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Information on this slide is confidential property of DTS. Any unauthorized copying is strictly prohibited. © 2016 DTS, Inc.

Making Money With HD RadioTM

Technology

Presented to Rising Through The Ranks

August 16, 2017

Joe D’Angelo

Senior Vice President

Xperi, Inc.


The Battle for the Dashboard

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HD RADIO TECHNOLOGY AGENDA

What Is HD RadioTM Technology

Who we are at Xperi

HD Radio Technology by the Numbers

Summary

Programming, Promotions & ROI


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Product Licensing

IP Licensing

Product Licensing

Semiconductor Technologies &

IP Licensing

Semiconductor Packaging

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ing Digital

Radio

Bio

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Iris

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Inte

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Tech

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logi

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DM

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2.5D/3D IC M

EMS

Image Sensor

Memory Stacking

Wafer Bonding

Audio Compression

Virtualization Connected Radio

SiP

Machine Learning

Wireless Audio

Machine Learning


Automotive

Auto-head units Broadcast infrastructure Driver assistance technology

Product Licensing Solutions • Xperi Technologies are Integrated in More Than 5B Devices Worldwide

*TAM: Total addressable market

TAM = ~230B units

Home TVs Blu-ray players AVRs Soundbars Wireless speakers Game consoles Set-top-boxes

DTS HD Master Audio™ DTS X™ / Virtual X™

IMAX Home Play-Fi™

Mobile

Smartphones Tablets PCs Gaming headsets Drones Activity cameras Mobile applications

FotoSavvy™ FacePower™

DTS HeadphoneLX DTS Sound

3 Source: IHS, IDC, Parks Associates, Sensian Research, Prisemark LLC Nov 2016 report and DTS internal data

HD Radio™ DTS HD Master Audio™ DTS Neural Surround™

Automotive DMS


HD RADIO TECHNOLOGY HOW IT WORKS

Analog and digital signals sent separately

Audio combined prior to transmission

Composite signal transmitted by station

Multipath distortion only affects analog signal

Broadcast is compatible with both analog and digital radios — only digital radios receive digital multicast channels

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Program Info displays information such as artist, song title and album name.

FM stations can divide the digital signal offering up to 3 additional digital only audio programs on HD2/HD3/HD4 multicast channels. Across the US there are over 2,100 AM and FM stations now broadcasting with HD Radio Technology, and over 1,800 new extra local HD2/HD3/HD4 channels also available.

HD Radio Technology offers crystal clear, static free sound with none of the clicks, hisses or pops associated with traditional analog radio. FM sounds like CD quality and AM sounds like FM stereo.

Images related to the broadcast can be displayed on the radio display, including items such as album cover art and station or advertiser logos.

HD RADIO AUDIO PROGRAMMING IS 100% SUBSCRIPTION FREE!

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HD RADIO TECHNOLOGY AUDIO FEATURES


FM STATIONS CAN DIVIDE THEIR DIGITAL SIGNAL OFFERING INTO UP TO 3 ADDITIONAL DIGITAL-ONLY AUDIO PROGRAMS ON HD2 / 3 / 4 MULTICAST CHANNELS

Digital simulcast of analog signal 1 ADULT CONTEMPORARY

DEMOGRAPHICS: WOMEN 25-54

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HD RADIO TECHNOLOGY DIGITAL AUDIO FEATURES

3 Simulcast of co-owned AM All-News station

ALL NEWS DEMOGRAPHICS: MEN 25-54

2 Targeted Smooth Jazz SMOOTH JAZZ

DEMOGRAPHICS: ADULTS 35-64

4 Network Sports Programming SPORTS RADIO NETWORK

DEMOGRAPHICS: MEN 18+


Images related to the broadcast can be displayed on the radio screen, such as album cover art and station logos.

FM stations can divide the digital signal offering up to 3 additional digital only audio programs on HD2-HD3-HD4 multicast channels.

Program Info displays information such as artist, song title and album name.

HD Radio Technology offers crystal clear, static free sound with none of the static, hiss or pops associated with traditional analog radio. FM sounds like CD quality and AM sounds like FM stereo.

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HD RADIO TECHNOLOGY HONDA AUTO IMPLEMENTATION


200+ U.S. vehicle models offer HD Radio Technology; 100+ as standard

All 36 popular vehicle brands in the U.S. offer HD Radio Technology

Weekly reach of HD2-HD3-HD4 channels alone is almost 8.4 million

Virtually 100% coverage of top 100 Nielsen Metros

79% of radio listening is to stations broadcasting via HD Radio Technology

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HD RADIO TECHNOLOGY BY THE NUMBERS

95%+ of all Americans are able to receive an HD Radio signal

41%+ of cars sold in 2016 in the U.S. came with HD Radio Technology

As of April 2017


Weekly Reach in Thousands


Source: Nielsen Audio NRD Database Persons 12+ Total U.S. Includes analog translator listening

HD Radio multicast-only listening (Total U.S.) (HD2 / HD3 / HD4 channels only)

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TSL to digital audio services in HD Radio-Equipped Cars: 103M hours/wk

Stations Delivering Digital Traffic Services (iHeart and BTC): ~700

Total HD Radio Artist Experience Stations / Channels: 866 / 1,565

Total HD Radio Audio Services (Digital Channels): 4,053

Stations On-Air / HD2-HD3-HD4 Digital Channels: 2,148 / 1,905

U.S. Stations Converted: 2,410

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As of April 2017


HD Radio auto penetration over 15% in the 25 largest U.S. cities:

= Over 40 million HD Radio receivers in U.S., Canada & Mexico

+ Over 4 million consumer HD Radio home and portable receivers

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Almost 36 million HD Radio-equipped cars on the road in North America


West Palm Beach: 21.0% of all cars on the road

Los Angeles: 21.1% of all cars on the road

San Francisco: 18.3% of all cars on the road

New York City: 22.8% of all cars on the road

Miami: 23.4% of all cars on the road

As of April 2017


All major auto brands offer factory-installed HD Radio Technology

Vehicle Brands (Chevy, Ford etc.)

Vehicle Models (Malibu, Focus etc.)

HD Radio Technology Standard

2010 2011 2012 2013 2014 2015 2016 Y-T-D

28

154

67

16

86

36 21

109

61

92

36

198

33

166

76

212

114

36 36

109

216

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THE BATTLE FOR THE DASHBOARD

Information on this slide is confidential property of DTS. Any unauthorized copying is strictly prohibited. © 2016 DTS, Inc. 15

HD RADIO TECHNOLOGY PROGRAMMING, PROMOTIONS & ROI Programming Strategy:

Flanking a competitor

Company:

CBS Radio - Baltimore

Station:

WLIF New Country 101.9 HD2 / 106.1 FM

Approach

“New Country 106.1” is a translator fed from the HD 2 channel of CBS Radio's 101.9 FM

The programming strategy is to challenge perennial country leader WPOC

The translator signal of New Country 106.1 targets country hot zips in the Baltimore market for a direct selling approach


Programming Strategy:

Rounding out a cluster

Company:

Apex Broadcasting - Charleston, SC

Station:

WMXZ HD2 99.3 The Box

Approach

The Box features a locally-targeted Urban Contemporary format

Apex’s strategy is to develop ROI with Urban and Hip Hop listeners in the market

The HD2 channel complements the Hot AC main channel

Both content offerings are well branded and targeted for the market

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HD RADIO TECHNOLOGY PROGRAMMING, PROMOTIONS & ROI



Introducing a niche brand

Company:

Saga Broadcasting – Springfield, MA

Station:

WLZX 99.3 HD2 / Hits 94.3 FM

Approach

CHR formatted “Hits 94.3” targets the 5 major colleges of Hampshire County MA.

“Super serves” the student population of the area with 2 specific brands.

Rock-formatted main channel serves the rock audience.

The HD2 channel is niche programmed CHR to appeal to area’s student population and establish a new brand for the station.



Rounding out content offering in the market

Company:

Minnesota Public Radio

Station:

KNOW 91.1 / 91.1 HD2 / 91.1 HD3

Approach

91.1 KNOW is an NPR affiliate station offering full NPR/APM content

The HD2 channel has a well-regarded classical format

The HD3 channel offers a special musical service called “The Current”.

Listeners can support the station with the purchase of HD Radio receivers through a link to Amazon directly from the station’s website.


HD RADIO TECHNOLOGY PROGRAMMING, PROMOTIONS & ROI Station:

KNDE Candy 95.1 / Rock Candy HD2 / Play By Replay HD3

Main Marketing Premises:

All 3 HD Radio channels targeted at market’s 46,000 college students

HD2 has heavy local emphasis on indie and local band scene

HD3 is “Play by Replay”, with local High School & College sports

Key Selling Propositions:

Create artificial scarcity (“shortage”) with only 2 min/hour of spots, & only 5 sponsors

Creative packages - Sold local apartment complex 6 month schedule (spots & mousepads)

Gave their prospective advertisers HD Radio receivers so they could hear the station

Unique Sales Opportunity:

Local high school & college sports play-by-play guarantees advertisers & listenership



WXCY HD2 Graffiti Radio


Recognize paying attention to listener’s wants, needs and desires key to growth

Getting young consumers when buying habits are being formed

Crafting advertising vehicle listeners & advertisers both wanted to be involved with


Positioning the station like FM was positioned in the late 60’s; young, hip, underground

Selling sponsors annual campaigns emphasizing creating young consumer loyalty

Filling need in marketplace for their unique alt rock music mix


Station-specific spots that speak directly to their audience



WCKT Cat Country 107.1 / HD2


Create new NTR (Non-traditional Revenue) stream

Use HD2 to generate new dollars via annual event

Take advantage of all station’s digital on-air assets


Create event to fill restaurants, hotels and local businesses during off season

Involved BMI to get songwriters to appear; hotels comp’d rooms, station promoted event

Involve multiple market/cluster stations to maximize revenue potential


Local convention & visitors bureau was anchor sponsor & provided volunteers to work


HD RADIO TECHNOLOGY ARTIST EXPERIENCE

Images related to the broadcast can be displayed on the radio screen, such as album cover art and advertiser or station logos


Images related to the broadcast can be displayed on the in-car display, such as album cover art, station logos and of course advertiser logos

Monetizing HD Radio Channels Artist Experience


Monetizing HD Radio Channels

IN-VEHICLE

DISPLAYS LIFT

MESSAGE RECALL

FOR

ADS


LISTENERS

REMEMBER

MORE BRANDS

WITH

ENHANCED

ADS



LISTENERS

REMEMBER

MORE BRANDS

WITH

ENHANCED

ADS



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Making Money With HD Radio Technology Presented to Rising ... Money With HD... · infrastructure Driver assistance technology Product Licensing Solutions ... Wireless speakersDrones