(FORTUNE Magazine) – Satellite providers are making inroads ...

As conglomerates like Clear Channel and Infinity Broadcasting gobbled up local radio stations over the past decade, programming variety dwindled, and listeners started tuning out. Enter satellite radio, which for a monthly fee beams hundreds of crystal-clear commercial-free channels. Content varies from Brewers games to Martha Stewart's tips--a godsend for the choice-obsessed. First installed in cars, satellite radios are now available at home and even in a version small enough to strap to your arm.

but conventional radio is fighting back.

Regular radio is banking on high-definition broadcasting, which delivers sound quality comparable to satellite plus the ability to double or triple the number of existing channels--all with no subscription fees. HD radio is being tested now; expect the battle to heat up next year. Caveats: HD radios are pricey; HD carries commercials; and HD "will still be confined by local economies," says Bob Peck, a Bear Stearns analyst. "If there isn't enough local advertising to support a polka station, there won't be one."