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Command Audio Exits U.S., Moves On To Focus On U.K. Market

3/12/2001 02:00:00 AM Eastern

REDWOOD CITY, CALIF. -Command Audio cited the advent of satellite and terrestrial digital radio for its exit from the U.S. market and new focus on the U.K. market.

Early last year, the company launched its audio-on-demand subscription service through retailers in Denver and Phoenix, where multiple FM stations continuously transmitted updated audio programming via subcarrier frequencies to a $199 Thomson-made handheld receiver. The battery-powered device stored up to eight hours of customized content that subscribers could play back at their convenience.

In a car, drivers could install a car kit to play back the content through a car's audio system and deliver power via the car's cigarette lighter.

Command turned off its service in the two markets and allowed consumers who purchased the product to return it for full credit.

The imminent launch of satellite digital radio, and the potential for terrestrial digital radio to launch late this year or early next, could make Command's analog-broadcast technology "obsolete" even while the company was building out its analog footprint, said chairman Don Bogue. Both digital technologies have the potential to offer more robust on-demand audio services because of their "fat pipes," he said.

As a result, the company decided to license its technology to companies that will offer content in the Command format to digital radio broadcasters in the U.K. The licensees will contract with digital radio stations to deliver the content.

In the United States, the company licensed national content for its service, developed local content such as weather and traffic, and marketed the service and device to retailers.

In the U.K., terrestrial digital radio already reaches 70-80 percent of the population, Bogue said, creating a ready-made market for a Command-like service for broadcasters that want to differentiate their programming.

A consortium of companies, including large U.K. broadcasters and Ford, has chosen Command as its exclusive supplier of on-demand audio technology, said Bogue, who added that the consortium is bidding for digital radio licenses that will reach half the population.

When asked whether the service met expectations in Denver and Phoenix, he said Command saw the rollout there "as a test" and was "delighted with the information we learned from the test markets." Some people dropped service within 30 days to take advantage of a money-back guarantee, but of those who remained, "churn was less than 1 percent a month."

In the United States, Command was also plagued by delays. Bogue also said the company initially had some difficulty leasing subcarrier bands from radio stations because "it took time for them to understand the concept."

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