HD Vital Signs

Despite Bob Struble’s ebullient message that everything’s hunky-dory for iBiquity in radio land, a number of vital signs have lately taken a turn for the worse . . . Here, for instance, is word that the Zune is changing and no longer will feature HD:

This year, instead of a shiny new version of the Zune HD for the holidays, Microsoft is keeping last year’s model on store shelves (though a 64GB version was added this year) and focusing its attention on Windows Phone 7. Arguably, it’s the right move for Microsoft, especially considering that even Apple admits that iPod sales are on the decline while iPhone sales are skyrocketing.

But as the Zune HD hardware fades into the background, the Zune software and experience continues to evolve and gain steam. With the exception of the Zune HD’s HD Radio tuner, the Zune user interface and features have all migrated to Windows Phone 7 smartphones. In fact, the Zune experience on these new phones seems to be drawing nothing but praise from reviewers.

In other developments, the NAB, firmly in the pocket of the consolidators, has been trying to push through a deal that would exchange a royalty “tax” on music played on radio for a mandate of FM chips in mobile phones and the like. For iBiquity, this presented the possibility of HD chips in mobile phones — albeit a remote possibility, given the laws of physics and fiscal realities. The rank-and-file of NAB, including a number of our correspondents, is dead set against this, arguing that they already pay royalties to BMI, ASCAP, etc., and that musicians rely on radio to push product and gain acceptance. A recent poll of NAB members (pdf attached) showed 75% opposed to the NAB attempt, and in this post, on the Ars Technica website, the Consumer Electronics Association is ready to go to war over the issue:

The statement threatens nothing less than existential war against the whole concept of terrestrial broadcasting itself.

If NAB keeps pushing this agenda, the missive warns, CEA will “continue to point out the following”:

“Radio is a legacy horse and buggy industry trying to put limits on innovative new industries to preserve its former monopoly. The industry’s refusal to innovate to the benefit of consumers raises questions about the ongoing wisdom of broadcaster use of publicly owned spectrum that could better be used for broadband services that serve the public interest.”

And:

“Many local radio stations are unmanned, particularly at nights and on weekends, rendering the alleged emergency alert benefit of FM tuners in mobile phones unreliable and raising questions about the wisdom of permitting such unattended operation.”

And:

“At a time when popular new digital media platforms like satellite radio and online music services are required to pay performance royalties to copyright owners, it is unclear that the royalty exemption for broadcast radio stations can be justified. Indeed, fairness requires that the royalty rate paid by broadcasters should be the same as that assessed to online music streaming services and other new technologies.”

Similarly, in a post entitled “Radio Is About to Make a Very Bad Bet,” Mark Ramsey adds:

In other words, elements in the radio industry are ready to mortgage our future on a speculative and sporty bet: That getting radio on mobile phones will be worth subsidizing via dollars you earn from monetizing radio that is not on mobile phones. That premise is a sketchy guess at best and dead wrong at worst.

What’s more, it’s a bet that exhibits no insight into the wants and behaviors of digital consumers and even less insight into the direction of technology trends….

“We have to be on cell phones,” the thinking goes. Try this experiment: Ask your clients if radio’s problem is that it doesn’t reach consumers who own cell phones. Go ahead, ask. I’ll wait.

I’m still waiting….

Has the idea occurred to anyone on the Radio Board that the best way to sustain relevance in a digital media age is to create content and digital solutions which are, in fact, relevant to that age?

Evidently not.

Mark’s conclusion: “Your future, Mr. and Ms. Broadcaster, is being mortgaged on this deal? Maybe you need a new mortgage broker.”

IR poll on NAB royalty sellout-1

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One Response

  1. As iBiquity investors, all of this is a Hail Mary attempt by the NAB to get HD Radio mandated onto cell phones. With Congress, CEA, musicFirst, and the CTIA opposed to the idea, it will never happen. Also, radio has lost many of its biggest supporters with the recent changes in Congress.

    See how much trouble Bob Struble has caused: tried to get HD Radio mandated into Satrad receivers and ended up pissing off the likes of Pioneer; has dragged the auto industry into the Keefe/Wolf investigation; and now, has pissed off the CEA and CTIA industries. LOL!

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