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Digital Radio
Technology |
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No longer limited to AM/FM radio, tape deck, and CD player, the car is poised to become one of the next convergence frontiers. Future models, according to the automobile industry, will be equipped not only with video entertainment centers and GPS units, but also wireless systems for information and data access. The timeline on when you'll actually be able to surf the Web from your car remains unclear (not to mention clouded by safety concerns). But another digital technology-digital radio-is already well on its way to your dashboard. Within the next two years, if everything goes as promised, digital radio will bring CD-quality sound and crystal-clear reception to your car, as well as to home receivers and portable devices. The pumped-up radio signals will emanate from your favorite terrestrial radio station's transmitter or from one of two multichannel satellite digital radio services. Moreover, like digital television, digital radio has the potential to provide a cost-effective pipe for interactive datacasting services. An audience exists for both forms of digital radio, contends Michelle Abraham, senior analyst with Cahners In-Stat Group. For terrestrial services, Abraham predicts that digital radio shipments will reach 16 million units by 2004, with portable and car radios leading the way. Meanwhile, satellite digital radio will penetrate 5 percent of US households by the end of 2004 and 10 percent by the end of 2005, Abraham says. That's 5 million and 10 million households, respectively. The automobile is the prime target market for these new and enhanced digital audio services, thanks to radio's traditional dominance in the mobile environment. The Radio Advertising Bureau reports that in-car listening accounts for 42 percent of the time the average person listens to the radio each day (3 hours and 18 minutes). Well grounded or groundless? "We're just a third band of the radio dial. We are not precluding, but are complementary to, radio." Robert Acker, XM satellite Radio Digital audio broadcasting (DAB) has actually been on the radar screen for the past 10 years. Eureka 147, a European DAB system using the higher-frequency L-band, was the first to emerge. But US radio-station owners balked at the possibility of an out-of-band (that is, not AM or FM) system, claiming that it would allow new entrants into an already tight advertising market. (The system has since been adopted in Europe and Canada.) Robert Acker For the last couple of years, two players, USA Digital Radio (USADR) and Lucent Digital Radio (LDR) have been slogging through an arduous regulatory, testing, and standardization process. The companies both favor in-band on-channel (IBOC) DAB systems, which use regular AM/FM radio frequencies to broadcast digital signals. The National Radio Systems Committee (NRSC, a group made up members of the radio broadcasting and consumer electronics industries) has been testing technology from both companies to determine which system best meets its needs. When this process toward an FCC-approved standard seemed somewhat stalled, the two companies, in July, announced plans to merge. ''IBOC has been the preferred system for US broadcasters because it allows use of their present FM band and frequency to transmit a digital signal,'' says John Voci, operations director at Boston-based public broadcasting station WGBH Radio. Initially a hybrid analog-digital system, IBOC will simulcast both analog and digital signals on the same frequency. AM/FM receivers will be able to receive the existing analog signals until stations elect to turn off the analog signal in the future. Then, IBOC DAB-compatible receivers will operate with the remaining all-digital signal. With the aim of accelerating the standardization process and thus bringing digital radio to market quicker, the combined entity, called iBiquity Digital, plans to iron out a unified system based on the best elements of each company's technology. This system will be presented to the FCC as the DAB standard. LDR and USADR expected to finalize the merger within 60 days of the announcement, followed closely by discussion on combining the two systems. The logic for the merger couldn't be simpler, according to Suran Pai, president and CEO of Lucent Digital Radio and co-chairman of iBiquity Digital's board of directors along with USADR president and CEO Bob Struble, who will serve as president and CEO of the combined company. ''The bottom line is that we were two opponents trying to achieve the same objectives with two different approaches,'' Pai says. ''Clearly, [terrestrial] digital radio was not going to move forward without a unified approach or a standard.'' Previously, the companies had resisted a ''grand alliance,'' similar to that engaged in by the developers of the digital television standard. Digital radio has also been stymied by the classic chicken-and-egg dilemma; most receiver makers have been hesitant to build radios before the standard is set. Both LDR and USADR have agreed to use LDR's perceptual audio coder (PAC) in the unified standard. Designed by Bell Labs, PAC is an audio compression algorithm that delivers near-CD quality audio at 96 kbits/sec over existing frequencies without denigrating the transmission of current analog programming. Figuring they can develop a standard by the end of the year, LDR and USADR executives project that compatible equipment will be available in 2001. ''We believe we've cut back the timeline about a year or so,'' Pai says. ''We'll see movement from a number of players on the receiver side to accelerate product design and development. This is clearly a great opportunity for receiver and semiconductor makers interested in the radio space.'' Receiver makers already on board with LDR include Harmon Kardon and Recoton, while Sanyo has an agreement with USADR. Sound idea? For many people, the prospect of digital radio may elicit a response of ''so what?'' But in fact, research has found that millions of Americans are dissatisfied with conventional radio. That's not surprising, considering that nearly half of all conventional radio stations broadcast in one of only three formats-country music, contemporary music, and news. Even when they find a station they like, listeners often have to endure up to 18 minutes of commercials each hour. Moreover, most radio signals begin to fade just 30 miles away from their source. Based on this kind of research, XM Satellite Radio and Sirius Satellite Radio have both developed aggressive business models and invested at least $1 billion each to create an out-of-this-world alternative-satellite broadcasting. Like terrestrial DAB, satellite radio has also been in the works for the past 10 years. It's already available elsewhere, such as in South Africa, where US-based Worldspace offers 25 channels of programming. But in the US, the starting gun only fired in 1997, when the FCC licensed S-band (satellite band) spectrum to XM and Sirius. They've been running neck and neck ever since. Both highly funded ventures will provide 50 channels of commercial-free music and up to 50 channels of advertising-sponsored news, sports, and entertainment. Featuring both original programming and content licensed from other providers, the companies promise all-day, every-day, coast-to-coast service at a subscription price of $9.95/month. Scheduled to debut in late 2000 or early 2001, both services have set their sights on the automobile. ''In the beginning, we expect this to be something that people primarily buy for their cars,'' says Robert Acker, XM Satellite Radio's vice president of marketing. ''The car is a place where consumers sample radio and discover new stations. You don't sit at home working the seek button on your home radio to find a new radio station. You learn the stations you like and love in the car and take that knowledge into the home.'' XM's research estimates that 34 million listeners are willing to pay $400 for a receiver, plus a $10 monthly subscription fee. XM-a public company whose strategic investors include DirecTV, General Motors, and Clear Channel-has engaged Hughes Space & Communications to build two geostationary satellites equipped with 15-kilowatt S-band transmission systems provided by Alcatel Espace. Recently, the company opened a 120,000-square-foot broadcast center in Washington DC's high-tech corridor. The company expects to launch its satellites by the end of this year or early next year. ''The 15-kilowatt strength allows us to reach mobile cars through foliage to a moving and really small antenna,'' Acker says. ''In dense urban areas, we're building terrestrial-based repeaters that will deal with the issue of buildings being in the way.'' The Fraunhofer Institute, the inventor of the MP3 format, designed XM's digital waveform and chipset specifications. ST Microelectronics is manufacturing the chipset. Lucent Digital Radio is providing its PAC codec. "It's a completely new service for people to be introduced to, so there's a huge education factor." Michelle Abraham, Cahners In-Stat On the consumer end, Delphi Delco Electronics Systems, Alpine Electronics, Pioneer Electronics, Motorola, Sharp Electronics, Sony, Clarion, Autovox, and Mitsubishi will provide AM/FM/XM radios. General Motors will offer XM's three-band satellite radio as an alternative to traditional radio options in 2001. Meanwhile, Avis Rent-A-Car has agreed to offer the XM service to its customers. XM will also be available to truckers, boaters, and airplane passengers through deals with Freightliner and Pana-Pacific, Marine Audio, and LiveTV, respectively. Sirius competition Sirius also has many parts of its system in place, according to Terrence Sweeney, director of marketing. In fact, the company is one step ahead of its rival, having already launched the first of its three satellites in late June. The second and third will go up in September and October. ''By November, all three satellites will be in their proper orbit, tested, and ready to go,'' he says. Sweeney is optimistic that the venture, which has built a 150,000-square-foot production and broadcast facility in midtown Manhattan, will be a success based on pent-up consumer demand alone. ''We have been able to raise $1.45 billion and sign agreements with auto manufacturers and all the top receiver makers, not through trick presentations about how much money they're going to make, but because everyone truly believes that this is a viable consumer proposition. Consumers are looking for an alternative, and satellite radio is the first real one they've had since FM.'' Sirius has maximized line of sight by placing satellites in inclined elliptical orbits. Unlike geostationary orbits over the equator, the elliptical path ensures that each satellite spends about 16 hours a day north of the equator, and that two satellites are right over the US at all times, according to the company. The satellites relay the signals from the uplink facility directly back to earth. Sirius is also using terrestrial repeaters in dense urban areas. Lucent Microelectronics has provided chip sets and audio codecs for the receivers. Starting in 2001, Ford, BMW, and DaimlerChrysler will install Sirius-ready radios in new cars as standard equipment. In addition, three-band receivers will be available from Alpine, Audiovox, Clarion, Delphi-Delco, Jensen, Kenwood, Panasonic, and Sanyo. Retailers such as Circuit City, Tweeter, and Best Buy have signed on to sell the Sirius service. Both XM and Sirius have signed deals with American Honda Motor to deliver services to US Honda and Acura drivers. As a result, the two competitors have engaged in a unified standard agreement. The agreement lets Honda, along with any other new automaker partners, deploy receivers that can receive both services. Also, XM and Sirius are jointly funding development of the standard system and creating a service mark for satellite radio. The standard agreement does not affect any automaker agreement in place beforehand, but will be deployed by 2004 in next-generation products. Indicating enthusiasm for the medium, Honda recently joined General Motors as an investor in XM Radio. ''The products and services that satellite radio can offer will be very important to drivers in their cars,'' says Honda spokesperson Jay Joseph. ''It increases options for consumers who travel a lot and want consistency in programming. The agreement between XM and Sirius to operate on common equipment is not unlike the way current car radio systems work; it gives consumers a choice.'' Honda has yet to decide on how it will deploy the receivers. ''It will depend on the car model,'' Joseph says. ''For example, in a high-end model, it would make more sense for us to just provide the radio as standard equipment, but it may not. So we're still in the process of surveying the market and making sure that we develop the system that best suits the needs and expectations of our customers.'' Bring in the data XM also has a deal with Honda and General Motors' OnStar to jointly develop future telematics and data applications. However, datacasting is not the prime market for XM, according to the company. ''Our marketing team's initial research is that there is a huge market out there for new radio, so that is our focus to begin with,'' says spokeswoman Vicki Stearn. ''That said, we do have this wide pipeline, and are in discussions with Honda and OnStar. That is about as far as we're going at this point.'' Sirius agrees that a future market exists for data services. ''Our signal is fundamentally digital, so we can send all sorts of data applications,'' Sweeney says. ''We have an agreement with telematics company ATX Technologies. While we are fundamentally a broadcaster, with the cellular back channel of someone like ATX, there are an amazing number of things we can do in terms of e-commerce.'' Meanwhile, LDR and USADR say that using PAC will enable broadcasters to send a digital signal that contains not only CD-quality audio but also data. Moreover, PAC's variable bit rates allow the encoder to adapt, in real time, to changing network capacities, thereby freeing up bandwidth for other applications. ''We envision a system that will be broadcaster-flexible-based on whatever format [a station] is broadcasting,'' says USADR's Struble. For example, a news or talk station could opt for 64 or 32 kbits/sec, rather than the CD-quality 96 kbits/sec, opening up more room for data. ''When we move to an all-digital spectrum and remove the analog, there's a whole new set of capabilities,'' Struble adds. In addition, iBiquity Digital's audio and data technology ultimately could find application in a variety of wireless devices, including cell phones and PDAs. Reception question Despite enthusiasm from its proponents, digital radio-both satellite and terrestrial-faces some major obstacles before it debuts. Notwithstanding the standards process, iBiquity Digital must convince radio broadcasters to spend money on digital transmission equipment, persuade radio makers to make new receivers, and entice consumers to buy new radios. If the transition to digital television is anything to go by, the road will be bumpy. However, Cahners In-Stat's Abraham contends that terrestrial radio will be of interest to consumers, who are increasingly accustomed to high-quality media experiences such as CDs, DVDs, and surround sound. However, she injects notes of caution. ''[Success] is predicated on the prices for digital radios being only 10 to 15 percent higher than analog radios and that the most popular stations in the top 30 markets transmit in digital,'' she says. ''Better audio quality will benefit radio stations, but there are still legislative issues to work out-whether it will be a set rollout of services by the radio stations. Even so, some stations will do it anyway for market share. Also, there aren't many receiver manufacturers on the bandwagon yet; they're waiting to see what happens.'' The satellite players face a potentially more dramatic challenge-getting their satellites into orbit. Satellite-industry analysts give any satellite launch a 10 percent chance of failure. So far only one satellite has been launched, with two for each service still waiting in the wings. What, me pay? Another possible stumbling block is whether consumers are willing to pay for something they're used to getting for free. ''That is one of the key issues,'' Abraham says. ''It's a completely new service for people to be introduced to, so there's a huge education factor. If you think about the history of satellite video services, you already had cable companies. So there was something to compete with, and, on the whole, people were used to paying for it.'' "Consumers are looking for an alternative, and satellite radio is the first real one they've had since FM." Terrence Sweeney, Sirius Satellite Radio When asked if terrestrial and satellite digital radio compete with each other, both sides agree that they can co-exist in a dashboard of the future. ''On existing radios, we're just a third band of the radio dial,'' says XM's Acker. ''We are not precluding, but are complementary to, radio. You'll use local radio for your local content. And you'll use us for the unique content that we bring. You'll just press a button, and you'll go from the FM to XM. Terrence Sweeney LDR's director of marketing, Bill Casey, concurs. ''Terrestrial broadcasting lives on local information, whereas satellite radio will have a national footprint, and so they complement each other,'' he says. ''We anticipate that there will be an IBOC/satellite receiver.'' Furthermore, if all the players in the digital-radio sphere utilize Lucent's PAC codec, there are obvious design and deployment advantages. ''We know that space on the dashboard in a car is at a premium, and so combining the building blocks within the system can save space,'' Casey says. The bottom line: Satellite and terrestrial radio are actually operating in different spheres. Satellite may rain on terrestrial's parade, but if market studies indicate anything, it's that consumers will continue to turn to conventional radio for local news and information. And if terrestrial service gets off the ground, its ubiquitous nature will be an advantage in bringing data services to the car. ''Digital radio will be the base radio technology, with satellite as an option-and it may be a very successful option,'' says Patrick Walsh, USADR's vice president in charge of wireless data business development. ''If satellite digital radio gets 25-percent penetration, it will be an overwhelming success. But we view success as being the technical replacement for the 95 percent who listen to free AM and FM radio. If, as a starting point, we're in every vehicle, it won't be as expensive to downlink information to cars using our existing broadcast network.'' In-dash Internet Once digital radio makes inroads into the cars and hearts of consumers, it will set the stage for further digitization of the driving experience. Two development efforts provide glimpses of the future. A Motorola prototype called iRadio provides in-vehicle
information and entertainment via wireless Web access,
enabling drivers http://www.hannaian.com/distribr.htm |