[BC] The economics of digital
Steve Newman
shnewman
Fri Jul 28 10:24:42 CDT 2006
I'm the eternal optimist but this one doesn't make the cut. The figures
do...the reality doesn't. (my opinion) Let's watch and see.
Steve
----- Original Message -----
From: "Mike McCarthy" <Towers at mre.com>
To: "Broadcasters' Mailing List" <broadcast at radiolists.net>
Sent: Friday, July 28, 2006 9:46 AM
Subject: [BC] The economics of digital
>I said this once before and it bears repeating. The broadcasters of the
>USA and elsewhere which adopt this system are merely a loss leader or maybe
>a break-even point for Ibiquity. Ibiquity will not clear a dime selling the
>transmit side of the equation. The "seed money" so to speak. Even if every
>single station in the USA buys the system, they're still in the hole by
>many tens of millions.
>
> If/when receiver production/sales pick up, the royalties associated with
> the firmware (license) loaded in each radio will be the big payoff. At
> $20/RX royalty, 10M radios yields the $200M investment made to date. I'm
> sure that royalty will scale down somewhat in future years. But even at
> $5/RX, 200M radios is $1BILLION. (It is said we have something over 400M
> radios in the USA at this time.)
>
> For the purpose of this argument, assume it takes another 10 years to get
> to that 200M point. I'll gladly take a 5X return on my initial investment
> in even 10 years. 40% annual return. That's Wall Street's thinking....as
> well as the broadcaster investors...
>
> NOW...having aid the above. It's a HUGE gamble and the risks extremely
> great. There is no certainty to the payback or payoff. But when iut
> happens, it will pay off big to the backers.
>
> MM
More information about the Broadcast
mailing list