While many in this group opine on iBiquity’s technology, both positive and negative,
there is a much bigger story to HD radio, starting with Satellite radio.
Broadcasters didn’t launch Iboc because they knew digital technology was the future of radio, it started with satellite broadcasters doing what some said couldn’t be done. Sat radio, convinced listeners to pay a monthly fee for radio. For the first time in history, terrestrial radio’s users, broadcasters listeners, were coughing up $12.99 a month to hear the naughty ramblings of Howard Stern, opinions of Larry King or adult contemporary music, that’s always been a free over the air service. Think of this, roughly 18 million terrestrial radio users, broadcasters listeners, are also paying monthly services fees to XM & Sirius to hear music and talk formats. I’ve said broadcasters listeners, more than once, to illustrate the deep-seated feelings of contempt, that must be felt towards sat radio, by the arrogant kings of the air, but that’s another story.
Broadcasters will never admit this, but between you and me they had to be impressed
and envious of satellite radio’s pay to play revenue model. Industry titans were chomping at the bit, over the prospect of developing their own subscription radio model.
Enter Bob Struble, IBiquity, a compnay created by broadcasters and investors. Thus quicker than the eye can see, broadcasters pulled a magical rabbit out of their hat, called digital licensing rights and shazam, they’ve invented pay to play radio, sold as free digital radio. IBiquity charges broadcasters, annually thousands, for Iboc digital licensing rights, plus manufactures pay a one time licensing free, that passed onto consumers, for each receiver. Think of it, 235 million people weekly listen to terrestrial radio, and Americans own 7-8 radios per household. The potential numbers and profits from digital licensing and traditional advertising revenues are positively huge!
Unfortunately, gadget-loving, credit card rich Americans have been slow to upgrade their traditional analog receivers. Less informed radio users, average people, have misconceptions, believing HD and sat radio are one in the same. My marketing hat tells me, people remember whose fist in a category and don’t care who’s second, and HD is second.
Bridge Ratings estimates that Internet radio will have 180 million listeners by 2020, 250 million will still be listening to terrestrial radio, but HD will have less than 10 million.
As of 2004, IBiquity has only sold roughly 500,000 radios.
Moving forward, sooner than later, free wireless Internet access, (wimax) will become a reality, and every dashboard will be Internet enabled. Ipods or Slacker’s G2 may very well become, the pocket radio of choice for users 12-34 & 25-54.
With a world wide recession, IBiquity will continue to struggle, sales of receivers level off at much lower rates than expected, plus broadcasters now struggling to keep their main channel afloat, will be slow to adopt Iboc startups, or offer earth shattering programming content, beyond jukeboxes and simulcasted stations.
Sources:
www.nytimes.com/2008/11/26/business/media/26adco.html?_r=2&ref=media
www.orbitcast.com/archives/slacker-g2-review-radios-future-in-your-pocket.html
www.bridgeratings.com/press_08.08.07.HDvsInternet.htm
www.hear2.com/2008/12/is-free-wireless-broadband-everywhere-only-a-year-away.html
there is a much bigger story to HD radio, starting with Satellite radio.
Broadcasters didn’t launch Iboc because they knew digital technology was the future of radio, it started with satellite broadcasters doing what some said couldn’t be done. Sat radio, convinced listeners to pay a monthly fee for radio. For the first time in history, terrestrial radio’s users, broadcasters listeners, were coughing up $12.99 a month to hear the naughty ramblings of Howard Stern, opinions of Larry King or adult contemporary music, that’s always been a free over the air service. Think of this, roughly 18 million terrestrial radio users, broadcasters listeners, are also paying monthly services fees to XM & Sirius to hear music and talk formats. I’ve said broadcasters listeners, more than once, to illustrate the deep-seated feelings of contempt, that must be felt towards sat radio, by the arrogant kings of the air, but that’s another story.
Broadcasters will never admit this, but between you and me they had to be impressed
and envious of satellite radio’s pay to play revenue model. Industry titans were chomping at the bit, over the prospect of developing their own subscription radio model.
Enter Bob Struble, IBiquity, a compnay created by broadcasters and investors. Thus quicker than the eye can see, broadcasters pulled a magical rabbit out of their hat, called digital licensing rights and shazam, they’ve invented pay to play radio, sold as free digital radio. IBiquity charges broadcasters, annually thousands, for Iboc digital licensing rights, plus manufactures pay a one time licensing free, that passed onto consumers, for each receiver. Think of it, 235 million people weekly listen to terrestrial radio, and Americans own 7-8 radios per household. The potential numbers and profits from digital licensing and traditional advertising revenues are positively huge!
Unfortunately, gadget-loving, credit card rich Americans have been slow to upgrade their traditional analog receivers. Less informed radio users, average people, have misconceptions, believing HD and sat radio are one in the same. My marketing hat tells me, people remember whose fist in a category and don’t care who’s second, and HD is second.
Bridge Ratings estimates that Internet radio will have 180 million listeners by 2020, 250 million will still be listening to terrestrial radio, but HD will have less than 10 million.
As of 2004, IBiquity has only sold roughly 500,000 radios.
Moving forward, sooner than later, free wireless Internet access, (wimax) will become a reality, and every dashboard will be Internet enabled. Ipods or Slacker’s G2 may very well become, the pocket radio of choice for users 12-34 & 25-54.
With a world wide recession, IBiquity will continue to struggle, sales of receivers level off at much lower rates than expected, plus broadcasters now struggling to keep their main channel afloat, will be slow to adopt Iboc startups, or offer earth shattering programming content, beyond jukeboxes and simulcasted stations.
Sources:
www.nytimes.com/2008/11/26/business/media/26adco.html?_r=2&ref=media
www.orbitcast.com/archives/slacker-g2-review-radios-future-in-your-pocket.html
www.bridgeratings.com/press_08.08.07.HDvsInternet.htm
www.hear2.com/2008/12/is-free-wireless-broadband-everywhere-only-a-year-away.html
