Kelly said:
.....I find it mind-boggling how the HDA can flail around with bizarre promotional schemes, yet not put pressure on Ibquity to reduce, if not eliminate the charges to auto radio manufacturers for the receiver chips. Until the radios begin appearing in the big three automakers as standard equipment, the concept is going to struggle until the HDA and Ibquity run out of money.
I suspect the fundamental problem is this whole idea is based on a flawed business model. Ibiquity wants to collect fees on every aspect of their technology. That looks a lot like a "get rich quick" scheme, and those don't usually work in the long term. In the past, new broadcast technologies have been funded through modest licensing fees, most significantly on the receiver side. This is quite different.
There is nothing wrong with the concept of making money, but if they really want this thing to fly, they need to have something to offer (at a very reasonable cost) to the masses. The current plan is a little like fishing with a hook, but no bait. Hitting up the broadcaster for one fee on top of another is a strange way to come up with a product that induces the general public to purchase new radios. Outside of the large broadcasting companies, many of whom own a stake in Ibiquity, very few broadcasters have been in much of a hurry to adopt this technology. There is a good reason for that. The only exceptions to that is the public broadcasting segment, but remember that those installations received a subsidy to be implemented.
The reason for most broadcasters’ reluctance is simple: money. Out of the 12,000+ radio broadcasters out there, roughly 25-30% are in major markets and/or are owned by major conglomerates. The rest are smaller groups or independent operators. To a station grossing $25 million a year, spending $100K or even a lot more on a HD upgrade is no big deal. To a station that bills $1 million (or less) per year, it is a much more significant investment. It had better pay them back. The plan is even more out of whack if there are very few radios around to receive these new digital transmissions. It is simply not attractive to the medium and small broadcaster. I know some of you will say "the stations out of the top 100 markets don't matter." I submit that they do.
If Ibiquity wants this thing to fly, they should drop (or at very least, significantly reduce) all licensing fees to the broadcasters and broadcast equipment manufacturers. In fact, subsidizing a station's change over might have been a wise move. It's probably too late to do that, but in hind sight, it might have been a good idea. They should also scale back on their fees charged to receiver manufacturers. Most people are price sensitive when they make purchases, whether it is for a new radio or for a new car. I'd rather have ten or fifteen cents for each of several hundred million radios sold than twenty five dollars for each of a couple of hundred thousand radios that tanked the long term viability of my product.
Regardless of the technical merits (or lack thereof) of this system, I believe the Ibiquity's own business plan has done little to help their cause.
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