NEWS

HD Radio breakthrough brewing — high odds that phone mobile integration will come in 2012. There are 22 car brands currently offering HD Radio as either standard or as feature, and that has iBiquity feeling quite good about where the technology’s rollout is with automakers. Their attention is now focused on wireless phone companies and there are hints progress is being made with a “major launch” expected by year’s end. A prototype device will be on display for the “techeratti” to see at the Consumer Electronics Show this week in Las Vegas. The required chipsets are getting cheaper and require less power, two of the hurdles iBiquity’s had to overcome with wireless companies. “There’s no actual commercial device, but we anticipate you will see that in 2012,” iBiquity CEO Bob Struble says. While he declines to elaborate, based on the lead time needed by handset makers it’s likely a company has already committed — but for competitive reasons it’s keeping the news from rivals in the highly-competitive cell phone business. The HD Digital Radio Alliance is working alongside iBiquity to sell the technology to wireless manufacturers and carriers, sweetening the pitch with promises of on-air support along the lines of what’s been given to other partners. Asked if the first deals will be reached with small players or struggling handset makers, Alliance CEO Peter Ferrara offered few clues, pledging only, “This is going to be a much bigger launch when it comes.” When iBiquity opened its doors in 1998 there was little talk of radios on cell phones. Now it has become a significant focus. Struble says it’s taking a more concerted coordinated effort from all parts of the industry in a way in which getting in car dashboards didn’t require. “It has to be a lot more than just a music player,” he says. The wireless industry’s eyes must be opened to digital radio’s capabilities, including the money-making potential of song tagging. “Price won’t be the issue,” Struble explains. Instead he says the radio industry is developing a vision that illustrates how broadcast radio is a very important technology that needs to be in phones and there’s a good value proposition around it. “That sale still needs to be made,” Struble says. When it does, it may also help bring around some in the radio industry who remain unconvinced the money spent has been worth it, he says. “Analog radio won’t make it onto phones — it’s not a 21st century consumer experience,” he says. “So if HD Radio is the ticket to get into phones, and I believe it is, that will turnaround a bunch of naysayers.”

Ibiquity: HD Radio hit critical mass with carmakers two years ago. Five cars and dozens of products featuring HD Radio will fight for attention at this week as the tech world makes its annual pilgrimage to the Consumer Electronics Show in Las Vegas. Eight years after the first HD Radio stations went on the air, iBiquity says there are now more than six million digital radio receivers in use. “As we head into 2012, all indicators point to a great year for HD Radio technology,” iBiquity CEO Bob Struble says. The scoreboard shows 22 carmakers are now including digital radio as either standard or optional equipment. With about 40% of radio listening done in cars — more in many dayparts according to Arbitron — the industry pushed iBiquity a decade ago to begin its efforts in Detroit. BMW was the first to offer HD Radio in 2006 and the list has steadily grown. Two months ago iBiquity at last broke into General Motors on the Cadillac brand, leaving Toyota as the last big holdout. Ibiquity won’t say if either GM or Toyota has committed further and simply not yet gone public with their plans. But COO Jeff Jury says, “We are past critical mass in the OEM auto segment.” The focus is now on getting other brands to follow the lead of BMW, Volvo and Scion and make HD Radio standard equipment — as well as add new features like song tagging and Artist Experience, which displays visuals elements tied to programming and commercials. Beyond the dashboard more than 60 new consumer electronics products will be unveiled this week. For the first time some of the receivers reaching store shelves this year will include the ability to display local station guides and QR codes. Yet some consumers may buy a state-of-the-art radio and find local stations aren’t offering the advanced services. Only a handful of stations have invested in the $100,000 technology to beam images as part of Artist Experience so far, though Struble expects by the number to reach several hundred by the end of first quarter. “We see progress,” he says. “It’s slow, but it’s also gaining momentum.”

Ten-company HD Alliance fine tunes its role. In the six years since some of the biggest groups in the industry joined together to advance the rollout of digital radio, the HD Digital Radio Alliance has taken several roles. Over the past year and a half it’s taken on its most active mission to date: greasing the wheels to get HD Radio into consumers’ hands. Working in tandem with iBiquity, Alliance CEO Peter Ferrara says they’ve become a sort of “bank” for the industry. “We’re basically the industry’s currency for getting deals done for HD Radio,” Ferrara says. “We’re the folks that go out and help iBiquity close important sales and then we market that — and that’s all we market — we don’t do any more general consumer marketing.” That’s a big difference from the early days of digital radio when the Alliance coordinated subchannel formats among members. It later morphed its mission into educating the public through commercials explaining what HD Radio technology was all about. Members put hundreds of millions of dollars of inventory behind the effort. Today that airtime is being used to promote HD Radios at Best Buy and to sell Pioneer receivers at Wal-Mart, tied to iBiquity bringing those brands onboard. For a company like Ford weighing whether to include HD Radio in the Sync dashboard system, Ferrara says that helped seal the deal. “The Alliance member companies played a huge role in making that happen because we stepped up and provided Ford the marketing muscle on the air to go out and talk about HD Radio and the new Sync products — and that’s been consistent in every launch that has occurred over the past two years.” He estimates the ten broadcast groups will air nearly $100 million worth of ads for various partners in 2012. The other more nuts and bolts role the Alliance is playing is through the HD Radio Technical Task Force. It’s working with broadcasters to iron out engineering kinks that can frustrate listeners, such as aligning the delay between analog and digital signals and making sure the iTunes tagging is working correctly. Listen to the latest HD Digital Radio Alliance commercials HERE.

Inside Radio Readers Poll: Large segment of HD Radio naysayers remains. HD Radio may have added new car models and devices to its growing list of consumer electronics options in the past year. But most respondents to an Inside Radio survey think the technology won’t reach critical mass for a few more years, if ever. One-third say the tipping point won’t come until 2015 or later — 9% say in 2013 and 10% expect 2014 to be the big year. Just 4% of those responding to Inside Radio’s unscientific online survey believe HD Radio will reach critical mass this year. By far the biggest share is unconvinced it will happen at all. More than four-in-ten (44%) respondents think HD Radio will never catch on. The results are nearly identical to last year.

Family Radio signals it may be selling its New York FM. Following Family Radio’s deals to sell stations in Washington and Philadelphia, a move with a New York FM suggests it may be next in line. Family Radio has filed an application with the FCC to convert WFME, Newark, NJ (94.7) into a commercial operation. The Class B FM is currently a noncommercial religious teaching station. The not-for-profit didn’t offer any other details in its filing. Family Radio filed similar requests for its FMs in Philadelphia and Washington prior to their sale to Merlin Media and CBS Radio for a combined $31 million.

Ex-FCC chairman Powell questions his indecency vote. The political firestorm that erupted after the infamous “wardrobe malfunction” at the 2004 Super Bowl led Congress to a ten-fold increase in indecency fines and at the FCC to begin fining radio and TV stations for “fleeting expletives.” But nearly eight years later, former FCC chair Michael Powell thinks the FCC made a bad decision. “If I were voting again, I would have dissented,” he tells Bloomberg. Critics of the FCC’s indecency policy say it unconstitutionally chills free speech rights. Powell agrees, noting free, over-the-air broadcasters are forced to live with rules that satellite radio and pay television don’t. “I’ve always been deeply troubled by the way the First Amendment changes when you change channels,” he says. Powell, a Republican, is now president of the National Cable and Telecommunications Association. His recanting comes as the Supreme Court is set to hear its first indecency-related case in more than 30-years tomorrow.

More evidence of tougher stance as FCC puts brakes on Des Moines move-in. Forget the bright lights of the big city. Under chair Julius Genachowski, the FCC has taken a hardline approach to move-ins. That shows no sign of letting up as the agency puts the brakes on a Des Moines move-in. Stuart Epperson Jr.’s Truth Broadcasting aims to move religious teaching KTIA-FM, Boone (99.3) to Johnston, IA — roughly 36 miles closer into the Des Moines market. But low-power KFMG-LP (99.1), owned by the Des Moines Community Radio Foundation, objected to the move-in of a first-adjacent full-power FM. Truth countered that it should be allowed to make the switch, saying KTIA-FM would reach 312,451 more listeners by covering 78.5% of the Des Moines market as opposed to its current location, which doesn’t touch the metro at all. To move into an urbanized area, an applicant must show the result provides a town with its first local service. The FCC says its review shows Johnston is hardly independent from Des Moines, located only 13.5 miles from downtown, served by the city’s bus system and sharing a telephone directory. The FCC says its goal is to protect listeners in smaller communities and rural areas from losing their radio stations to bigger cities. In that respect the Des Moines population is already abundantly served, the FCC concludes, explaining it’s better for KTIA-FM to be the fourth FM service in Boone than the 17th station serving Des Moines. “The increase in population coverage does not establish that the proposed change of community would serve the public interest,” Audio Division chief Peter Doyle writes in the ruling. The move-in isn’t officially dead, however. Truth has 30 days to rework its application.

Winner’s Circle: Boston classic rocker reaches highest ratings in its 26-year history. The loss of a competitor, smart programming, a big cash giveaway and St. Nick’s early arrival all helped classic rock WZLX (100.7) deliver the loftiest ratings in the Boston classic rock station’s 26-year history in December. The upward spiral began in September, when cross-town adult hits “Mike FM” stepped aside to give Entercom sports WEEI an FM partner. The week before, WZLX began a month-long History of Classic Rock. Devoting each day in September to a different letter, the CBS Radio station played songs, artists and albums (and commemorated events) that started with the day’s letter. The new twist on the A-to-Z feature allowed WZLX to play more depth cuts and leverage its veteran airstaff’s deep roots in the Boston rock scene. “That played a part in bringing some people back to the radio station as they were getting back into their fall routines after summer vacations,” PD Mike Thomas says. The follow-up was afternoon driver Chuck Nowlin giving away $1,000 a day for 20 days to mark his 20th anniversary at the station in October. November brought a pair of big annual station events: a Veterans Day collection for the troops in Afghanistan and a pre-Thanksgiving Meat n’ Greet free meal for listeners, staged by the Karlson & McKenzie morning show. But the slam-dunk came when both of Boston’s classic hits stations went all-Christmas during the second week of November, making WZLX virtually the only place on the dial to hear classic rock. After a steady ratings climb, the station took a 9.1-12.4 hockey-stick jump in December in men 25-54 to finish first in both the monthly and the “fall book.” That’s remarkable in a rabid sports town like Boston, where two FM sports stations gobble up a massive chunk of male listening. “We have to give credit to the WZLX personalities because they bring the station to life,” Thomas says. They include midday personality Cater Alan, who arrived in 1998 after nearly two decades at WBCN, and night jock Kenny Young. One of the country’s first classic rock stations, WZLX hopes to keep its ratings roll going. After airing a post-Christmas top 1,100 songs countdown, it’s doling out free lift tickets in a free-ski Friday promotion and gearing up for a March date at the Boston Garden with the regrouped Van Halen.

Woman admits to stealing nearly $1 million from Sirius XM. Former Sirius XM Radio administrator Brenda Jones has pled guilty to one count of conspiracy to commit wire fraud in the theft of more than $900,000 from the company. She faces up to two-and-a-half years in prison and a fine of up to $50,000. The Washington Examiner reports Jones, 46, began stealing from Sirius XM within days of being hired. Her job was to pay vendors but police say with the help of a coworker she instead deposited money into her own bank account. Sirius XM has already won a multimillion lawsuit against Jones and Valencia Person, who so far hasn’t been charged with any crime.

Yucaipa-Magic Johnson media holdings keep growing. With investments in Riviera Broadcasting and Inner City Broadcasting, Ron Burkle’s private equity firm Yucaipa and Earvin “Magic” Johnson are looking for other radio deals. Their latest deal comes not in radio but in the digital space, illustrating their broader media plan beyond radio. One year ago this month the $550 million Yucaipa-Johnson fund made an eight-figure investment in the urban-targeted Vibe Holdings, producer of Vibe and Uptown magazines and the “Soul Train” brand. Now they’re merging Vibe with BlackBook Media, publisher of city-based nightlife guides, and the media digital technology developer Access Network. “We’re interested in consolidating great brands that reach a large and attractive audience — specifically those which index well in the online and mobile arena,” Johnson says, adding they have a particular taste for online and mobile media. Radio arguably fits that bill as well. The Yucaipa-Johnson fund may end up as the largest owner of Inner City Broadcasting next month at a bankruptcy auction crafted in a way in which the lenders have a preferred status.

New Jackson Hewitt ad campaign: Party like it’s April 15. With the Christmas holiday now over, a typically less joyous season is upon us: tax season. But the silver lining is tax preparation services continue to be big users of radio. Jackson Hewitt Tax Service says it plans to be back on the air in 2012. More noteworthy is its national spots will try an unconventional strategy — positioning the April 15 deadline as a joyful event. If that sounds odd, the company points out 75% of taxpayers are eligible to receive a refund. Branded with the tagline “Jackson Hewitt’s How You Do It,” the upbeat commercials feature the Montell Jordan ‘90s R&B throwback song, “This Is How We Do It.” The company will also use air personality endorsements to localize the effort. “Jackson Hewitt is a challenger brand, and going into tax season, they’re not going to play by category rules,” says 22squared CEO Richard Ward, which created the campaign. Jackson Hewitt spent $6.1 million on radio during the first three months of 2011, nearly half of what it spent across all media platforms. Even so, its budget was less than one-third of what category leader H&R Block spent. This year’s campaign also runs on television, digital and out-of-home.

Inside Radio News Ticker…Cumulus expands SweetJack...Mobile, Toledo and Cincinnati become the latest Cumulus markets to integrate the company’s group-buying program. Since its launch in Atlanta last April, SweetJack has grown its user base to more than one million members in 20 markets. Cumulus says a “significant national expansion” will continue throughout the year…Spotify shrinks streaming cap…Six months after it entered the U.S. market, webcaster Spotify is cutting how much streaming users can hear for free. It’s implementing a ten-hour monthly cap and users can only listen to a specific track five times or less. BusinessInsider says some users have begun receiving notices from Spotify of the change…Public file deadline further extended…At the request of 47 state associations and the Radio Television Digital News Association, the FCC is pushing back the comment deadline for creating online public files a second time. This time it’s by seven days. Comments are now due January 27 with reply comments due February 9. The FCC is determining how to put TV public files online, with plans to eventually have radio make a similar move…Florida host runs for Congress… Meridian Broadcasting news-talk “92.5 Fox News” WFSX-FM & AM (92.5, 1240) morning host Trey Radel has stepped down from his show to run for Congress. Radel, 35, is one of several Republicans looking to succeed Rep. Connie Mack (R-FL), who’s running for the Senate. PD John Moutz tells the Naples Daily News they won’t hold the slot for Radel, and that Drew Steele is taking over the daypart. Follow Inside Radio on Twitter HERE.

INSIDE RADIO DEAL DIGEST

Mississippi — Donald and Kathy Lockett’s Holmes Country Broadcast Company files to buy classic country “Classic 102” WAGR-FM, Lexington and gospel WXTN, Benton (1000) from Sandra Cothran. HCBC has been operating the station since December 22. Broker: Robert Williamson.

Texas — Withers Family Texas Holdings files to take control of classic hits “106.5 The Shark” KYRK, Taft from Pacific Broadcasting. James Withers will pay $10,000 plus forgiveness of $168,000 of debt racked up during the construction of the station which signed-on in 1996.

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