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Everything you Need to Know about FM Radio Chips in Mobile Phones and NextRadio

Will FM be built into every mobile phone near you? Only time will tell.  But let’s consider some common questions and answers related to this possibility, all from my perspective.

As the old saying goes, be careful what you wish for.

Question:  With FM on mobile phones I will no longer need to stream my content, right? Think of the money I’ll save!

Answer:  Wrong.  The purpose of streaming existing and new content via the Internet is not just to be present on mobile devices but to provide the heart of a broader brand experience attractive to consumers and advertisers alike. Dumping out of the online radio game now would be like dumping out of FM radio in the early 70’s because all the money was being made on AM.  The kind of precise targeting made possible by online radio will eventually produce CPM’s which surpass rates for terrestrial radio.  Online radio provides audience data sets and the ability to connect the right ad to the right audience at the right time in the right place for the right price.  It also provides the equivalent of more broadcast towers for infinitely less than the cost of a tower in the real world.  Forsaking online radio streams also means abandoning listening on more traditional desktop devices, where much of radio’s online audience currently tunes in.

Question:  AT&T’s bandwidth limits will put the chill on Pandora usage as consumers start racking up insane fees for their music listening, right?  Isn’t streaming as an alternative to radio simply not viable?

Answer:  Flat out wrong.  From the LA Times:

Pop & Hiss conducted a test run of an hour of continuous music streaming on the default sound-quality setting with Pandora on the iPhone. (Flipping on high-quality streaming doesn’t make a huge difference in bandwidth consumption.) It weighed in at just under 16 megabytes. In other words, you’d need to stream about 4 hours on Pandora every day to hit the 2-gig monthly limit. Mileage varies depending on your choice of streaming service.

This, of course, is well above average for radio listening even on regular radios.  Pandora has previously stated that far less than 1% of their listeners would be constrained by bandwidth concerns. And don’t forget that these caps only count when you’re away from a WiFi connection.  On WiFi, it’s “all you can eat.”

Streaming is simply different from radio and compatible to it.  Some measure of radio listening will head in that direction whether you like it or not.  So climb on board the merry-go-round or your seat on the ride will eventually be filled.

Question:  If FM is on mobile phones, that’s great because I don’t need a mobile app, right?

Answer:  Wrong.  The purpose of a mobile app is not only to act as a stage for your online radio stream(s) but also to create a monetizable and engaging experience that surrounds your brands.  The mobile space is increasingly an app-oriented space.  If we cease to play that game we will become irrelevant in it.  The future of radio is not simply the future of our over-the-air content, it’s the future of our brands in all their shapes, sizes, and manifestations, online and off.  In any marketing equation it’s critical to meet the consumers where they are, not where we wish them to be.

Question:  This deal would be premature.  Shouldn’t we fight the idea of a performance royalty tax?

Answer: The wind is not at your back, friend.  I have long argued that radio would be pushed into some sort of performance royalty – I think it’s inevitable. And that’s despite the very real promotional value that radio provides the labels which has almost entirely been discounted.  In my view, we should be charging labels for this airplay and doing so openly and legally.  Tit for tat.

Question:  Don’t surveys indicate consumers want FM on their mobile phones?

Answer: Some surveys do indicate this.  And I don’t generally believe them. That’s because consumers usually want more of many things, yet don’t necessarily buy them when they materialize. For example, right now there are many mobile phones already including FM radio and they are not strong sellers. Note that this doesn’t mean consumers wouldn’t use FM radio if it just happened to be built into their phones.  That’s another question entirely, and one whose answer evades these surveys.  I think some consumers would use this feature and some would not, but it will never be a mobile phone selling point.

Question:  Wouldn’t more audience via mobile phones means higher ratings for our brands?

Answer: Let’s assume that your premise is accurate and more audience would result.  In a diary world, it might impact ratings at the margin, yes.  But not in a world where the radio can’t be picked up by a PPM device unless the meter-keeper attaches a clunky interface between the slick new phone and its trusty earbuds.  Good luck on that one!

The larger question is why we’re using targetable, identifiable, customizable mobile devices to play a reach-based, anonymous, estimate-dependent Arbitron game designed for a world where media comes in only three shapes: Print, TV, and radio.

Question:  Wouldn’t FM on mobile phones give broadcasters the ability to power one-click commerce through “buy” buttons and downloadable discount coupons via RDS or other mechanisms (and eventually more powerful options via HD)?

Answer:  Yes.  And it would do so on an industry-standard basis, assuming radio embraces industry standards.  Of course, you’ll be sharing some of that bounty with our new friends the mobile phone makers, but c’est la vie.

Anything that promotes interactivity between consumers, radio, and our advertisers and also expands the boundaries of what “radio” represents are generally good things.

Question:  Can I get commerce capability and interactive monetization opportunites such as coupons through existing tools and mobile apps – do I have this power today?

Answer:  Yes.  This capability exists today without waiting for any new add-ons to the mobile phone. Quu is one such tool that solves this problem.  Text messaging platforms do likewise.

I ran this question up the flagpole with Fred Jacobs and Tim Davis of Jacapps, and here’s what they wrote back:

None of our current apps is pulling from an actual RDS feed.  To my knowledge, there’s not an API or access point for iPhone (or Android) to access the FM receiver to gather the RDS data in its native over-the-air format. That limitation aside, the possibility of accessing this data in other ways is quite high.  A given station could take the intended RDS data and dual-encode it – first for the RDS transmission, and secondarily to an XML/RSS or even .txt that would be available via the internet and could be included in any number of ways in the app – either as links, as text or as instructions to pull images/coupons from other locations. Ultimately, the use of RDS-type feeds via metadata embedded in the stream or as stand-alone XML files has a great deal of potential, and to some extent is already being used in our apps.

Question:  Isn’t the idea of FM on mobile phones a big middle finger to AM broadcasters?

Answer:  FM on mobile phones is really all about paving the way for HD radio on mobile phones. So your day will come, AM broadcaster – via HD.  The logic is as follows:  Once manufacturers install FM chips and see how desirable the feature becomes, HD will be an obvious upgrade.  This is sensible logic, although it’s the same logic that predicted HD would be all the rage by now once consumers heard how great the sound was and what terrific new options were “hidden” on new HD radios.  By the way, it’s worth mentioning that any and every AM station already has access to mobile environments via specialized apps.

Question:  Isn’t a government mandate for FM in mobile phones anti-consumer?  If consumers want it, let them ask for it!

Answer: The nature of radio is utilitarian.  Nobody ever asks for it.  Yet they always assume it will be there – somewhere.  Consumers will never ask for this.  Nor do I think they will seek out phones that offer it, any more than they seek out phones that already offer it or mp3 players that do so. Government mandates are perfectly reasonable ways to sustain corporate interests, whether we’re talking about the merger of competing satellite radio companies or the requirement that all TV’s go digital.  These rules may or may not be “fair” or “right,” but don’t pretend they’re unusual.

Question:  Isn’t radio pursuing this to “prop up” a “horse and buggy” medium?

Answer:  It is incumbent upon broadcasters to pursue any and every way to extend their power and influence and profitability and relevance, whether you like it or not.  Radio has certainly not positioned itself well in the pantheon of new media, but I’m eternally hopeful that will change with the rolling of the occasional head.  Meanwhile, part of radio’s pursuit of relevance and profitability must include an eye to the future where the future is farther than three months away.  So would FM on mobile phones be the end of radio’s mobile strategy or only the beginning?  It should be the beginning. I fear it would be the end.

Question:  Doesn’t Forrester have a point?  “Forcing devices to carry FM receivers,” said Forrester’s James McQuivey, “doesn’t change the fact that, given a choice, people will choose to listen to Pandora on their mobile  phone more readily than the local, misogynistic morning talk show.”

Answer:  Aren’t you glad Forrester isn’t producing your local radio morning show?  Do I need to answer a statement which is obviously pulled from a Forresterian posterior, and a poorly tended one at that?  For the record, I do think people will be more likely to listen to Pandora on their mobile phones than to the local radio station, but not if it’s misogynistic morning talk they want.

Question: Won’t FM on mobile phones add audience to radio?  It’s more distribution!

Answer:  Yes, more distribution is always good.  But does radio have a “distribution problem” when more than 90% of listeners tune us in?  True – more distribution means more occasions of listening, not simply more listeners. But remember that it has been a full generation since radio has been portable. Portability for radio is a relatively new experience for younger listeners today and an unfamiliar one for older listeners (watch this video for a glimpse into a time where portability was as close as some really clunky antennae).

Portability of FM will come in the wake of zillions of alternative things to do with their mobile devices and a great mashup of media that transforms things like “radio” into cross-media value propositions, all mediated by the Internet.  This doesn’t mean FM on mobile is a bad idea, it just means it won’t be as good as you might think.

Question:  Isn’t radio commonplace on mobile phones across the world – and consumers use it there, right?  Aren’t we in America the oddballs?

Answer:  From what I can tell, yes.  Radio is likely to be found on many mobile devices the world over, although I haven’t seen statistics on how consumers use it.  My guess is that they do.  Then again, radio in many parts of the world is dramatically different from the way it is in the US.  It is often less competitive with fewer options than we have here.  In some cases, foreign stations are more compelling to listen to across multiple platforms and service more needs for their audiences than ours do in the US.  In some markets radio is even a comparatively new medium, evolving side by side with mobile phones.  So while the analogy is interesting, it may not be predictive.  After all, digital (a.k.a. HD) radio is big in some countries, too.

Question:  What about radio’s role in providing emergency information in a crisis? Doesn’t that justify radio’s presence on mobile phones?

Answer:  Indeed, radio is the device that one hand-cranks in an emergency when all the TV’s and WiFi go out.  Of course, we have radios in our homes, at work, and in our cars, so it’s not quite clear to me why this particular feature is an essential ingredient to a mobile phone, no matter how it’s powered or by whom.  I do bristle at the notion that radio’s significant value proposition is reduced to its role in a crisis as a key argument point to enter the mobile phone space, but as an additional reason to do so, I have no complaints.

So there you have it.

Your additional questions and answers are welcome.

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