The Internet this week has been littered with stories about the pending bankruptcy of Sirius XM. The satellite radio monopoly has $175 million due on Tuesday and another $350 million due in May. In this economic environment, its chances of averting bankruptcy is slim. Can you say fire sale?
Of course, one company that must be enjoying this is iBiquity. Never blessed with the billions in cash that satellite radio received, the pending bankruptcy of their biggest competitor must be fun for them to watch.
If you add this news with the fact that Jaguar recently announced that it was going to make HD Radio a standard option across all their cars, our friends over at iBiquity are having a very good week.
Too bad iBiquity wasted all that money on petitioning the FCC to mandate the inclusion of HD Radio into satellite radio receivers.
But not all was great for terrestrial radio this week. In probably the most interesting news of the week, Google announced that it was exiting the radio business.
So how is this a bad thing?
Doesn't Google devalue ad inventory with its efficient algorithms?
Sure.
But Google is not dumb. It does not pull out of markets where it still sees potential...even if the venture is still just a cost item on their income statement.
Has Google Maps broke even yet?
We doubt it, but don't expect Google to be pulling out of this space anytime soon.
More likely, Google sees that OTA radio advertising is not a growth business. In fact it is a business on the decline.
Not even their $102 million investment (at a minimum) in dMarc made it worth continuing.
This should extremely worrying for terrestrial radio.
Friday, February 13, 2009
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"Of course, one company that must be enjoying this is iBiquity. Never blessed with the billions in cash that satellite radio received, the pending bankruptcy of their biggest competitor must be fun for them to watch. If you add this news with the fact that Jaguar recently announced that it was going to make HD Radio a standard option across all their cars, our friends over at iBiquity are having a very good week. Too bad iBiquity wasted all that money on petitioning the FCC to mandate the inclusion of HD Radio into satellite radio receivers."
It was also fun to watch iNiquity having to lay-off 20+ employees, recently. It was reported that Jaguar had pulled HD Radio, earlier, so as with Ford, they may be counting on the 10db power increase for FM-HD, assuming stations can afford to replace their transmissions systems, and that it actualy would make any difference - say hello to trashing analog. What a shame the NAB/iBiquty spent all of that time and money attempting to block the merger. Funny, iBiquity has the same failing business-model as Satellite Radio, except iBiquity can't afford the synergies to get HD Radio into dash-boards. Seems that once automakers agree to HD Radio, they don't let consumers know about it - perhaps, they are using iBiquity for the free publicity:
"Radio’s Revenue Falls Even as Audience Grows"
"And automakers, which have other problems, are not embracing the technology; so far, only Volvo is offering HD Radio as a standard feature in its new cars (it is standard in all but one of its 2009 models). HD radio is pretty much going to be nonexistent, because they can’t figure out how to get the auto guys to include that as an option, and the auto guys that do include HD don’t let the consumers know about it, Ms. Ryvicker of Wachovia Capital Markets said. It’s been a horribly marketed product that’s not going to save the radio industry. Mr. Struble objected to that characterization... He said there was 'a lot of momentum' with the auto industry."
http://tinyurl.com/5zx3je
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