The launch officially began this week in Cedar Rapids, where one station is already broadcasting in digital.
Local engineer Nathan Franzen, 25, became the first to have a digital receiver installed in his car, a 2001 Pontiac Grand Prix. The small black radio by Kenwood USA is about the size of a regular car stereo and costs $350.
"I'm proud I could be part of this. And I think back what it must have been like to be the first person to buy an FM radio and this is something similar," Franzen said. The first song he heard on the new stereo was "Hey Ya!" by Outkast.
Digital, high-definition service has been touted as one of radio broadcasting's biggest advances in nearly a century.
Unlike satellite radio, a subscription service that also uses digital signals, digital radio represents a technological upgrade of the free service offered by traditional "terrestrial" broadcasters.
In addition to providing CD-quality sound, high-definition radio receivers can display whatever text broadcasters choose to offer.
"There's not been anything this technologically important to radio since FM," said Laura Behrens, an industry analyst with Gartner Inc. "Everything we know about media is going from analog to digital, and radio is the last to really take that step."
Several manufacturers are set to show off digital radio receivers at this week's gigantic Consumer Electronics Show in Las Vegas.
The digital broadcasting technology was designed by Columbia, Md.-based iBiquity Digital Corp., a private company partially owned by such media heavyweights as ABC, Clear Channel and Viacom.
Digital radio has been used for several years in Canada, Israel and parts of Europe. In the United States, the Federal Communications Commission voted in October 2002 to adopt iBiquity's technology as the standard for digital broadcasts, and allowed radio stations to begin broadcasting digital signals in addition to traditional analog signals.
Stations eventually will be able to broadcast two separate FM programs on one channel simultaneously, thereby offering customers more programming options. Listeners also will be able to save their favorite tunes and programs and replay them when they want.
"Think of it as the transition from black-and-white TV to color TV," said Bob Struble, president and CEO of iBiquity Digital. "The move to digital means better quality."
Only about 300 of the United States' 13,000 radio stations have become licensed for digital, but Struble said that covers 100 markets, including New York, Los Angeles and Chicago — and smaller cities such as Cedar Rapids.
Digital receivers like Franzen's Kenwood model also pick up AM-FM analog radio. If the radio strays from the digital service area, it seamlessly switches over to analog reception so the listener doesn't get cut off from the broadcast.
Behrens said that while the transition to FM radio required broadcasting stations to install new transmitters, adding digital radio equipment isn't nearly as large an investment.
Does that mean death for analog radio?
Struble said that just as it took time for CDs to replace cassette tapes, so will digital take some time to make its way into American homes, where the average family owns about six AM-FM radios.
"We're trying to change something that's been around for 90 years and is in every single American home and part of every single American life," he said. "The challenge of trying to change all of that ... is a long-term proposition."
Analysts also expect that digital receivers will primarily remain an aftermarket product for cars, instead of becoming standard equipment, for at least a few years.
The new high-definition radios will have to compete with the nation's two satellite radio services, Sirius and XM, which now claim nearly 1.5 million subscribers and offer largely commercial-free broadcasts of music, sports and talk throughout the country. Satellite tuners can be purchased for less than $200, though the services generally require a monthly subscription of at least $10.
Behrens said she didn't expect digital radio to significantly threaten satellite services. She noted that people pay extra for cable TV, for example, because of the programming choices.
Struble and other digital radio masterminds said they chose Iowa to unveil the commercial product because Cedar Rapids' KZIA-FM was sending out digital broadcasts; because Iowa is home to radio pioneer Arthur Collins; and because of Iowa's precinct caucuses that kick off the presidential nominating season.
After a ceremony in which he got a certificate for being first to buy the new technology, Franzen said he planned to spend the drive home doing what else — listening to the radio. However, he said he would be "pretty busy trying to figure out the new buttons."