Sprint’s announcement that it will put FM analog chips in some of its
phones later this year heralds more work for the radio industry and for Emmis
Communications. So says Emmis Senior Vice President/Chief Technology Officer
Paul Brenner of Emmis shows off the
prototype NextRadio app in iBiquity Digital’s booth. The app ran on a Samsung
Galaxy S running Android and a Nokia Lumia 900 running Windows 7.5.
by Leslie Stimson
Sprint has agreed to activate FM analog tuners in a total of some 30
million devices over three years. The carrier will determine which models get
chips, but Brenner said devices will include smartphones and possibly tablets
and “phablets,” which are large form-factor phones.
Free local FM radio would be delivered
on these devices through apps like one Emmis is developing called NextRadio.
Consumers today who want to hear radio stations on most smartphones must do it
via streaming and thus incur data charges.
Serious negotiations on the FM chip took
some six months to a year, according to radio executives involved.
The structure of the legal agreement
remained a work in progress in early February.
Emmis is acting as a place-holder or “point” for what will become an
industry consortium so Sprint can negotiate with one party, according to Emmis
CEO Jeff Smulyan. Under the deal, Sprint would embed and activate FM tuners in
a minimum of 30 million Sprint phones over three years. In exchange, the
industry would provide the carrier $15 million worth of station ad inventory
for each of the three years, according to Smulyan.
He told Radio World, “If every broadcaster gives up $10,000 worth of
inventory per year per station, it will easily take care of itself. … We will
translate those into dollars for Sprint.”
last fall proposed that the radio industry offer incentives to persuade carriers
to integrate or activate FM reception. Since the deal was announced, Smulyan
has been working to get broadcasters to pledge inventory; he said every major
radio group and several smaller ones have agreed.
Broadcasters hope this will serve as the
model to encourage other wireless companies to sign on.
“Mobile ad spending is the
growth business for technology right now,” Brenner emphasized.
Reacting to the news, Pandora Senior Vice President of Sales Steve
Kritzman told Radio World that in the past, companies valued radio advertising
because it was the last thing a consumer heard before making a purchase. Now,
he said, that role is filled by mobile phones.
“We’re thrilled,” said iBiquity Digital President/CEO Bob Struble in
response to the chip news. If stations can show the case for FM analog chips in
phones, he said, it also helps iBiquity make the argument for HD Radio chips.
The radio industry hopes the Sprint
announcement is just the first of many.
Emmis has helped lead the effort to convince wireless companies to offer
over-the-air FM reception of local radio signals; the Sprint development is
seen as its first big win. For such reception to be possible, though, the
consumer will need an app to play that content. Multiple companies could
develop such apps.
Emmis has been working on its NextRadio
app in hopes it will be adopted by others in radio. The app will allow playback
of all local FM signals but also provide access to enhanced features that
connect to a multitude of content types on the Internet.
Asked whether NextRadio was part of the Sprint agreement, Brenner said,
“NextRadio has been presented as a universal FM radio application with the
ability to present a common-listener experience and mobile advertising features
synchronized with over-the-air radio. Sprint will launch with NextRadio because
they need a single party to represent this commercialized application.”
addition to the ad time promised by the agreement, Sprint will receive 30
percent of the revenue from ads on the app. Emmis will manage that traffic,
make sure Sprint gets its money and receive a small management fee, presumably from
broadcasters that use the app. The yet-unspecified fee would apply only to
stations that use Emmis’ TagStation software in conjunction with the the
NextRadio app; conceivably, stations could do this on their own instead, but
they would need to develop an app that complies with Sprint’s specs, he said.
At the behest of NAB Labs, Emmis developed a predecessor of the app last
spring that included HD Radio. Asked why the initial app will be only analog,
Smulyan said carriers didn’t want to spend the extra money to include a digital
radio chip right now. He characterized the analog chip as a “first step.”
Now Emmis’ goal is to make the analog app work in several iterations of
Sprint Android and Windows devices.
“We’ve turned a dirt road into a gravel road,” Brenner told Radio World
as he demoed the prototype in the iBiquity Digital booth at the CES Show in
Shortly after CES, Emmis Senior Vice
President/Treasurer Ryan Hornaday shed more light on the deal.
Speaking to the Nobel Financial Conference, Hornaday said NextRadio will
be pre-loaded on the Sprint devices, so consumers can “hear over-the-air radio
without data charges.” But the richer app experience also “opens up a new
advertising category for us.”
“We can deliver unique advertisements
that you can see at the same time you hear the audio,” Hornaday said. The app
user can see album art and playlists delivered over the backchannel of cellular
or Wi-Fi. He described location-based advertising that can include couponing or
QR codes, for example.
As noted above, non-Emmis stations that want enhanced content to appear
on the NextRadio app will need a licensing agreement with Emmis plus its TagStation
software — or must build their own source content solution that complies with
the mobile app capability and obligations for inventory, reporting and
processing mandated by Sprint.
“Through TagStation we know what content is being played,” including the
songs and ads, Hornaday said. With the TagStation software, the audio is
synched with visual elements.
He described the NextRadio app as a
revenue share product. “We’re paid based on the advertising.” Emmis would receive
a portion of the ad revenue that airs on the phone to cover the cost of
developing the product, Hornaday said, adding the company hopes to roll out commercial
smartphone product and an associated broadcaster content network by summer.
Smulyan confirmed that the broadcaster
is in talks with other carriers. Hornaday said Emmis would love to have the app
on the same platform with other telecom carriers like AT&T and Verizon.