IBiquity IPO ‘Not Out of the Question for 2006, CEO Says
IBiquity Digital’s next round of funding will be “a liquidity event, which we have always assumed would be an IPO” that would raise proceeds of $50-100 million to support the expansion of HD Radio, CEO Bob Struble told Harris Nesbitt’s Media & Entertainment investor conference in N.Y. Mon.
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“We've got to sell a few radios first,” before launching an IPO, Struble said. IBiquity had hoped the best timing for an IPO would come in 2005’s 4th quarter “at the earliest,” he said, but that timeline now “is optimistic to say the least. If things go well and we sell a few radios, ‘06 is not out of the question.” Struble said the company’s focus is on “building a good business, and if that happens, lots of good things will come.” It has raised about $200 million the past 10-15 years. Struble joked many regard fundraising as iBiquity’s “core competency.” “We've got a lot of cash in the bank,” he said.
Announcements are expected soon on the international rollout of HD Radio technology, which IPO proceeds would help support, Struble said. International markets that have expressed an interest in HD Radio include Brazil, Canada, France, Mexico, the Philippines, Poland and Switzerland, Struble said. Because HD Radio has gained “traction” in the U.S., other markets throughout the world are comfortable there would be a large supply of low-cost radios, he said. Moreover, that the FCC has endorsed HD Radio represents a “gold seal of approval on the technology” for overseas markets that may consider adopting it, Struble said.
In the U.S., the HD Radio “infrastructure is in place,” and station adoptions are running “ahead of schedule,” Struble said. He said 963 stations would be converted for HD Radio this year, increasing to 3,500 by 2008, 5,500 by 2010, 6,500 by 2011. In receivers, within the next year, 8 automakers have sourced HD Radio product for 30 OEM models, Struble said. A prevalent “trend to watch” the next year will be introduction of tabletop HD Radios, Struble said. Receiver development overall is “coming at a pretty rapid pace, and we're feeling good about the pipeline as well.”
Lack of HD Radio consumer awareness “is the missing piece,” Struble said. “If we went out and grabbed 10 people on the streets of Manhattan and said, ‘What’s HD Radio?’, you'd probably get blank stares from most of them,” Struble said. He predicted awareness would improve as more broadcasters came on line. “This is an industry that knows how to promote,” he said. “They will do what they need to speak to their listeners in ways that make sense for their listeners and basically, excite them about the technology.” Consumer awareness “is moving in the right direction,” and awaits “significant announcements” soon of broad industry campaigns, he said.