Kagan Research has projected that HD Radio will earn broadcasters 800 million dollars, or 4% of total revenue, by 2008.
Here are some of my observations:
1. Kagan doesn’t mention what its assumptions are in terms of number of HD radios in use or, more importantly, number of listeners tuned in. Thus their estimates are extremely difficult to critique or accept.
2. 2008 is two years away. Reality check.
3. Forrester Research has projected there to be 10 million units in use by 2010, four years from now. If we assume a typical growth curve, that means there would be probably about 4 million in use by 2008.
4. If four million radios and (lets be generous) 8 million listeners can produce billing of 800 million dollars that’s significantly more money than the 600 million dollars XM bills with 6 million subscribers and, let’s guess, 12 million listeners.
These numbers don’t add up.