Bob Struble, President & CEO, iBiquity

iBiquity is remarkable with updating new developments in HD Radio as they happen, such as the growing expansion into the automotive arena and the recent release of portable devices, but as Struble said at the outset of our conversation, “My concern is that we haven’t taken enough time to go over the big picture and show how this all fits together. What’s the good, the bad and the indifferent?

---

eQB presents excerpts from the October FMQB magazine
Cover Story: Bob Struble, President & CEO, iBiquity

“We know on the broadcast side, the industry is very troubled, so what we’re trying to do is make a transition from science project to business proposition.  That really revolves around ringing the cash register for broadcasters and ways the technology is going to enable us to develop incremental revenue streams, because over the long term that’s what’s going to be required to keep them excited and investing in the business.”

“So many of those companies are restructuring, not spending any money and cutting every bit of capital and personnel they have.  Well, we need stations to go on the air.  We need programmers to program HD2s, and we need promotional folks to tell listeners this new capability is out there, and the fact that the industry is basically not doing a whole lot of spending on anything just makes it more difficult.  Most of us believe we will get through this, the industry will stabilize and then get ready to go for broke again, but I still haven’t seen it and I don’t see it for awhile.  You’ve got companies burning furniture to stay in business.”

“While we have been recognizing the industry’s struggles, we have been focusing on the consumer side and making progress on getting radios out there, getting in cars and getting new devices out. As the industry stabilizes, companies will be able to lift their heads out of the foxholes and see we’re in a lot of cars and that there are a bunch of radios out there along with portable devices.”

“Radio used to have more or less a monopoly position, certainly in the car, for information and entertainment.  If you wanted to drive around town, the radio was how you got your entertainment and information.  That’s gone now.  It’s not gone in the sense of radio is still there, but there’s a whole lot of other ways people are getting that, and that’s going to be a constant competition for AM and FM.  So, while the ad market is eventually going to get better and the economy is going to get better, the digital competition for radio is not going to go away.  If anything, it’s going to get more intense.”

“If I was a radio broadcaster, I’d be much, much more worried about iPods.  I’d be much, much more worried about everything that everybody’s doing on cell phones.  Those are much greater threats.  Those are mass-market products and everybody’s got them.  So, the amount of focus that has been placed on satellite has been misjudged.  I would have been worried about other stuff, but that thinking has also been helpful to us, because when satellite came out and it was so talked about on Main Street and Wall Street, the station conversions went a little bit quicker because everybody was worried about satellite.  I don’t believe that satellite is ultimately the threat the radio guys need to be worried about.”

“Roughly 2,000 stations are on-the-air with all Arbitron markets covered. If you look at population coverage, 85% of the country is within reach of an HD radio station.  Arbitron data shows half of all listening is taking place on stations that have converted.  So, we worked with the industry.  We got the right stations.  It’s basically people’s presets.  What that means is that if somebody goes to a Best Buy and gets a radio or somebody buys a new BMW, it’s very likely that what they tune to is going to be a station broadcasting in digital, especially in larger markets.”

“A lot of multi-cast channels are out there with more than 1,000 different HD2s and HD3s.  The programming grade is mixed.  There’s some really cool stuff going on in a lot of different places, but there’s some sloppy stuff as well.  We’re excited about the sports teams that are getting into it.  Local sports franchises are attractive and have a passionate audience. The Dallas Cowboys and the Pittsburgh Penguins having 24/7 HD2s and that’s a pretty cool thing. We think that has a real good potential to drive sales.”

“We’ve been very excited in this area and probably the most important developments we have involve cars. If we had this conversation a year ago, we would have been talking about BMW and not a whole lot more.  In the last eighteen months or so, we’ve had thirteen different auto manufacturers that have either applied the technology or have it coming soon. And that’s high-end brands like BMW and Mercedes, and low-end brands like Hyundai and Kia. So this is moving in the right direction and it’s fair to assume there are others that have not yet publicly announced, but are coming because we’re working with them and we know about it.”

“Five or six years ago, there were 35 million portable radios that were sold every year between Walkmen, head phone radios, transistor radios, and the like. That 35 million has gone down to 5 million.  The category has just disappeared and the reason it disappeared is because people carry iPods and cell phones.  So if we as an industry don’t get back on the devices that people carry, we’re going to be in a situation where we’re not a ubiquitous medium.”

“We’re trying [to get on cell phones].  That’s the Holy Grail, obviously.  But, no one is going to put you in their device out of the goodness of their heart.  You have to demonstrate to them a compelling business reason why they should include HD radio, or AM & FM radio for that matter, on their device.  That can either be when we put it in, it’s going to sell a whole lot more or there is an opportunity for more applications that will generate additional revenue.”
** QB Content by Michael Parrish **