The radio industry could be sitting on a profit-making goldmine.
Beasley Broadcasting Group CEO Caroline Beasley sees the potential.
Now, the FCC Chairman during the Reagan Administration is ready to make a big splash with a technology that can give HD Radio a boost — and make FM radio a powerful tool in the growth of “IoT.”
How is this possible?
That’s exactly what we asked Mark Fowler, now Chief Marketing Officer of LN2.
RBR+TVBR originally offered this article to readers on Oct. 3, 2017. It was made available to readers of the Weekly Tech Update on Nov. 27, 2017.
You say you’re going through changes/Every day it seems your life is up and down
And you say that you’re lookin’ for an answer/Everywhere you look it seems you can’t be found
Those are the opening lyrics to the 1986 dance and R&B track “Midas Touch” by Midnight Star. Those words may also provide a good inner monologue for many broadcast media C-Suite executives looking for a long-term solution to continued revenue growth.
But, what if that growth were to come from something that has little to do with what format will generate the highest ratings, leading to more dollars? What if was tied to the “internet of things”?
It’s possible, says Mark Fowler.
Who’s that? Longtime industry executives will recognize Fowler’s name for his time as the head of the FCC from May 1981 through mid-April 1987. For those unfamiliar with Fowler, he once noted that television was little more than “a toaster with pictures.” Fowler, as FCC head, led a body that deregulated the television industry. As The New York Times reported in January 1987, “In the Fowler era, broadcasting licenses, once rigorously monitored by the FCC, became commodities traded on the open market. Stations changed hands overnight and then changed hands again in a flurry of speculation, profit-taking and—inevitably—miscalculation and bankruptcy.”
From there, Fowler served as a communications counsel at Latham & Watkins until 2000. During that time, he led PCS wireless activities at Bell Atlantic. He also created a company that consolidated 800 MHz band licenses in several Midwestern cities and sold it to Nextel, which is now a part of Sprint, for $400 million.
Three years later, in 1997, Fowler helped establish the first shared tower company, UniSite. This was sold to American Tower in 2001 for $200 million.
Today, Fowler is focused squarely on the development of advanced digital communications receiver and decoder technology that enable systems using digital signals to receive, store, retrieve, and decode information more efficiently than any other competitive system.
Remember this when thinking about FM radio signals and HD Radio.
As Fowler sees it, the technology LN2 can bring to radio broadcasting companies can greatly help advance the “internet of things” — the wireless communications technology that now powers not only a Google Home or Amazon Echo, but a wide variety of home, commercial, industrial and municipal electronic systems.
How? Using HD Radio to power IoT can bring big coverage improvements for wireless digital systems and increase in storage capacity of digital data storage systems including the cloud.
There’s also an added benefit with HD Radio coverage increases for the radio company’s programming and sales teams.
¿Cómo Se Dice …?
If all of this sounds fascinating and wonderous, one may wonder if there is a communications gap — or lack of cognizance — of these capabilities.
“You are 100% correct,” Fowler says. “Most broadcast executives don’t understand this.”
Fowler isn’t shy in singling out the radio industry’s most prominent leaders in noting how they may be unaware of this technology.
“If [Entercom head] David Field makes a fiery speech at the Radio Show exhorting everyone for not getting 10% of the total revenue pie, he’s living in a box and it’s called ‘broadcasting,'” Fowler says.
His point: Radio, since its earliest days in the 1920s, has used an advertiser-supported model using AM, and then FM, for several decades. With the advent of other technologies, t he advertising market is flat or down. What Field and other executives don’t know is that his company, and all companies, can benefit from what LN2 is ready to offer.
How does it work? LN2’s advanced receiver and decoder technology makes signal receivers more sensitive, so that they can better receive, understand and retrieve weaker signals. The technology consists of software-based circuit description, a “blueprint”, that enables a chip manufacturer to build a small, unique piece of the receiver hardware and/or software that is embedded in a chip implementing the receiver.
LN2 is working closely with Xperi, the present owner of HD Radio, and Europe’s DAB+ governing body.
Will radio stations have to invest in new equipment, or allocate funds to enjoy these potential new profits? Not at all.
“This technology is in the receiver,” Fowler notes. “It’s not about boosting the power in the transmitter. Radio stations will enjoy the same benefits of HD Radio, yet this increases the signal 4db to 5db on average. That’s very big.”
This addresses one of the biggest complaints about HD Radio reception: The signal doesn’t go very far. It also brings HD Radio to those who don’t own luxury car models such as those of Lexus, which include a “very expensive” dipole antenna to pull in HD signals and all subchannels.
Tapping Into The Semiconductor Community
The road to new revenue riches for the radio industry could simply involve something that has been getting a lot of news coverage in recent days from trade publications: a chip.
While FM chips in smartphones is a hot-button topic that has brought conflicting information from the tech world, the NAB, and industry observers who think they have the answers, HD Radio’s next big superhighway of opportunity involves the semiconductor community.
“A baseband chip comes in and processes a digital signal,” Fowler says of the basic process of how an HD signal can be brought to receivers and “translated” for public consumption.
He adds, “Our technology allows the chip to receive a much weaker HD signal when there is more noise around that signal, so you don’t get that loss of signal and goes as far as the analog signal.”
There are many more technical aspects to the technology LN2 seeks to bring on a wide scale, through investment opportunities it presently seeks.
The biggest takeaway is that, in addition to HD Radio growth after years of lost opportunities to Sirius XM, Pandora, Spotify, TIDAL, Apple Music and personal audio and video choices, it may finally be gaining momentum — although some may argue that the “in-band, on-channel” (IBOC) deployment of HD Radio by scared broadcast owners some 15 years ago was a mistake, given the rise of DAB+ in the United Kingdom and some European nations.
There’s certainly debate for that. But, with Fowler in the driver’s seat, HD Radio’s biggest boost agent could be a “data channel.”
That’s where “IoT” capabilities come in to the conversation.
“That’s where I see broadcasting changing its business model,” Fowler says. “But, it is a chicken/egg thing.”
He explains, “All is takes is one part of a station’s HD capacity and making it a digital data transmission channel. It can be done in many different channels, and not as a public channel. This technology increases data speed, and you could sell a ‘Smart City’ on using digital transmission to turn on flashing lights, activate water systems, control highway information signs, and so on. There are all kinds of different ‘Internet of Things’ capabilities, and there’s also the capability for two-way data.”
A Beasley Believer
LN2 expects to start receiving revenue within two years and become profitable within three years, with profitability in tens of millions of dollars within five years and thereafter.
Yes, Fowler predicts “conservative” 2019 revenue of $12.4 million, and by 2023 conservative revenue of $170.9 million.
This is explained through the list of LN2’s potential customers, semiconductor companies in addressable markets that include NXP, Intel, Qualcomm, Silicon Labs, ST Microelectronics, Texas Instruments, MediaTek, Avago/Broadcom, Marvel Technology, Google, and Cisco.
There’s global growth potential for LN2, a privately held operation based in the heart of Tysons Corner, Virginia, a 45-minute ride on the new Metro Silver Line from Capitol South Station and the three House Office Buildings. LN2, led by CEO, CTO and founder Dr. Brana Vojcic, also has an office in Athens, Greece.
Vojcic and Fowler represent two of LN2’s three members of the company’s board of directors. The third member is Caroline Beasley, CEO of Beasley Broadcast Group.
Beasley is the biggest shareholder in LN2, with 25% ownership of the company. Fowler praised Caroline Beasley for being “one of the biggest broadcasters with the greatest foresight.”
In mid-September, conversations were ongoing with “a big European semiconductor company,” as LN2 seeks $3 million to $5 million in staged financing. Its burn rate is less than $100,000 per year.
While LN2 presents an exciting future for radio broadcasters, what does this mean for the current systems used for the Internet of Things? Could radio and the NAB be up for a fierce battle from Silicon Valley, and the companies that just acquired millions of dollars of spectrum from broadcast television companies in the first-ever FCC incentive auction?
That’s a definite possibility. But, Fowler reasons, “Economics trumps point-to-point broadband. Our technology can provide a range of 30 to 35 mile with a good, strong 1 millivolt signal. That’s the equivalent of 200 cell tower sites. There are so many points to failure and this is so much more expensive. Our technology is in the public interest and represents a really good use of spectrum.”