Cell phones might sell Radio on PRA


RBR-TVBR Exclusive:

Rank and file radio operators do not seem to be getting behind the Performance Rights Act deal that was outlined a few weeks ago by the NAB, based on everything we’ve seen at RBR-TVBR, and most particularly on what our own readers are telling us.

But a meeting of the minds between influential group owners Ed Christian of Saga Communications and Jeff Smulyan of Emmis Communications may help pave the way to make an FM chip in cell phones a big bargaining chip for NAB – particularly if HD is part of the deal. It all comes as NAB gets set to talk about PRA negotiations with the entire radio community in an 8/23/10 town hall meeting

RBR-TVBR note: We have known both Ed Christian and Jeff Smulyan professionally and personally for well over 25+ years. They both have the radio business in their hearts and minds. Sometimes they may disagree, but their passion for doing what is best for the radio business today and in the future enables them to put aside their disagreements and focus on the solutions. RBR-TVBR knows Smulyan has been researching radio chips in cell phones for just about three years and is extremely knowledgeable — and in some respects his knowledge surpasses the radio business which can trigger fear of the unknown. Read with open mind as radio’s future in all avenues hangs in the balance: 

Christian has been – and remains – one of radio’s most prominent opponents of a deal. He still sees the PRA as prey – something to be hunted down and done away with.

But if a deal must be made, Christian now sees the inclusion of an FM chip in cell phones as a major plus for radio – but there are a couple of ifs.

One of them is the legislation of minimum standards.

Smulyan told RBR-TVBR that their current best estimate of the cost of an FM chip was in the neighborhood of 20 cents. That would be a negligible cost which phone manufacturers could pass on to consumers without anybody even noticing.

Christian’s fear is that unless minimum engineering and manufacturing standards are written into any applicable legislation and regulation, many cheap manufacturers looking to pinch pennies will try to get by with a bare minimum and reduce reception to the quality of a “hotel radio.” In other words, a radio without any quality to speak of.

An even bigger if is the inclusion of an HD chip. It is precisely at this point that Christian gets excited. He noted the difficulty radio has had getting HD established, in large part due to the lack of receivers. The fact that just about everybody has a cell phone would solve that problem.

It would also address one of Christian’s major concerns – the fact that AM radio has not yet been mentioned as part of the analog cell phone package. With a requirement for an HD chip, he said it would be a simple matter to put key News-Talk-Info AM giants on a digital FM side channel and entrée onto cell phones alongside FM stations.

Smulyan cautioned that there are other concerns on the HD side. Pricing is one, power consumption another. But getting HD on cells would definitely be something to consider as part of the mix as soon as it’s feasible, and it may well be feasible now. He said the current goal is to put something before Congress that has a chance to pass.

iBiquity head Bob Struble confirmed that Smulyan has a point – HD can go on mobile today, but currently, the price for an HD chip is considerably greater than an FM chip, running in the $5 range. But he added that constant innovation is rapidly bringing that price down, and he expected it to make it as low as $2 in a couple of years or so, and with increased demand it could plunge even further – and yes, putting HD on cell phones would create a major league increase in demand.

Power is also a concern – current consumption is OK, at 8-12 hours or battery life. But that number is also moving constantly in the correct direction toward less power use.

As far as the PRA situation goes, Struble said, “iBiquity has no corporate position at all” – it’s a matter between radio and the record companies. But he also said his company is out there every day pitching HD radio to cell manufacturers on its own merit.

Christian noted that HD radio on cells ought to be a dream come true for regulators. “This is your EAS in your pocket,” he said. In a time of emergency, almost everybody would be able to turn to their cell phone for the latest updates from radio when other forms of communication would be experiencing failures.

Smulyan noted that from a radio operator’s perspective, getting the broadcast signal on cells off air rather than via web stream was critical.  “In NYC, I can send one signal to 15M people for one price. Streaming costs every single time we send to a listener.”

Christian has admitted publicly, and recently, that he is not the world’s leading expert on the marriage of radio and cell phones, but he has a simple answer to any concerns about the current state of the art. If HD on cells is not quite ready for prime time, build it into the legislation with a delayed roll-out date – say 2012. He said if radio is going through a “sea change” like PRA, the NAB should use the opportunity to push hard for the best deal possible, and that FM and HD should be part of it.

Smulyan is on the same page. “Ultimately we all agree that having an HD chip is critical, it’s just not something that we may be able to get done right now,” he said.

RBR-TVBR observation: Today, Monday 8/23/10, is the day to let the NAB know if all this makes sense and should be pursued. It is an odd plank to bandy about in a negotiation like this as it ropes in an otherwise uninvolved third-party industry – and one that is already balking at the idea – but putting radio on cell phones certainly makes public interest sense, and once they get used to the idea, we think manufacturers will happily put in whatever chip they must to whatever specifications and pass that cost on to consumers. And the cost shouldn’t be all that noticeable to consumers.

RBR-TVBR recommendation: Broadcasters must share in the voice it is your business and future. So what do you think? Post your comment window below is waiting for you to weigh in. All voices must to be heard in this open forum.

For a complete review on PRA reports see Google News – ‘PRA’