Polk Audio is offering radio stations a “special broadcaster incentive price” on its I-Sonic entertainment system, the company said at the Home Entertainment Show in N.Y.C. The package, which features an HD Radio tuner and XM reception, will list for $599, but broadcasters buying by May 5 pay $299, Polk said. The deal, intended to encourage broadcasters to promote HD Radio in giveaways, puts terrestrial stations in the odd position of promoting XM, which many oppose.
Paul Gluckman
Paul Gluckman, Executive Senior Editor, is a 30-year Warren Communications News veteran having joined the company in May 1989 to launch its Audio Week publication. In his long career, Paul has chronicled the rise and fall of physical entertainment media like the CD, DVD and Blu-ray and the advent of ATSC 3.0 broadcast technology from its rudimentary standardization roots to its anticipated 2020 commercial launch.
As a result of first-quarter momentum, Sirius upgraded its projection for subscriber growth this year to 2.7 million, from 2.5 million, by the end of 2005. That’s still less than 1/2 the 5.5 million that XM has projected. But Sirius CEO Mel Karmazin declared in a conference call his company had “a blowout quarter in which we over- delivered on all our key metrics.” Sirius added 305,000 subscribers in the quarter, a 230% increase from the 91,000 a year earlier. Karmazin said Sirius captured 36% of the new subscribers added in the quarter by it and XM combined. Noting that’s compared with the 20% share Sirius boasted a year earlier, Karmazin said Sirius will reach “approximate parity” at retail with XM by the end of the year. The company is on target to become “cash flow positive” by 2007, he said. First quarter, the company’s net loss widened 34% to $193.61 million on a 365% increase in revenue to $43.22 million. Sirius recorded its lowest monthly churn ever at 1.3%.
Spurred by successful launch of its Major League Baseball coverage, XM expects 2nd quarter subscriber additions to equal or surpass the 541,140 added in the first quarter, the company told analysts Wed. in its quarterly conference call. XM narrowed its net loss in the quarter to $119.32 million (-58 cents per share) from $144.51 million (-96 cents) on a 139% revenue increase to $102.57 million. The company ended the quarter with 3,770,264 subscribers, a 124% increase from a year earlier. XM said again it’s on pace to reach its goal of 5.5 million subscribers this year. CEO Hugh Panero pledged XM will achieve its target “in a very cost- effective way.” Panero said XM’s customer base “has reacted well” to its March announcement of a rise in the basic monthly subscription fee to $12.95 from $9.99. He said the key to implementing the rate change was giving customers a “unique” opportunity to lock in the lower rate by signing on for annual or multiyear subscriptions. “I worked in the cable industry for a very long time and know a lot about the DBS business, and I cannot believe that this kind of offer has never been done in either of those industries,” said Panero, a former HBO executive. XM’s quarterly churn was 1.4% -- “only slightly higher” than the 1.3% in the 4th quarter, Panero said.
Broadcasters Mon. used harsh language to repudiate a CEA petition at the FCC to revise the DTV tuner mandate compliance schedule on 25-26” TV sets. NAB branded the CEA petition a “delay plan” whose only purpose was to sell more analog TVs at the expense of digital.
CEA has downgraded its 2005 projections on DTV product shipments to 15 million units from 20 million because the earlier forecast overstated “the full-year effect” of the FCC’s DTV tuner mandate and its potential to invigorate DTV sales, the assn. said Fri.
“Productive negotiations” continue as partisans debate the FCC’s inquiry (99-325) into whether content protections are needed to thwart widespread piracy of music transmitted over emerging IBOC digital radio services, senior RIAA executives have told new FCC Chmn. Martin, an ex parte filing disclosed. RIAA representatives, including CEO Mitch Bainwol, Pres. Cary Sherman and Gen. Counsel Steven Marks, joined executives from major labels Sony BMG, EMI, Universal Music and Warner Music to tell Martin the talks, which have involved “certain” broadcast groups and CE makers, are aimed at resolving the dispute over IBOC content protections, the filing said. One focus of the talks has been developing “methods by which digital broadcasters might offer supplemental services that would also permit the protection of copyrighted broadcast content,” the filing said. RIAA and the labels told Martin they're “hopeful that these discussions would lead to a consensus among the various industries that could provide a path to resolve some or all of the issues raised” in the Commission’s pending inquiry, the filing said.
Seven in 10 consumers polled by CEA plan to buy a CableCARD-ready HDTV set as their next TV, CEA said Mon. at the NCTA show in San Francisco, where it sought to promote cable industry CableCARD support. “It’s the beginning of the end for the DTV transition, and with 70% of U.S. households relying on cable for their primary TV signal, support from the cable industry for these plug-&- play sets is paramount,” said CEA Pres. Gary Shapiro. He said cable must join CE in promoting the sets and “the necessary CableCARD. Beyond that, the CableCARD must be made readily available to consumers by cable operators at an affordable cost.” CEA said 3 million CableCARD-ready HDTV sets will be shipped this year, building on the installed base of one million shipped through year-end 2004. By cable’s latest estimates, only 31,000 CableCARDs had been installed in consumers’ homes (CED March 21 p2). But the numbers should keep rising as more CableCARD-ready sets reach the market. Under stringent new reporting rules incorporated into the FCC’s extension of the integration ban by a year, the 6 largest cable operators must file status reports on CableCARD “deployment and support” as of Aug. 1, and every 90 days thereafter.
An aftermarket one-box radio that’s truly interoperable for Sirius and XM reception is possible within a couple of years, but interoperability as a feature is likely to have niche rather than widespread appeal, XM Chmn. Gary Parsons told a Banc of America investors conference Wed. in N.Y.C.
The FCC will maintain its ban on cable deployment of integrated set-top boxes, it announced late Thurs., but it deferred the effective date one year to July 2007. The Commission said the delay was designed to give cable operators time to develop a downloadable security solution. The Commission also ordered the cable industry to report by Dec. 1, 2005 on progress being made toward the solution, and for NCTA and CEA to make regular reports on negotiations on a “plug and play” agreement.
CE industry lobbyists have begun emphasizing a fallback position in their dealings at the FCC, if the Commission sides with cable and decides to extend the July 2006 integration ban on digital cable set-tops.