XM Satellite Radio is “well on its way” to exceeding its projected 1.2 million subscribers by the end of the year and will surpass the average Wall St. forecast of 2.5 million by the end of 2004, company executives told financial analysts in a conference call Thurs. on 3rd-quarter results. XM said it reduced its 3rd-quarter EBITDA loss to $64.37 million from $66.52 million in the same 2002 quarter as subscription revenue rose significantly to $21.66 million from $4.78 million. XM added 237,395 subscribers in the quarter for a total of 929,648 Sept. 30, breaking the million-subscriber barrier in late Oct. Subscription additions were up 34% from the end of the 2nd quarter, XM said. CEO Hugh Panero told analysts that “just as cable TV destroyed the myth that no one would pay for television, we have destroyed 2 myths -- that no one would pay for radio and that radio had to be local to be successful.” Panero said XM not only accounted for 85% of the total satellite radio market, “but also continues to capture the dominant share of all new growth.” He said the company expected to add 300,000 subscribers, or nearly as many as were added in all of 2002. His projection would raise XM’s year-end total to at least 1,229,648.
Philips, Sony and Thomson joined the growing chorus of consumer electronics (CE) makers urging the FCC to reject the MPAA’s call for a mandatory July 1, 2004, deadline for making CE devices broadcast flag-compliant. Zenith, like other CE makers, said its typical new product design cycle averaged about 18 months from the FCC’s final adoption of any new rules, but Zenith didn’t say it would be precluded from meeting the July 2004 deadline.
The FCC is giving serious consideration to imposing a mandatory deadline date on the marketing of DTV sets and other CE devices compliant with broadcast flag copy protection rules, but it hasn’t reached a consensus on what that date should be, sources at the Commission told us.
Two “overarching fatal flaws” of the proposed broadcast flag regulation are that it’s much too sweeping in its scope of content protection and would delegate “to private parties with enormous financial stakes in the outcome,” through govt. mandate, “the all-critical right to designate the technology and control the terms of its use,” Philips said in an ex parte filing at FCC.
A proposed broadcast flag “scheme” won’t “significantly protect” against unauthorized redistribution of DTV content, but would “suppress innovation, create massive enforcement problems” and stifle the DTV transition, consumer and public interest groups told the FCC. Consumers Union and Public Knowledge in a joint ex parte filing this week at the FCC -- submitted, they said, at the request of the Commission staff -- which sought the groups’ “critique” of MPAA-proposed broadcast flag rules in the wake of the agency’s recent adoption of a plug-&-play agreement on cable-DTV interoperability.
Although the outcome is uncertain in CEA’s suit before the U.S. Appeals Court, D.C., that seeks to invalidate the FCC mandate of DTV tuners in all NTSC receivers by July 2007, a court decision is likely before year-end, CEA Pres. Gary Shapiro told us in an interview.
IBiquity Digital said Tues. it had coined the name “HDC” (for “HD Codec") for the “revised” proprietary codec installed to fix AM audio quality artifacts that prompted the DAB subgroup of the National Radio Systems Committee to suspend its in-band, on-channel (IBOC) standardization effort in May. The subgroup’s chmn., Milford Smith of Greater Media, was quoted in the iBiquity announcement as saying “very serious consideration” would be given to resuming the standardization process as a result of “spectacular” improvements HDC would afford. It’s presumed the subgroup will announce formal resumption of standards setting following demonstrations of HDC planned for today (Wed.) at NPR studios in Washington. IBiquity CEO Robert Struble conceded his company had hoped to have receivers on store shelves by now. Referring to “the thousands” of receivers it had hoped would be sold in 2003, Struble said: “Clearly, that’s in jeopardy. But thus far, we're tracking very well for ‘04.” Struble also said iBiquity was “not that far off” from projections he made at last Jan. CES that 300 stations would be beaming HD Radio signals by year-end.
IBiquity Digital is winning rave reviews from those who have heard demonstrations of the proprietary new codec, which was installed to fix the AM audio quality artifacts that prompted the DAB subgroup of the National Radio Systems Committee (NRSC) to suspend its in-band, on-channel (IBOC) standardization effort in June. “The problem is fixed,” declared the subgroup’s chmn., Milford Smith, of Greater Media. He said he and others heard demonstrations of the new codec last week and were permitted by iBiquity to hear as many samples at whatever bit rates they wanted. The improvement in the AM IBOC signal was “spectacular,” Smith said, describing the quality was equal to or better than existing analog FM. For FM IBOC, the sound quality improvement meant the signal was “virtually indistinguishable” from that of the source CD, Smith said. He said he wasn’t sure what the developments would mean for resuming the standardization effort on AM IBOC, saying the subgroup hadn’t been asked by anyone to do that. Larger scale listening demonstrations are planned for this week at NPR studios in Washington, after which the subgroup may resume its activities, Smith said. IBiquity executives declined to discuss specifics of the new codec, saying a formal announcement was planned for early this week that would summarize the improvements. Sources familiar with the developments said the new codec was neither AAC nor PAC, but described it as a hybrid of the 2. We're told the new codec will be used for both AM and FM IBOC because there isn’t sufficient memory on chipsets to accommodate different coding systems.
XM Satellite Radio has been denied insurance payouts on $400 million in claims filed in the first quarter (CD April 3 p12) because of the continuing degradation of its 2 orbiting Boeing 702-class satellites, company executives told financial analysts in a conference call Thurs. on the release of 2nd-quarter results.
The FCC needs to adopt the cable-CE “plug-and-play” agreement in its “entirety” and not defer action on encoding rules proposed as part of that accord, the NCTA and Thomson said in separate ex parte filings at the Commission. Postponing consideration of the encoding rules contained in the DTV interoperability agreement reached last Dec. (CD Dec 20 p1) would “disserve the public interest” and derail ongoing negotiations on bidirectional DTV devices, said NCTA. NCTA said applying same encoding rules to all multichannel video program distributors (MVPDs) “would enable cable operators to provide their customers with high-value digital content that they might otherwise not be able to obtain.” Thomson emphasized “the centrality of the encoding rules to the DFAST licensing scheme from the perspective of both the consumer electronics industry and consumers’ recording expectations.” Thomson said making DFAST license available to manufacturers would be difficult without Commission adoption of encoding rules. NCTA and Thomson filings summarized phone conversations their representatives had with Stacy Robinson, mass media legal adviser to FCC Comr. Abernathy, responding to her questions whether Commission should proceed with action on plug-and-play agreement and defer consideration of encoding rules until later. Robinson told us her queries only were part of “information gathering” effort. Robinson said her questions to NCTA, Thomson and other cable and CE interests were spurred by Electronic Frontier Foundation (EFF) proposal to consider “all the technical stuff” first on plug-and-play, and deal with encoding rules later. According to an EFF ex parte filing at FCC in late June, the group’s representatives met with Commission staff June 18 and repeated its call to “protect the public by declaring a moratorium on the activation of digital content protection capabilities” until the FCC completed an evaluation whether “proposed uses of content protection technologies by MVPDs are in the public interest.”