Ibiquity Unveils New Licensing Incentive Program

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Ibiquity Unveils New Licensing Incentive Program

Feb 21, 2007 2:30 PM

Columbia, MD - Feb 21, 2007 - Ibiquity Digital has announced a new incentive program for broadcast groups installing HD Radio technology that extends current discounts on license fees for groups meeting certain conversion commitments. The program also allows participating groups to lock in discounts on future station acquisitions, making it particularly advantageous to smaller groups and independent station owners.

Per the terms of the program, any radio broadcast group not currently licensed under a previous Ibiquity Digital station conversion incentive program will have its primary audio license fees capped at $10K per station (HD Radio license fees are scheduled to increase to $15K per station in July 2007 and then to $25K in July 2008).

"The top 20 radio broadcast groups own just 20% of the AM and FM stations in the U.S., which means the overwhelming majority of the nation's radio stations are owned by small groups and independents," said Ron Davis, chairman of the Small Market Operators Caucus. "This new program is an especially good fit for small, independent broadcasters, as it will help us accelerate our transitions to digital."

Qualifying groups will commit to license and convert stations under the following terms:

  • All group stations currently licensed with Ibiquity Digital must be converted under the existing license terms;
  • At least one group station not already converted must be converted by Dec. 31, 2007;
  • 50 percent of all group stations with revenues in excess of $300,000 must be converted by Dec. 31, 2010, based on a schedule outlined in the license commitment agreement (LCA);
  • $2,000 of the $10,000 license fee for each station committed under the incentive is due by Sept. 30, 2007. The remaining $8,000 for each station is due at the time the station is licensed.

The discount applies to all group stations, pending the execution of a 2007 LCA between the group owner and Ibiquity Digital by Sept. 30, 2007. The LCA is available online at www.Ibiquity.com/broadcasters/becoming_a_broadcaster.

Radio magazine observation: The licensing fees for HD Radio have been a point of contention for many broadcasters, particularly the smaller and independent owners. This program does not eliminate the fees, but it does reduce the cost. Because of the licensing fees, some have viewed HD Radio as an interest only for the large owners. Ibiquity has an obvious financial interest in the development of its technology and wants to recoup those costs, but it also wants to encourage more stations to adopt the technology. Incentive programs such as this will help that effort.