Digital Radio Update - January 9, 2008


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Index:


News

HD Radio Alliance Tops Spot Count in 2007, Signs Idea City for 2008
The HD Digital Radio Alliance took first place in the Media Monitors annual count of national radio spot totals for 2007, with the remarkable sum of 1,451,036 units run. By comparison, the second-highest number of radio spots to run nationally was Geico insurance, with 1,397,673 units. The number represents the total amount of inventory donated by every station participating in the Alliance's partnership to promote HD Radio.

Radio promotion is likely to heat up even more in 2008, as the Alliance announced plans to team with GSD&M's Idea City to create a radio campaign representing a media value of more than $230 million in radio airtime in the country's Top 100 markets. The year-long campaign is set to begin this month.

An Alliance press release states that Idea City came to the attention of the Alliance earlier this year when Idea City client BMW launched a campaign focused on its rollout of HD Radio units in its cars. The success of that creative effort is said to have resulted in a measurable increase in HD Radio adoption by BMW buyers and enhanced partnerships with other auto manufacturers including Volvo, Ford, Hyundai, MINI and Jaguar.

The marketing strategy highlights HD Radio as the replacement technology capable of delivering on consumers' demands for improved quality and increased choice without paying a monthly fee. Using a humorous approach, the initial creative features desperate voice messages to a guy from his old analog radio, which is voiced by Tom Kenny, the voice of Sponge Bob Square Pants. The old radio urges the guy to ignore the more compelling features and benefits of HD Radio. The spots highlight HD Radio retail partners including Best Buy, Wal-Mart, Radio Shack and Crutchfield, and HD Radio device manufacturers including Polk, JBL, JVC and Dual. Listen to the latest spots at www.HDRadioAlliance.com.


Ford Factory HD Radio Slated for 2009 Delivery
Ford Motor Company has announced that it will offer factory-installed HD Radio technology as a standard or optional feature on Ford, Lincoln and Mercury vehicles beginning in 2009, making the company the first among America's traditional "Big Three" to add factory-installed digital radios to its line.

"The great local content, crystal-clear sound quality and variety of channels and data services offered by HD Radio is exactly what customers are beginning to expect in their vehicles," said Jim Buczkowski, Ford director of electrical system engineering. "Moving forward, a radio will no longer be considered competitive if it doesn't include digital technology."

Prolonged delay in HD Radio's adoption as an OEM standard by top-selling auto brands had been cited by many industry observers as a serious impediment to consumer acceptance of the technology.

Ford's announcement follows on the heels of a decision just months ago to offer HD Radio as a dealer installed/retrofit option throughout most of its product line including some pre-2008 models.


Business

Ibiquity to FCC: Level the Playing Field if XM/Sirius Merge
If the FCC green-lights the contested merger between satellite radio providers Sirius and XM, it has an obligation to prohibit anti-competitive deals with automakers by an emerging satcast monopoly and mandate the inclusion of HD Radio decoders in new satellite-equipped radios sold in the US. At least that's the view of IBOC digital radio developer Ibiquity Digital, as presented to key members of the FCC's Media Bureau, International Bureau and Office of General Counsel by company attorneys during a Dec. 19 meeting.

While specific details of the discussion between Ibiquity General Counsel Albert Shuldiner and Corp. Counsel Robert Mazer with 11 FCC staff members have not surfaced, a letter describing the basic thrust of Ibiquity's ex parte presentation was filed on Dec. 20 in accordance with federal disclosure requirements. The letter is now part of a ponderous collection of 11,645 separate pieces of correspondence filed in regard to the hotly contested merger between the nation's two satellite broadcast providers.

In essence, Ibiquity takes no stance on how the FCC ought to proceed with the decision. Rather, the company suggests a merged Sirius/XM would, as a monopoly, be in an enhanced position to manipulate automakers through special receiver incentive programs and exclusivity agreements that might preclude or at least delay the arrival of HD Radios as OEM equipment in major domestic and import car brands, noting such practices already exist. In order to fully insure that anticompetitive practices by a merged satellite broadcaster will not be exacerbated, Ibiquity suggests that the FCC require bundling of HD Radio technology in every new U.S. car radio equipped for satellite reception as a precondition of the merger.

While such a sweeping measure would be controversial and almost certainly subjected to legal challenge, it would not be without precedent. V-Chip technology was mandated for most TV sets sold in the U.S. after the Telecom Act of 1996, and was seen by some as a quid pro quo in exchange for greatly relaxed ownership limitation on cable and broadcast TV contained in that same legislation.

No clear deadline now exists for the FCC's decision on the Sirius/XM merger. Although FCC Chairman Kevin Martin said in September that he was committed to moving forward with an up/down vote on the merger before the end of 2007, the Commission's self-imposed 180-day shot clock on the proceeding ran out on Dec. 5.


IBOC Across America

IBOC by State: New Hampshire
Ibiquity has a list of stations with licensed HD Radio technology and notes those on the air now. IBOC by state looks at various states and lists the stations making the transition. There are nine stations in the Granite State broadcasting nine HD Radio channels. None of them are transmitting multicast signals.

MarketCall FreqHD1 FormatOwner
ConcordWEVS-FM 88.3News/Talk/InfoNew Hampshire Public Radio
ConcordWEVO-FM 89.1News/Talk/InfoNew Hampshire Public Radio
KeeneWEVN-FM 90.7News/Talk/InfoNew Hampshire Public Radio
KeeneWKNE-FM 103.7AC/Top40Saga
KeeneWZBK-AM 1220Music of Your LifeSaga
Lebanon-Rutland-White River Junction, NH-VTWEVH-FM 91.3News/Talk/InfoNew Hampshire Public Radio
ManchesterWZID-FM 95.7ACSaga
Portsmouth-Dover-RochesterWUNH-FM 91.3AlternativeUniversity of New Hampshire
WinchesterWINQ-FM 98.7CountrySaga

Eye on IBOC

Looking Back, 2007 a Mixed Bag for HD Radio
Had broadcasters been asked to raise a celebratory toast to HD Radio on New Year's Eve, they might easily have asked themselves whether their glasses were half empty or half full. To be sure, quite a lot happened on the digital radio front in 2007, and much of that can be placed squarely in the plus column. But IBOC's critics -- and there seem to be an abundance of them out there -- point out that what didn't happen this year was at least as telling as what did.

To identify some specific points made by naysayers, one needs look no further than a Dec. 3 twice.com article entitled HD Radio: Will More Awareness Translate To Sales?

Author Amy Gilroy noted that while the level of awareness of HD Radio reported by consumers is up sharply in the last 12 months, receiver sales don't seem to be pacing those gains. Not surprisingly, issues cited by receiver manufacturers and retailers include weak demand, ineffectual promotion and average product price points that remain well above $100.

Not all the criticism of HD Radio came from the consumer side, as an article in Radio and Records magazine quoted two noted radio research consultants who mused that HD Radio amounts to a dangerous distraction during a period when broadcasters ought to be addressing more fundamental problems with content. Though their comments drew flak from HD Radio boosters, a number of industry notables echoed similar concerns.

New issues with the potential to negatively impact the digital adoption process also cropped up in 2007. Recent introduction of legislation that would impose per-song performance royalties could present a crushing financial burden for HD Radio multicasters, while a pending XM/Sirius merger might allow the emerging monopoly to hold back the introduction of OEM HD radios in some major car brands for still another agonizing year. And the launch of 24-hour AM IBOC digital operation was tainted when major group owner Citadel unexpectedly shutdown its digital AM signals in the face of interference complaints.

On the positive side of the coin, 2007 saw a veritable flood of HD Radio products enter the market -- many with attractive prices -- while the number of HD Radio broadcasters carrying multicasts hit critical mass in many large radio markets. Factor this in with new retail outlets for HD Radio receivers and it becomes clear that programming and product availability are no longer obstacles to digital radio's adoption. Even the vaunted Ipod was leveraged, as several new digital receivers with Itunes tagging technology made their way to market.

Ancillary technology for HD Radio also made some strides. Conditional access made subscription services doable, while data importer systems were refined and streamlined. A number of innovative new processing and monitoring tools were also introduced, easing the burden of HD Radio technology management.

Of course, 2007 also brought the FCC's release of a long-awaited Second Report and Order, First Order on Reconsideration and Second Further Notice of Proposed Rulemaking on digital radio broadcasting. And though the rulemaking codified, simplified, and optimized IBOC operation on both AM and FM, it did pose some significant questions about what the FCC might ask of broadcasters in return.

So, with another year of history in the books, most major radio groups appear to remain committed to the IBOC digital transition. HD Radio Alliance members continue to donate record levels of spot inventory for HD Radio promotion even as operators make ongoing investments in the required technology upgrades.

Even so, questions linger as 2008 begins. Will this be the year that HD Radio turns the corner, or the year our industry begins turning its back on HD Radio?


HD Radio Terminology

The New Language of HD Radio
amplitude modulation (AM): Modulation in which the amplitude of a carrier wave is varied in accordance with the amplitude of the modulating signal.

emissions mask: A specification for the maximum permissible power spectral density of radio frequency emissions, including those within the necessary bandwidth, out-of-band domain and spurious domain.

protocol data unit (PDU): A protocol data Unit is the generic name for any assembled data element in the IBOC protocol stack produced by a specific layer (or process within a layer). The PDUs of a given layer may encapsulate one or more PDUs from the next higher layer of the stack and/or include content data and protocol-control information originating in the layer (or process) itself. The sequence of assembling PDUs within PDUs as they propagate down the transmission protocol stack is reversed, recovering PDUs from within PDUs as they propagate up the protocol stack at the receiver.


Products

Phillips Launches Single-Chip Multi-Standard Radio Solution at CES 2008
NXP Semiconductors, a division of consumer electronics giant Phillips, is demonstrating a single chip that combines decoding functionality for DAB, HD Radio, and DRM along with analog AM and FM signals at CES 2008 in Las Vegas. The new product is said to integrate the company's Nexperia PNX9525 DSP (DRM and DAB) with the SAF355x (Ibiquity IBOC) technology in a single product that will streamline production of market-adaptable DSP-based car radios.

Joern Conze, product marketing manager for NXP Semiconductors describes the new chip as a "flexible and scalable upgrade path from analog to digital radio" that will facilitate the production of "a globally unified platform for in-car radio."

According to market analysis firm Isuppli, the combined demand for AM/FM and digital terrestrial radios for in-car use is expected to increase from 101.4 million units in 2007 to 141.9 million units by 2013. As multiple digital radio broadcast standards develop across the world, car manufacturers will have to examine what overlaps exist between the standards before deploying their rollout strategies. Multi-standard radios are an obvious solution for manufacturers that want to standardize product lines and move them to market to market quickly.

NXP says it anticipates shipping production quantities of the new chip later in 2008.


Sony Unveils Low-Cost HD Home Tuner
HD Radio fans on a budget found something to cheer about on the first day of the CES extravaganza in Las Vegas, as Sony introduced a New HD Radio-ready tuner at a popular price point. The company's new XDR-F1HD tuner transforms any existing audio system with an auxiliary input into an HD Radio receiver with multicast capability, wireless remote, and a full dot matrix LCD display for program and station information.

The XDR-F1HD will be available in March.


More Itunes Tagging Radios Debut at CES
Alpine, JVC and Sony have joined JBL and Polk audio in offering HD Radio receivers featuring Itunes Tagging technology. The new products surfaced for the first time at the Las Vegas Convention Center as CES kicked off for 2008.

Found in devices with special Ipod connectivity, Itunes Tagging technology allows consumers to tag, download and purchase songs heard on HD Radio primary and multicast digital channels. Thus far, CBS Radio, Clear Channel, Cumulus, Cox, Entercom and Greater Media are committed to implementing Itunes Tagging at operational HD Radio stations within their respective groups

Both Polk and JVC unveiled their Itunes Tagging receivers in fall 2007.




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