The Price Of FM In Sprint Phones? $15 Million Worth Of Inventory!

[Colorado Media Newsroom]

From All Access:

In early JANUARY (NET NEWS 1/8), ALL ACCESS reported SPRINT pacted with representatives of the American radio industry that would enable SPRINT customers to listen to local FM radio stations on select ANDROID and WINDOWS smartphones during the next three years. FM radio could be delivered through the NEXTRADIO tuner application or other radio apps or services.
Now, more details are emerging -- specifically compensation to SPRINT -- are coming out.
RADIO WORLD reports, "EMMIS CEO JEFF SMULYAN confirms the deal calls for SPRINT to produce 'a minimum' of those 30 million phones; in exchange for $15 million worth of station ad inventory from broadcasters over each of the next three years; that works out to about $10,000 worth of ad inventory per station."
Additionally, SPRINT would get 30% of the "interactive advertising" business under the deal.
SMULYAN told RADIO WORLD, "The $15 million would be paid in quarterly increments, including agreements on how many FM-enabled phones will be shipped each quarter. EMMIS has begun reaching out to broadcasters in order to garner support."

more (http://www.allaccess.com/net-news/archive/story/114916/the-price-of-fm-in-sprint-phones-15-million-worth-?ref=rss)

[Colorado Media Newsroom]

From Radio Online:

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While the radio industry initially applauded Sprint's decision to include the coveted FM chip in at least 30 million cell phones, the true cost of the move is only now being revealed. Radio is pledging $15 million in advertising trade over the next three years to Sprint to make the FM chip a reality. In theory that translates to an estimated $10,000 in inventory for every station. Details are still being ironed out but Emmis CEO Jeff Smulyan, who has led the charge, indicates a positive response from the industry and hopes to have signed commitments from the various radio groups over the next 30 days.

An initial idea is to have the $15 million divided by market size. Smulyan says, "We're going to try to make it as fair as is humanly possible." One interesting aspect is that Sprint will not necessarily have to use the advertising time to promote their products. In fact there is discussion about Sprint selling the ad time for cash via their own ad reps. A big concern here is the possibility that Sprint could sell its inventory to national advertisers that already purchases time on a given station, thus cutting into that station's national revenue.

Of course is Sprint fails to follow through on the pledged 30 million FM-equipped cell phones, broadcasters could reduce the $15 million amount. However Smulyan doesn't see that happening saying Sprint has been "wonderful partners" thus far.

more (http://news.radio-online.com/cgi-bin/rol.exe/headline_id=n26332)