Digital Radio Update - May 9, 2007


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News

Bridge Ratings: Online Listening Up, HD Radio Growth May Lag
Bridge Ratings most recent survey findings on broadcast, satellite and online radio listening trends contains good and bad news for terrestrial broadcasters. On the plus side, satellite radio subscription growth rates appear to be softening, with total subscription numbers for both service providers posed to go just a little above 17 million by year's end, still well below industry forecasts of 19 million. Market share is now more evenly split than in the past, with projections that Sirius will reach 8.1 million while XM moves to the 8.9 million mark by 2008. Bridge Ratings analysts believe that the current merger controversy may be playing a role in holding down those numbers.

Another bright spot was a trend analysis that suggests that the rate of loss of young radio listeners may be less dramatic than previously forecast. According to 2006 survey data, 12 to 21-year-olds were found to be less likely to abandon terrestrial radio for alternate technologies than in 2004. Although the analysis suggests that losses will continue within this demographic, they will do so at a modest pace.

News regarding the steady growth in Internet radio listening paints a mixed picture for terrestrial radio. If current trend lines continue, 31 percent, or nearly one third of Americans are likely to be listening to some online radio by the end of 2007, with a projected increase to 38 percent by the end of 2008. While that may prove a bitter pill for some broadcasters, those who have mastered webcasting and are promoting it effectively may actually realize audience gains, as 25 percent who report online listening are consuming terrestrial radio webcasts, with that percentage projected to increase.

But by far the most troubling finding in Bridge's latest research concerns consumers favoring the adoption of HD Radio. The percentage among those who report "awareness" of the technology is actually lower now than just a year ago. While reported awareness was up significantly--about 10 percent for ages 12+--a slightly larger percentage of this group reported that they were not interested in purchasing a receiver. Analysts for Bridge believe that this finding is directly attributable to a perceived lack of a significant relative advantage for the technology. Based on their findings, Bridge has revised their receiver penetration estimates downward to about one million by the end of 2008.

More information regarding the survey results can be viewed at www.bridgeratings.com.


Business

BE Demonstrates EPG at NAB
Broadcast Electronics (BE), in cooperation with Ibiquity Digital, demonstrated an electronic program guide for HD Radio broadcasting at its booth at NAB2007. The demonstration featured program schedules of 20 HD Radio program channels in the Las Vegas area April 16 through April 19. A receiver platform with a touch-screen interface displayed station names, frequencies, HD channels and automatically advanced through EPG schedules by station or by time.


A $60 HD Radio Receiver?
Well, yes, at least until June 30. That's when Radisosophy's new HD 100 tabletop clock HD Radio introductory price of $99.95 expires. The additional $40 savings comes from an Ibiquity-sponsored rebate program that runs through July 3 and is applicable to the purchase of the HD 100.

The HD 100 is a small footprint stereo receiver with full HD Radio functionality, including multicast, combined with traditional clock radio features that American consumers have come to know and love. Among its more unique features are a stereo line input to accommodate personal music players and an HD Radio-only scan feature that allows users to sample all the HD Radio channels available in their area.

The Radiosophy HD 100 will return to its suggested retail price of $119.95 on July 1. More information available at radiosophy.com.


U.S. Automakers Tuning Out HD Radio
America's big three automakers remain unimpressed with HD Radio and are unlikely to add it as an OEM option anytime soon, according to a April 26 Reuters news report. The article, entitled US Automakers not jumping into HD Radio, says that GM and Chrysler are thus far resisting adding the option at a time when all U.S. automakers are under financial stress and some are losing market share to foreign competition. Driving this point home was one GM source, quoted as saying that his company "was not inclined to test the market at this time."

Thus far Ibiquity has only been able to convince foreign-based automakers such as BMW, Hyundai and Ford-owned Jaguar to publicly commit to factory HD Radio options, though the HD Digital Radio Alliance's Peter Ferrara says more groups will be joining them soon.

Heavy commitments to satellite radio, which is not moving as well as some automakers had hoped, are part of the problem, according to Ferrara. But the alliance and HD Radio technology developer Ibiquity say they remain optimistic that Detroit's attitude will eventually shift as demand for satellite receivers wanes and consumer demand for HD Radio increases.


Fraunhofer to Develop European Sat Radio Receiver
Worldspace Satellite Radio has engaged in a contractual agreement with Fraunhofer Institute for Integrated Circuits IIS, part of Fraunhofer Gesellschaft, to develop a receiver reference design for satellite radio service for the European market.

The Worldspace's European receiver will be the first satellite-terrestrial hybrid receiver developed to comply with the satellite digital radio (SDR) standard, newly established by the European Telecommunications Standards Institute (ETSI). The standard accommodates L Band hybrid operation with terrestrial repeater networks and satellite transmission.

Worldspace has already reached an agreement with Italy on provisioning satellite radio service licensing repeater networks there, and is reportedly negotiating with France, Germany, Spain, Turkey and Poland along similar lines.

The satellite Worldspace has earmarked for the proposed 50-channel European service is said to be complete, but currently remains in storage in Toulouse, France. The company has not revealed a launch date.


World DMB President Joins APT Board
Quentin Howard, chief executive of Digital One and president of the World DMB Forum, has joined the board of directors of APT in a non-executive capacity. Howard's board-level experience includes intellectual property licensing, which dates back to 2000 when he became actively involved in the evolution of the DAB semiconductor market through a joint venture between Digital One and Imagination Technologies. The DAB silicon chip development resulted in the formation of Frontier Silicon supplier of DAB receiver modules to OEM and ODM manufacturers.

Howard is also the founder of Digital One, which was awarded the UK's first national DAB multiplex license and began transmission in 1999. The company broadcasts eight national digital radio services and five mobile TV services.

Howard was elected president of the World DAB Forum in 2005. World DMB Forum oversees the interests of 130 member companies and organizations from 40 countries.


Prairie Public Broadcasting Taps Harris
At NAB2007, Harris revealed that Prairie Public Broadcasting, a public TV and radio group serving North Dakota, has purchased Harris HD Radio transmitters for its eight FM stations. Harris also will provide the Flexstar HD importers, exporters and exciters needed for planned multicasting initiatives.

Jack Anderson, DOE for the Fargo-based public broadcaster, expects the installation of the new transmission equipment to begin early next month and conclude by year's end. Prairie Public's engineering staff will perform the installation.

Prairie Public's eight radio stations are: KPPR-FM in Williston, KMPR-FM in Minot, KDPR-FM in Dickinson, KCND-FM in Bismarck, KPRJ-FM in Jamestown, KUND-FM in Grand Forks, KDSU-FM in Fargo, and KFJM-FM in Grand Forks. The radio network also includes 11 translators throughout North Dakota.


Eye on IBOC

Another Low Bridge on Radio's Digital Road
Only weeks after the 108,000 or so attendees at NAB2007 in Las Vegas have settled back into their routines, some more digital content-related developments guaranteed to catch the attention of terrestrial radio broadcasters have emerged.

First on almost everyone's radar is the latest fall-out on webcast streaming performance royalties. The near stratospheric sound recording per-performance rates recently established by copyright judges have been a major source of anxiety for commercial and non-commercial broadcasters who stream their content on the Web. While one bill that would cap these costs at 7.5 percent of profits has been introduced in the House (while another one makes its way into the Senate), this would still be a bitter pill for broadcasters to swallow. Just trying to figure out what it mean in terms of administration and budget is enough to bring on a headache.

But wait--there's more. In some corners and meeting rooms at NAB, discussions of what future performance fees may be brought to bear on digital transmission of music via HD Radio primary, multicast and even analog channels could be overheard. In one session, a gentleman from the UK politely suggested that U.S. broadcasters ought to be doing more to fully comply with the World Intellectual Property Organization Copyright Treaty (WCT) and the WIPO Performances and Phonograms Treaty (WPPT). This could spell the beginning of yet another new round of expense and record keeping for radio.

Terrestrial radio broadcasters need to move forward with digital transmission and streaming to remain relevant and competitive, to be sure. But does it make sense that as we do so, we're to be penalized at every step for making those investments-- predominantly by an industry that we helped build?

It all adds up to just one more digital dilemma for America's radio industry.


Samsung Developing HD Radio Chipset
Columbia, MD - May 9, 2007 - Samsung Electro Mechanics plans to introduce a new chipset for use in portable and home HD Radio receivers. Samsung, already an Ibiquity Digital IC development partner, expects samples of the chipset will be available before the end of the 2007 with production anticipated for the first quarter of 2008.

Designed to be a low-power, high-performance chip, it will be capable of supporting all current and planned HD Radio technology features. It is being designed and manufactured using advanced technology and features a system-in-package (SIP) module and a CMOS, mixed-signal single-chip tuner. Target HD Radio applications include mobile phones, portable media players, portable navigation devices, table radios and home audio-video components.


IBOC Across America

IBOC By State: Kansas
Ibiquity has a list of stations that have licensed HD Radio technology and notes those that are on the air now. IBOC by state looks at various states and list the stations that are making the transition.

MarketCall Sign FrequencyHD1 FormatHD2 FormatOwner
EmporiaKANH-FM 89.7NPR/Classical/JazzNews/TalkUniversity of Kansas
Hill CityKZNA-FM 90.5Variety-KANZA Society
LawrenceKANU-FM 91.5NPR/Classical/JazzNews/TalkUniversity of Kansas
Olsburg/Junction CityKANV-FM 91.3NPR/Classical/JazzNews/TalkUniversity of Kansas
PittsburgKRPS-FM 89.9NPR/Classical/Jazz-Pittsburg State University
SalinaKHCD-FM 89.5NPR/News/Classical-Hutchinson Community College
TopekaKMXN-FM 92.9Classic RockActive RockJayhawk Broadcasting
WichitaKRBB-FM 97.9ACSmooth JazzClear Channel Radio
WichitaKFBZ-FM 105.3Hot AC-Entercom Communications
WichitaKZSN-FM 102.1CountryClassic CountryClear Channel Radio
WichitaKZCH-FM 96.3Top 40DanceClear Channel Radio
WichitaKTHR-FM 107.3Classic RockRock VarietyClear Channel Radio
WichitaKEYN-FM 103.7Oldies-Entercom Communications

There are 13 stations broadcasting 21 HD Radio channels in the Sunflower State.


HD Radio Terminology

ADS: ADS stands for Advanced Data Services.

Advanced Data Services: Advanced data services are any data services consisting of either text, audio, video or other data carried on the IBOC transport other than SIS, MPSD or SPSD.




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