European pay-radio: Getting ready

The past couple of years have not been good for pay-radio’s prospects in Europe. We’ve seen the Worldspace catastrophe, now well over two years into its Chapter 11 bankruptcy (WS filed in October 2008) and with legal bills still running into the hundreds of thousands of dollars a month.
Worldspace’s European and other international operations were also wound up as part of the failure, and left suppliers, content partners and staff out of pocket. The greater risk was that the whole concept of European pay-radio would prove to be a non-starter, especially given the somewhat downbeat view from many industry experts that Europe’s multilingual challenges were too great and that its high-quality public and commercial radio was quite sufficient for its audience.
It is now known that Worldspace’s founder Noah Samara’s latest involvement in a company seeking to acquire TerreStar, but there also remains his ownership of the actual Worldspace satellites as part of his $5.5m purchase of assets via his Yazmi vehicle in October 2010. Meanwhile, Liberty Media and in particular John Malone’s name keeps cropping up on assorted penny share blog sits as “being up to something”. This might be total wishful thinking, of course.
AfriStar, the first Worldspace craft to be launched, is fast approaching the end of its design life. Launched in October 1998 with a 12-year operational design life (and fuelled for a 15-year orbital station-keeping life) the formal end-of-life is now very close. AfriStar also has known solar array problems. So far, so bad.
But there remains a strong undercurrent of support from a couple of potential pay-radio service operators, as well as platform providers. Indeed, it could now fairly be said that there may at long last be light at the end of the tunnel.
First up, although not necessarily the first to market, is Ondas Media, which talks of a service launch in the coming two years, and that they are making solid progress. They say they are also working closely with the two transmission licence holders, namely Solaris Mobile and Inmarsat. Solaris Mobile has its satellite payload waiting in orbit, while Inmarsat has yet to announce its plans to occupy the frequencies allocated to it by the European Commission, and the delay might see a push from Solaris to be allocated the Inmarsat spectrum if forfeited.
This past October saw Ondas demo a working version of its radio reference technology to BMW, for example. During 2011 Ondas says “we plan to extrapolate that demonstration to include new car makes and models, and to have live content over the air.” Ondas has an exclusive radio development contract with radio technology specialists Delphi. Ondas already has commitments from automakers BMW, Renault and Nissan. Test transmissions were also undertaken last year in Italy to showcase both satellite and terrestrial signals to test vehicles, and Ondas says that this year’s efforts will focus on building out the terrestrial repeater networks in the main European high-value markets.
Ondas is also quietly building its support from broadcasters, and while it would be comforting to see these publicly renewed, and extended, we understand that Prince Alwaleed bin Talal’s Rotana music group is still on board as is RTL and the UK’s Jazz FM.
The past two years have not been the best for raising fresh venture capital, and Ondas Media’s CEO Dave Kruger says that as with any start up getting their hands on early access to cash would have made progress easier, “but we are comfortable living within our means during these challenging times with the global economy. Investor interest remains very high for European satellite radio, tempered of course with the rational measures any investor must take in uncertain financial conditions. With the support of the car companies, we’ve managed to smooth the build out of the system to facilitate the capitalisation of the project.”
Specifically, Kruger says the car companies – in giving their support – have permitted a road map to be created whereby Ondas’ radio specification (ETSI Satellite Digital Radio) can be integrated into vehicles for the 2013-2014 time-frame.
The second major player in this space is France’s Onde Numérique, headed up by Franz Cantarano, a former VP at Worldspace, and committed to supplying more than 50 radio channels, “tailored to a French audience”. Last July, Onde partnered with Actia Sodielec for the procurement of SDR transmitters in France and elsewhere in Europe. Onde had already acquired some of Worldspace’s liquidated assets in France from the bankruptcy court in Toulouse.
As an aside, telephone chipset giant Qualcomm had secured a chunk of L-band capacity in the UK, now no longer needed for its now abandoned FLO TV plans. Qualcomm seems to want this spectrum re-allocated away from media usage to telco, and this is a decision CEPT (European Conference of Postal and Telecommunications Administrations) will have to make in due course, no doubt with strong opposition from the likes of Ondas and Onde. Cantanaro says he had hoped to get his French system up and running before expansion into other markets.
It seems both would-be broadcasters are seeking to make announcements at the Mobile World Congress in Barcelona (February 14-17) and certainly Solaris Mobile says it expects to be “busy” and very much present at the giant show.

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