KAGAN: HD RADIO WILL BRING IN $1 BILLION IN THREE YEARS. From today’s Inside Radio: “[$14.5 million is] a pretty small revenue number [for 2008], but Kagan predicts that figure will balloon to $112 million next year. The biggest portion will come from traditional spot radio sales through multicasting. But by 2011 Kagan says those additional revenues will swell to $1 billion.” This, incidentally, was a follow-up to Inside Radio’s lead paragraph:

HD MILEPOST: COMMERCIALS ARRIVE ON HD2. “For the first time since launching HD2 channels, stations have started inking deals with advertisers as the HD Digital Radio Alliance now allows ‘name-in-title’ sponsorships,” Inside Radio wrote, reporting that Emmis rocker KSHE, St Louis has signed a pair of underwriters: “MD Rich Dalton tells Inside Radio that HD2 advertising could be a ‘gateway’ to bring in local advertisers who don’t have enough dollars to do traditional radio advertising.” Read more from Inside Radio here.

RAIN ANALYSIS: WHAT IS KAGAN RESEARCH SMOKING? These are inconceivably high numbers! Let’s do the math. Assume the current 400,000 installed base of HD Radios increases to, say, 4,000,000 in three years. (Reasonable?) At any given moment, about 600,000 of those owners will be listening to a radio somewhere (based on Arbitron’s Persons Using Radio (PUR) figures). Of those people, about 200,000 (about 1/3) would be listening in their car (or home or office — whichever location it is for which they bought an HD Radio). I’d guess that perhaps 70,000 of those people (1/3) would be listening to an HD2 channel (as opposed to an HD1 channel, which wouldn’t logically create any significant increased revenues). Running, say, six units an hour at a sky-high $20 CPM would bring in industry HD revenues of $55 million. That’s a far cry from Kagan’s estimate of $1 billion. (Which number(s) would you like to change to get that estimate up to $1 billion? (Run 120 commercials per hour? Price spots at a $400 CPM? Sell 80 million HD radios by 2011?))

AND YET THE KAGAN ESTIMATE IS A DOWNGRADE! A year and a half ago, Kagan Research was estimating that 2011’s HD2 revenues would be $1.6 billion (as shown here. (Up $.6 billion, down $.6 billion, whatever.)

YES, THERE’S A WAY TO MAKE HD RADIO WORK. I’ll be discussing the topic this week at Canadian Music Week in Toronto and next week at Radio Ink’s Convergence Conference in San Jose, and also in upcoming issues of RAIN. But I don’t see how it could conceivably become a $1 billion business by 2011.

GLOBAL DEPLOYMENT OF WIMAX CONTINUES. Tokyo-based Fujitsu Ltd says that its BroadOne WX300 (pictured, right) has been selected as a critical part of the development of nationwide WiMAX services infrastructure by UQ Communications Inc, a mobile WiMAX operator in Japan that is jointly owned by KDDI, Intel, East Japan Railway, Kyocera, Daiwa Securities, and the Bank of Tokyo-Mitsubishi. UQ aims to start offering commercial WiMAX service in Japan in 2009.

RAIN ANALYSIS: Tens of thousands of little 40-lb. antennas like these are currently being deployed in major cities around the world, creating a coverage area hundreds of times larger than the most powerful AM or FM antenna. (If you’re a broadcaster, you can choose to see this as either threat or opportunity.) Read the full article here.

DEVICE OF THE DAY: SONY ERICSSON XPERIA X1. Says Times Online (U.K.), “This is one covetable device. Housed in an elegant, arc-shaped sliding phone…the massive three-inch screen divides into nine panels…which are arranged at the owner’s discretion. They can either be simple applications, like a calculator, or full web pages — e-mail, YouTube, Google and so on. Unlike many phone menus with icons, however, the Xperia’s panels aren’t just pictures; they’re the full page — in miniature, and they glisten before you, updating in real time. Navigation is via a optical joystick at the side… or full touschscreen, like the iPhone… Other specs: 3.2-megapixel camera, 7.2 megabit per second HSDPA, and ARM’s latest series 11 processor, meaning it will be, well, ultraswift. Out: second half of the year.” Read the full review here.

Comment

1. “KAGAN: HD RADIO WILL BRING IN $1 BILLION IN THREE YEARS.

   hahahahahahahahaah!!!!!!!!!

   — bobyoung · Mar 7, 07:09 PM · #

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