For some background, see my Jan 11 post: http://forum.xda-developers.com/show...postcount=5154
"Inventory" is an ad industry term for ad time. Note that Sprint is a US carrier and is unrelated to Spirit.
Sprint is being paid in radio advertising time, which they can use or re-sell. Short article and a few comments, including mine here:
See after the quote for a longer article I quoted. Highlights include Sprint activating FM in 30 million phones over 3 years and a clear indication that negotiation is occurring with other US carriers.
I think the "rumor" of US carriers being paid to not disable FM is true. Huge news for FM on Android IMO.
I've seen countless posts on other threads doubting whether the OEMs/carriers would purposely disable FM, and why they'd do that, but I think the proof is coming out now.
At CES Sprint has announced coming FM support on Android and WP8 phones, and a NextRadio app: http://newsroom.sprint.com/article_d...rticle_id=2488
Here's a press release from Emmis about their NextRadio app: http://www.emmis.com/press/story.aspx?ID=1812333
Reading between the lines a bit, my take is that the NextRadio app will have interactive features that will provide some "monetization". For example, "Click here to buy current song or current advertised product".
And maybe the NAB or other industry groups will allow the carriers to access that income, so as to avoid directly paying the carriers. Otherwise, it might be more obvious the carriers are holding the broadcasters to ransom.
My guess is that the groups are negotiating with other carriers too. It would be very interesting if devices with no official FM support became enabled with carrier software updates this year.
I'm also going to guess the APIs are not going to be public. Emmis et al doesn't want competition.
...more at original post: http://forum.xda-developers.com/show...postcount=5154
One of the longer articles I found on the subject: http://www.insideradio.com/Article.a...0#.URGuj5GUx0w
Radio’s Sprint bill begins to take shape.
About $10,000 worth of inventory per station. That’s the estimate of what it will take for the radio industry to raise the $15 million that’s being pledged to Sprint in each of the next three years. In exchange for the money, the carrier guarantees to install and activate FM receivers in at least 30 million cell phones. Sprint may get radio inventory in the arrangement, but the spots won’t be used to market its products.
Many of the specifics are still being worked out in the deal announced last month between the industry and Sprint, which has agreed to give its users FM access. “Based on the response that we’ve gotten so far, I don’t think that will be a problem,” says Emmis CEO Jeff Smulyan, who is spearheading the industry’s effort. Smulyan is hoping to collect signed commitments from radio groups over the next few weeks.
A preliminary model will see the $15 million commitment divvied up in groups by market size. For instance, $5 million worth of inventory could come from big, medium and small markets. While one broadcaster in smaller cities worries that formula could disproportionately burden stations outside the major markets, Smulyan says they’re still working through the details and vows the process will be transparent. How the numbers break out will be a lot clearer once all the commitments are in hand. “We’re going to try to make it as fair as is humanly possible,” he pledges. Exact inventory requests are likely to be based on a company’s share of revenue in the overall industry.
The millions of dollars of airtime that broadcasters commit to Sprint to get FM chips in phones won’t necessarily promote the carrier or its new radio-equipped products. Instead, the ad time will be sold by a rep firm, with the cash then going to Sprint minus any commission to the ad seller. Smulyan says they’ve had discussions with a few companies interested in selling the Sprint inventory, and are open to talking with others. “We’re in the early stages,” he says. “First we want to get commitments and then we’ll figure out what to do with them.”
There’s no guarantee the ads won’t be sold to existing national advertisers, which could mean a hit on station’s national revenue. Smulyan agrees it would be best to bring new clients onboard, but he believes any lost revenue could be made up with new dollars placed by advertisers on the FM-enabled geo-targeted ads on their handsets. “If we’re even partly right about the new backend revenue, it will be many multiples of the commitment — and that’s all brand new dollars to the industry,” Smulyan says. “And we’re an industry that needs a shot in the arm.”
Under the terms of the arrangement, if Sprint doesn’t deliver the promised 30 million FM-equipped handsets, broadcasters can cut back on how much cash is paid. Smulyan doubts that will happen however, saying they’ve been “wonderful partners” so far.
The system that’s being built among broadcasters and Sprint promises to put any station on handsets regardless of whether the company plays along or not. Emmis has agreed to even supply the cell phone company with a station logo so it looks just like all the other station’s basic tile. Smulyan says the only way Emmis will make any money on the project will be through the licensing of Next Radio’s advanced features to stations. They include the ability to offer better visuals on the smartphone and to sell geo-targeted ads. Sprint will get a 30% cut from those ads, with the rest will be split between the station and Emmis. “If there’s a chance that Emmis does profit by this, it’s only if the enhanced advertising that we’re building on the backend is successful,” Smulyan explains. Broadcasters could avoid that cost by developing their own app, he adds.
Emmis will also get a management fee that Smulyan says will help his company recoup some of the costs it racked up through the years as he was jetting off to lobby Congress, the FCC, FEMA and the individual cell phone companies — as well as the money spent developing Next Radio. He declined to say how much was spent, other than to say the company is “way in the hole.”
Paying for distribution is a new concept to most broadcasters. “I don’t see the industry paying to get FM in cars,” says one group head still weighing whether to pony up what’s being asked of his company. He and others worry that by agreeing to give Sprint an eight-figure payout that it will cost even more to gain access into AT&T and Verizon, both of which have much larger market shares.
Smulyan says it’s impossible to say what cost — if any — there will be with the other carriers. “If this is something that consumers love, other carries will be very anxious to adopt this — but we as an industry needed a starting place,” he says. Yet in an era where companies including Sirius XM Radio, Pandora and Spotify are paying admission to device makers, broadcast radio may have no choice but to open its wallet.
A few sentences of note to me:
- "The system that’s being built among broadcasters and Sprint promises to put any station on handsets regardless of whether the company plays along or not."
- "Broadcasters could avoid that cost by developing their own app, he adds."
So,... the chips will be in the phones, and some broadcasters could avoid this ransom by developing their own app... OR IMO licensing from a 3rd party an app such as Spirit I guess. Hmmm... Anybody know UI design ? LOL.
This 3rd party app "loophole" makes it even more likely IMO that my guess about their using an undocumented proprietary API will be true. But even with a public API, such as the proposed Android FM API, Sprint could lock out other FM apps by requiring that such apps be signed by them. At least one OEM already does that.
And even with custom ROMs, I have the impression that one of these days (if not already w/ Qualcomm's WCN3660), FM access will be cryptographically locked in the same way that bootloaders are. This to serve carriers and OEMs avoiding patent fees.
And perhaps "pirate radio" will one day apply to reception (not unlike the UKs antenna fees) and pirates will be those who dare to find a free and interactive ad-free way to listen to over-the air signals. Cue the dystopian tales of a future with bans on music, as seen in Mali or the works of Zappa and Geddy Lee, LOL.