It’s not clear whether this is enough to make HD Radio appealing. There are more than 1,500 radio stations now broadcasting in HD, so the choices for consumers are growing. The company has raised an estimated $115 million in three earlier rounds.
The current investors among broadcasters include: ABC, Beasley, Bonneville, Citadel, Clear Channel, Cox Radio, Cumulus, Emmis, Entercom, Gannett, Radio One, Regent, Saga, Susquehanna, Univision and Viacom. Other investors in manufacturing are: Ford Motor Company, Harris Corporation, Texas Instruments and Visteon Corporation. And financial investos are: Grotech Capital Group, Intel Capital, J.P. Morgan Partners, New Venture Partners and Pequot Capital. The company declined to comment.
