Grading Radio

Two devices captured the attention of radio geeks this month. We felt it was time for RadioSherpa to issue its report card on both.

1) Blaupunkt "Internet Car Radio"

















First was the Blaupunkt "Internet Car Radio" which debuted at CES.

Obviously this tagline was going to get some attention.

So did they integrate a GSM or CDMA modem into their radio units?

Did they resolve the limitations of current car radio displays with a rich touchscreen?

Did they figure out a way to reduce dropouts on the 3G network?

The answer to all these questions is NO!

The first "Internet Car Radio" was nothing more than a radio console that uses Bluetooh to play music streamed from a users cell phone.

The Intel WiMax demo we discussed a few months ago was far more impressive.

GRADE: F-




2) Radio Bookmark













The second device grabbing some headlines was the Radio Bookmark which is being exclusively promoted for public radio. This USB dongle from SkyBlue Technologies allows users to hit a button on the Radio Bookmark when they hear a story on public radio that is of interest to them.

Later, when users are at their PCs, they can plug in their USB dongles which will automatically relay the time and frequency to a web service that will then return detailed information on the story via the web.

Thanks to the iPod, USB interfaces on car radios are increasingly available, which is good news for fans of this concept.

Unfortunately, this concept will remain limited unless this feature can be integrated with iPods which has successfully trained people to synch their devices with the PCs at regular intervals.

But as "Tagging on HD Radio" has proven, the disconnect between when people first get excited about a story in their cars, and the time when they actually get to their PCs, is often too great.

Nice try and brownie points for working with public radio (big fans!)

Grade: B-

Put on your oxygen mask first

Thomas Friedman, the New York Times columnist,argues that to restart diplomacy (that is to get them to talk) in Middle East, the following must be immediately accomplished:

• Rebuild Fatah
  
• Merge Fatah with Hamas
  
• Elect an Israeli government that can freeze settlements
  
• Court Syria and engage Iran — while preventing it from going nuclear
  

Obviously, these steps are neither easy nor cheap. More importantly and unfortunately, they are highly improbable as demonstrated by the lack of peaceful resolution despite sixty years of support and diplomacy.


Supporting Israel since its formation in 1948 has taken a huge toll on USA not only in terms of resources but also in the form of terrorism and wars. We are wondering whether USA should continue to tackle Israel/Palestine issues while the country itself is in deep shit. The direness of the situation at home can be understood from the following excerpt from Obama's inauguration speech - "That we are in the midst of crisis is now well understood. Our nation is at war, against a far-reaching network of violence and hatred. Our economy is badly weakened, .... Homes have been lost; jobs shed; businesses shuttered. Our health care is too costly; our schools fail too many; and each day brings further evidence that the ways we use energy strengthen our adversaries and threaten our planet."


Given this disastrous situation, we hope Obama administration gets away from the Middle East mess (and the Israeli lobby) and focuses on revitalizing this country. Let Israelis and Palestinians sort it out themselves. They are old and strong enough.

As the airlines say, put on your oxygen mask first before helping others.

Hoi Polloi

We really enjoyed iBiquity's CEO Bob Struble's most recent blog. We thought that his message about a rapidly increasing set of competitors for broadcast radio was on point.

The fact is that AM/FM radio has long ago lost its "cool".

When have you heard the hoi polloi talk about radio in the same way they do about cell phones?

Case in point:

Do a Google search for "CES and Palm Pre": 16.9 million results

Then do another Google search for "CES and HD Radio": 542 thousand results

But all is not lost. Clear Channel and CBS Radio have made significant steps forward in the past year embracing the iPhone and their respective apps are having some success.

This is a foundation from which terrestrial radio can build.

Bob talks about HD Radio being "part of the solution". But he shold go further. The radio industry is half pregnant with HD Radio and they need to decide whether to fully embrace it or dump it immediately.

We hope it is the former and Bob should be making that case.

Here are some good, if not novel, ideas:

1) iBiquity's should push their broadcast partners to make explicit links between new programming online, in mobile and HD Radio. Radio could benefit by riding the coattails of new "hip" offerings like iPhone apps. (P.S. HD Radio's "Tagging" feature is not enough.)

2) Broadcasters need to invest more in programming...not less. This investment can be spread across all mediums as consistent content is key to building new station brands.

3) As we have argued before, iBiquity and broadcasters need to keep pushing the FCC to allow the broadcast power of HD Radio to be increased.

4) Stop waiting for Detroit to save you. The Big 3 have bigger problems than what radio they will choose. Depending on Detroit has not worked for Sirius, so why repeat this mistake. iBiquity should be spending their time working with radio manufacturers and developers who will make products that customers really want. It was amazing how quickly Detroit moved to incorporate iPods when consumers demanded them.

5) Continue pushing the technology envelope to reduce HD Radio's power profile. This is obvious but what good is radio if you need to be tethered to your power cord.

As Bob states himself, "No one is carrying transistor radios anymore, it’s cell phones, MP3 players and increasingly, PNDs."

Very true, and for radio, very scary.

Par For The Course

What a week.

On one hand, we had one of those historic "American Moments" with the inauguration of President Obama (sounds good, right?).

On the other hand, however, job losses appear to have only accelerated this week. Most employees are living in fear...unless they are fortunate enough to work at Apple.

Not surprisingly, the radio industry has also had significant layoffs. Just this week, we learned the following:

1) iBiquity had a small reduction in workforce. This sucks as we really like these folks. We hope that the folks behind HD Radio can pull through this credit crisis.

2) Clear Channel also laid off 1,850 employees this week...perfectly timed to coincide with the inauguration.

Not only was this a cruel joke on 1,850 people who were probably in a great mood that morning in anticipation of the Obama inauguration, but also a ploy by management to get this announcement out there with little press.

But we noticed, and so did many others.

What was also not lost on us was who management is at Clear Channel these days:

None other than the private equity firms of Thomas H. Lee Partners and Bain Capital.

As we pointed out in February, it should come as no surprise that there would be significant layoffs at Clear Channel. In fact, the downturn in the economy was likely a convenient cover.

That is what private equity firms do. They "streamline companies" (i.e., fire employees) to "better position" (i.e., breakup and sell) the company for the future.

What else can they do?

Their excel models actually don't teach them how to run companies.

But the joke may still be on them.

You see, they are facing an uncomfortable situation now where they may be NO buyers for even parts of the company...particularly on the radio side.

One has to wonder what an $18 billion write-down looks to limited partners.

Our favorite Presidential candidate may need to dig deeper into his pockets if he wants to see his company survive. Relatively speaking, his futile Presidential campaign will look cheap.

Our sentiments may be best summarized by this astute commenter on John Gorman's Media Blog:

"Bain and Lee are up the creek without a paddle with this deal. Even when they split the stations up and sell them in parcels they will be lucky to get a fraction of what they paid for them. Projected revenue? Hand it to the Mays family. A clan of Texans took those New England Yankee WASPs for one hell of a ride they won't forget for a long time to come. Yee Hah."

Yee Hah indeed.

Must See Content...(Besides the Inauguration)

Lost in all the coverage about the inauguration is the recent (and very progressive) decision by Massachusetts District Court judge Nancy Gertner to allow live streaming of the trial, Harvard vs. RIAA.

Although the RIAA appears to have backed off the strategy of suing their customers, the case still has far reaching implications for both the legal and technology communities. RadioSherpa will be watching this trial closely.

But what is perhaps most interesting is the reasoning Judge Gertner gave for allowing a live web stream from her court room:

"In many ways, this case is about the so-called 'Internet Generation' - the generation that has grown up with computer technology in general, and the internet in particular, as commonplace," Gertner opined.

"It is reportedly a generation that does not read newspapers or watch the evening news, but gets its information largely, if not almost exclusively, over the internet."

We applaud her decision.

If a judge, part of the legal community famously behind the times on technology, understands just how important the Web is to the public, one has to wonder why traditional media such as newspapers and radio still remain hesitant to fully embrace this new medium.

Hope Springs Eternal

As we are now within a week of Obama's big day, we think that most Americans are looking for signs of hope.

The latest Internet traffic reports for CBS Radio and Clear Channel may just be those signs.

MediaPost News is reporting that CBS Radio's Internet traffic grew 30% in December 2008 over the same month the previous year. Certain CBS stations in Dallas and Los Angeles and Chicago grew over 100% YoY.

The report also confirms that Clear Channel is seeing 20% growth YoY in web traffic. Better yet, overall revenues from Clear Channels Internet Radio efforts are now approaching $70 million.

This revenue number is perhaps small relative to their OTA revenues but they are nothing to sneeze at either. We are quite certain that Pandora (despite all of its hype) is not anywhere Clear Channel's web revenues.

Hope is a magical thing...let's just hope the legacy of past leadership does not create too big of a burden to overcome.

Should be unanimous....

Any one interested in HD Radio should read the latest post in Radio World. The story posts comments provided to the FCC with respect to the proposed power increase for HD Radio broadcasts.

RadioSherpa has stated numerous times that it supports the effort to increase HD Radio's broadcast power. Without this tenfold increase in power, HD Radio is doomed to fail. The fact is that there is only so much improvements to receivers' sensitivity can do.

The positions that commenters took were predictable. But there were some golden nuggets:

1) BMW goes on record with some very interesting comments on their current HD Radio offering:

"BMW of North America remains concerned, however, that these benefits of HD Radio technology will not be accepted by the public unless HD Radio technology is able to replicate analog coverage in a greater number of cases. Although there are many stations that enjoy excellent digital coverage, there are a number of stations that are not able to replicate their analog coverage with the current configuration of the HD Radio system.

These coverage problems are particularly problematic in a vehicle environment. Mobile reception is inherently more susceptible to multipath interference and other impairments that can vary considerable in very short time frames as a vehicle goes in and out of areas of interference."

Given these comments, one has to wonder why BMW would even want to sell the current HD Radio offering. It would seem to be more of a liability.

2) NPR appears to be leaning positive on this issue. They state the following:

"NPR has publicly stated that it is not fundamentally opposed to — and sees the need for — a substantial digital power increase. Thus, the Joint Parties hope to work with iBiquity and NPR Labs to identify those circumstances in which a particular FM station's digital operations may need to be conditioned to avoid unacceptable levels of harmful interference."

"Not fundamentally opposed", however, does not sound like a ringing endorsement.

3) WNYC states:

"We oppose the proposed power increase on the basis of the increased first adjacent interference to WNYC(FM)'s analog coverage and to the interference we will cause to our first adjacent neighbors. The [NPR] study specifically demonstrates for us that approx. 20 percent of WNYC(FM) analog listeners would experience this interference; a signal degradation that is wholly unacceptable to the service we expect to provide our listeners and members."

OUCH...but then why are they still broadcasting a HD2 AND HD3 station? Don't they want people to actually hear their new channels...or are these broadcasts just for themselves.

We will put WNYC in the "confused" category with NPR.

4) And in the biggest surprise of them all, PocketRadio goes on record endorsing the power increase for HD Radio.

Ok, not really, but that would be very funny:-)

Those who do support HD Radio, however, should be fully behind this initiative to increase broadcast power.

Our question to those stations like WNYC who appear against iBiquity on this issue is very simple: Why even bother with HD Radio?

Radio Android

miRoamer, a Melbourne-based online radio aggregator and Blaupunkt, a large German car radio manufacturer unveiled a prototype of Internet car radio during the 2009 Consumer Electronics Show (CES) in Las Vegas.

Although 30,000 stations are offered, the product is not attractive as the radio is expensive to buy ($399), expensive to own as it entails a monthly subscription fee of $15 and a high-capacity cellular data plan.

However, we believe these issues will be resolved soon since the price of successful consumer electronics devices usually fall quickly and miRoamer can perhaps try ad-funded programming in combination with pay-per-hear content such as premier podcasts.

More importantly, we see an intriguing possibility - Google android powered car radios. This opens a great advertising channel for Google - a large population of car radio listeners. This is specially beneficial to Google since they can own the content, commercials, the software platform (android) and the user data just by partnering with (usually willing) mobile network operators such as T-Mobile.

In fact, Google has been interested in placing audio ads on terrestrial radio broadcasts. They acquired dMarc for the same exact reason. To their disappointment, radio stations refused to work with Google.

Now it is a different game. Broadcasters may not be able to stop Google. Soon AM, FM and HD Radios could be replaced by gRadios.

Buying Sirius XM...Brilliant or Stupid

Over the extended holiday weekend (at least for us), we read an interesting editorial by Dave Wilson from WHDX FM and WHDZ FM in RadioWorld. In the article he argues that terrestrial radio broadcasters should pool together their resources and buy Sirius XM.

We are not sure if this is a case of Schadenfreude on the part of a terrestrial radio veteran who is enjoying seeing satellite radio take a beating in the stock market. But assuming that he is serious, does this make sense?

He indicates that at the current market cap, Sirius XM could be bought for between $100k for a small market Class A station and $1.8 million for the largest high-powered FM station. Given that some large market radio stations are pulling between $30 and $70 million a year, this expense to co-opt a major competitor seems reasonable.

We think, however, that this would be a waste of money. Here is why:

1) Terrestrial radio already has better spectrum...as anyone who has tried Sirius indoors can tell you.

2) For the largest broadcasters, creating a national station is already possible. In fact, one of our early posts argued that HD2 stations should do exactly this.

3) Satellite radio does not address the biggest threat for terrestrial radio...namely the Internet and its unlimited and user-controlled options. Sirius is just another BROADCAST.

Given these points, Dave would be better off arguing that all the stations should get together and spend this money on more promising alternatives.

Of course, we have some ideas:

1) Better programming for HD2 stations

2) Fulfilling RadioSherpa's dream of a consolidated programming guide for both online and OTA broadcasts

3) Even an upgrade of existing HD Radio infrastructure to accommodate increased broadcasting power...which we are sure iBiquity would also love.