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Sprint/Radio FM Chip Deal Details Emerging

Smulyan seeing “overwhelming” broadcast support so far for FM chip deal

More details are coming out about the FM chip deal Emmis announced with Sprint at the recent International CES.

That’s because Emmis, acting as point for what broadcasters hope will become an industry consortium, is busy rounding up commitments from radio groups.

We had reported that Sprint had agreed to embed and activate analog FM tuners in some 30 million of its cellphones over three years in exchange for a reported 30% slice of the business from “interactive” advertising or activity based on Emmis’ NextRadio tuner app.

Now, Emmis CEO Jeff Smulyan confirms the deal calls for Sprint to produce “a minimum” of those 30 million phones; in exchange for $15 million worth of station ad inventory from broadcasters over each of the next three years; that works out to about $10,000 worth of ad inventory per station.

Sprint would also receive 30% of each piece of “interactive” advertising business under the agreement; the details are still taking shape.

Smulyan tells Radio World the $15 million would be paid in quarterly increments, including agreements on how many FM-enabled phones will be shipped each quarter.

Emmis has begun reaching out to broadcasters in order to garner support. Smulyan says the feedback from both large and small radio groups so far has been “overwhelmingly positive.”

The company has said it aims to get its NextRadio tuner app completed before next summer. Stations would license the app in conjunction with the TagStation middleware to create a streaming content and advertising environment.

When asked what happens between now and when the actual cellphones are shipped, Smulyan said, “We’ve got to put this inventory plan in place, including getting all the pledges from everybody. We’ve got to convert that into dollars for Sprint.”

Emmis would manage the back-end traffic and receive a small fee for that effort, he said.

Emmis also needs to make sure its tech team, led by SVP/CTO Paul Brenner, gets the NextRadio tuner in the phones. “And then we hope every broadcaster says ‘How can I make my radio station look great when this phone hits the shelves?’ How do I create an interactive experience?’ That’s the goal.”

Getting an FM chip into cellphones, along with exciting visual elements, in addition to creating a back-channel for couponing or ticket purchases, for example, has the potential to be a game-changer for radio and its audience, Smulyan believes.