FM Chip Panel Shows International Progress, Challenges

There are benefits for broadcasters, listeners and governments
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Representatives from the United States, Canada and Mexico addressed hybrid radio via a panel entitled “FM Activation in Smartphones: What Are the Benefits?” at the NABA Future of Radio & Audio Symposium.

Moderated by Commonwealth Broadcasting President and CEO Steve Newberry, the panel acknowledged that FM chip activation has moved forward at an uneven pace in the three North American nations. However, Newberry emphasized that “there is hope.” The panelists outlined the steps that broadcasters and the FM Chip Working Group have already taken, as well as reminded the audience why radio in cellphones is so vital and they also explored the next best steps.

NABA FM Chip Working Group Chairman and NAB Senior Director of Advanced Engineering David Layer estimates that, as of Q3 2016, there are 100 million hybrid-radio-equipped smartphones, according to NAB and NABA’s research tracking FM chip activation in smartphones. Mexico is leading the way with 78.1% of its smartphones sold with activated chips, followed by Canada with 45.1%; the U.S. lags behind with 30.3% of smartphones sold with FM chips activated. Part of the secret to Mexico’s success, perhaps, is the fact that cheaper Android phones are more popular than iPhones, which do not activate the FM chip in any country at this time. In the U.S. alone, 94% of phones sold without FM chip activated (44% of total sold) are iPhones, Layer noted. Additionally, Layer said that anecdotal evidence indicates Canadian numbers are a “little high,” although the data seems accurate thus far.

BLU Products Inc. Senior Director for Business Development Mariana Ferreira began by explaining her company’s role in the mobile marketplace as a relatively new entrant. The Miaimi-based cell phone company was founded in 2010, producing “unlocked” smartphones and feature phones (primarily popular in Latin America). With 50% of its presence in the US and the rest in Latin America, she offered an international perspective as well as that of a manufacturer. In that light, Ferreira explained that it’s important to understand that manufacturers don’t have an incentive to block FM chip activation — carriers do because of data. However, the FM chip does face competition from streaming services already present in smartphones. To combat that, she said, FM chip proponents must emphasize interactivity and educate listeners about FM chip benefits (it’s free, no data consumption and the extension of battery life).

Cámara Nacional de la Industria de Radio y Televisión Director of Engineering Ernesto Reyes offered a perspective from Mexico, which has more than 2,500 broadcast radio and TV stations. Making the country’s FM chip success all the more unlikely, Mexican broadcasters have seen three different regulators during the course of seven years. CIRT credits its progress to highlighting the importance of radio reception during national disasters and emergencies and how radio can help government spread information effectively. Another important message, Reyes said, is the belief that users have the right to use all the features of the smartphones — consumer choice, essentially. However, a 2016 DTS study showed that 29 of the most expensive smartphones sold in Mexico did not have the FM radio turned on — this despite the high penetration of the market at large. Hurricane Patricia became a case study of radio’s importance during times of natural disasters, and the government ultimately awarded its 2016 Civil Protection Award to CIRT because its efforts in coastal states helped to prevent any casualties during the storm. By the end of Q2 2017, Reyes said that IFT is expected to publish its final technical position, in which it will likely mandate FM chip activation in the country. Mexican broadcasters have also been invited to work with FM+ and NextRadio; FM+ is currently used by most broadcasters.

Canadian Association of Broadcasters Technical Advisor Kirk Nesbit spoke to the situation in Canada. Overall, the number of radio stations in Canada are growing; although AM stations have decreased about 10% over five years but FM stations increased by 10% over that same period — 80% of new stations in Canada were on the FM band, now totaling 549 FM stations. According to Nesbit, Canada has had a year of mixed priorities (launching streaming portals, HD Radio, hybrid radio conversation is shifting to the car; also FM chips in smartphones). For example, in 2016, broadcaster Bell Media aligned with iHeartRadio, others aligned with Radioplayer. Also, HD Radio has launched in many major markets. At this juncture, Canada’s regulator has opted for a “marketplace solution” to FM chip activation. This is in part because the current replacement cycle of smartphones is about two to three years in Canada — offering a real opportunity for FM chip activation but also point of distraction/confusion because it does not motivate carriers and manufacturers to go backwards and work on “old” phones.

The panel concluded with questions from the audience. Marty Garrison of NPR asked Paul Brenner about Pai’s sincerity in the area of FM chip activation. NABA Executive Director Michael McEwen replied that Pai’s public comments will tell manufacturers that he’s sincere. He added that it might “not be a mandate but carriers will get that [the issue is] important to the chairman.” Brenner also noted that free market demand and public safety meet in the middle.

McEwen says Europe is activating DAB chips in smartphones. NABA is also trying to get them to introduce FM chips through the European Broadcasting Union and European Union. Additionally, the World Broadcasting Unions will try to get the International Telecommunication Union to recognize importance of FM activation in case of emergencies.

NAB CTO Sam Matheny added radio’s strength is international. He explained that manufacturers don’t want to have to “skew” for different markets — Japanese officials said the earthquake/tsunami caused them to rethink their “band plan” because of radio; Chinese authorities are also thinking about it — often built-in as part of communications chip module (with Bluetooth and LTE, etc.).

 



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