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Boris Logvinskiy Economics

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

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Boris Logvinskiy Economics

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  1. Daxiang Xu Business Bernard Low Computer Science Boris Logvinskiy Economics Shu Yang Quek Computer Science OAP: HD Radio

  2. The Radio Problem • Minute advertising revenue growth • Inefficiency in delivering ads to listeners • Sound quality • Decreasing time spent listening • Little content variety

  3. 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

  4. Market Overview

  5. Radio Industry Sales from 1998 to 2011 * Sources: Radio Advertising Bureau (1998-2006); BIAfn(2007-2011)

  6. Market Needs Advertisers • Listeners • Quality • Niche Markets • Wide Reach Broadcasters • Increased revenue • Increased listenership

  7. 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

  8. 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

  9. 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.

  10. Partners & Allies Songs tagging Automatic adopters Navigation capabilities Increase content

  11. 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

  12. Share of Market 2007 Competitive Media Usage Overview Update – May 23, 2007 (http://www.bridgeratings.com/press.05.23.07.CompMediaUse.htm)

  13. 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.

  14. Risk Sunk Costs Advertising Content Other Services Demand Sources FCC R&D

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