HD Radio proprietor iBiquity Digital Corporation made three announcements at the NAB annual convention, which winds down today.
iBiquity, Emmis Communications (an Indianapolis-based broadcast conglomerate) and Intel unveiled a prototype smartphone with FM-HD reception technology. The FM-HD phone chip also includes a feature developed by Emmis called TagStation which will allow FM-HD stations to broadcast targeted advertisements to listeners on cell phones within a station’s coverage area.
Called “a landmark” in the digital radio transition by Emmis CEO Jeff Smulyan, the companies will now attempt to woo phone-makers to include an HD chip in their devices and telecom companies to support the effort.
In addition, General Motors announced a commitment to enable HD Radio’s “Artist Experience” (i.e., radio with pictures) feature in three of its crossover sport utility vehicles, and iBiquity celebrated the formal launch of HD Radio in Mexico, for which it’s prepared a pared-back Spanish-language version of its site.
Relative to iBiquity’s anemic presence at NAB shows in recent years, this represents a veritable slew of “news” about the technology’s adoptive “progress.” However, reading between the lines diminishes the impressiveness of these developments.
With regard to HD in smartphones, broadcasters have been lobbying the electronics industry for several years now to enable analog FM reception in phones (many already have the hardware onboard, but not the software to use it.) The announcement of the FM-HD chip did not include information on how much it would cost device-makers to install.
Radio Survivor’s Paul Riismandel noted that the country’s largest broadcasters have not publicly lined up to support the smartphone effort, even though Radio World reported that Emmis’ Smulyan believes it represents “both the radio industry and NAB’s number one priority right now.”
This will take some fancy footwork, as broadcasters’ ham-handed attempt to have Congress mandate radios in phones in 2010 failed miserably and raised the ire of consumer electronics manufacturers.
Getting HD Radio into smartphones would allow an end-run around the slow uptake of the technology by auto manufacturers. The growing practice of tethering phones to the dashboard would de-emphasize the importance of having HD built into the car.
Today, nearly all automakers have committed to including HD Radio in at least one make or model, but very few have committed to making it standard equipment across their entire brand. GM’s adoption of Artist Experience in three discrete SUVs is not necessarily indicative of enthusiastic support for the technology. The appeal of the feature, especially in a mobile environment, also remains to be proven.
You would think that all of this would be good for sales of HD-compatible radios. At the GM event, iBiquity claimed that seven million HD receivers have been sold since the technology’s launch in 2002. That’s up from five million sales reported last fall, but still represents a national receiver penetration rate of just 1% (among an installed receiver base of ~700 million).
iBiquity CEO Bob Struble claims that an HD-equipped vehicle is sold every 15 seconds in the United States; on further inspection, this sounds more impressive than it is. Last month, 1.4 million vehicles were sold in the United States, which works out to about 31 vehicles sold per minute. At 15 seconds per sale, just 13% of the vehicles bought last month were HD-ready.
Finally, Mexico’s embrace of the technology isn’t new news. The country’s allowed broadcasters within a buffer zone near the United States to broadcast in HD for several years now (these stations primarily target a U.S. audience). The fact that three FM broadcasters in Mexico City now transmit in HD is hardly indicative of future widespread adoption by the country’s radio industry.
However, it is interesting that the diversity of available HD receivers in Mexico seems to grossly outnumber those available in the U.S. Since iBiquity’s broadcaster licensing scheme does not apply internationally, it must make up the revenue elsewhere, so a diverse receiver market is key in this context.
None of these developments are game-changing; they all represent HD Radio’s incremental movement in several spheres. The big question remains just what constitutes “critical mass” for the technology’s long-term viability – and whether that can be achieved in this decade.
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