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HD Radio represents a significant technological advancement in the broadcasting industry. By using digital technology, it offers CD-quality sound for FM stations and FM quality for AM, allowing multicasting up to 8 additional channels per analog signal. Despite its potential, the industry faces challenges such as inefficiencies in ad delivery, declining listener engagement, and limited content variety. For HD Radio to thrive, it will need to improve listener experience, enhance advertising revenue through innovative models, and leverage strategic partnerships, particularly with automobile manufacturers to increase adoption and revenue.
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Daxiang Xu Business Bernard Low Computer Science Boris Logvinskiy Economics Shu Yang Quek Computer Science OAP: HD Radio
The Radio Problem • Minute advertising revenue growth • Inefficiency in delivering ads to listeners • Sound quality • Decreasing time spent listening • Little content variety
What is HD Radio? • Transmit radio signals using digital technology • CD Quality playback for FM Stations • FM Quality for AM Stations • Multicasting • Allows up to 8 HD channels per current analog channel • Other data transmission
Radio Industry Sales from 1998 to 2011 * Sources: Radio Advertising Bureau (1998-2006); BIAfn(2007-2011)
Market Needs Advertisers • Listeners • Quality • Niche Markets • Wide Reach Broadcasters • Increased revenue • Increased listenership
Business Model • Data Capability - On the screen of the receiver, it can display 3 lines of texts: • Multicasting - one radio station can power several sub radio channels simultaneously. • Revenue comes in the form of sponsored hours, sponsored station
Potential Future Revenue • In the next 18 to 24 months, HD radio stations will have the infrastructure to generate revenue through: • Conditional Access Capability • Pay Per Listen • Value added service for the blind • Audio on demand • Information on demand via HD Radio receiver screen • Strategic Partnership with automobile manufacturers • BWM and Clear Channel Radio • Strategic Partnership with other companies • Apple iTunes and Ibiquity
Customers • Currently in the Early Adopters Stage • “Push” platform instead of “pull” • Main target in the next 3 – 5 years are new car buyers • Customer initial interest in HD Radio jumps to 3rd from 16th place after price is revealed • 4M potential new adopters per year from current partnerships • End Goal: Universal Adoption of HD Radio – 250M in the U.S.
Partners & Allies Songs tagging Automatic adopters Navigation capabilities Increase content
Current Competitors • Satellite Radio • 13.6 m subscribers in 2007 • Internet Radio • Average week - 30m listeners • MP3 Player • 27m have listened to a podcast before • By 2010, 66m listeners to podcast
Share of Market 2007 Competitive Media Usage Overview Update – May 23, 2007 (http://www.bridgeratings.com/press.05.23.07.CompMediaUse.htm)
Future Competitors • Internet Radio - no mobility (in-vehicle listening) With development of wide-area wireless internet technologies, this may change. • Satellite radio can provide information on the move as well; with enough reach, advertising model might work for them as well.
Risk Sunk Costs Advertising Content Other Services Demand Sources FCC R&D