by Demian Russian
Ludwig Enterprises, Inc. (OTC: LUDG.PK) plans to compete with Sirius XM Radio (NASDAQ: SIRI) with a new national digital radio network. Ludwig says it’s ready to deploy this national digital radio network, in 50 of the largest U.S. markets, using an unused portion of the newly issued ATSC (Advanced Television Systems Committee) digital television spectrum. This will be accomplished utilizing the ATSC standard for mobile DTV broadcasting, A-153. Ludwig says their service will be “all digital, all the time, in all locations, rivaling the quality existent on HD or satellite radio.” According to the company: “The patented technology is unique in that it utilizes a “carousel” that interleaves information streams in a repeating pattern for inclusion into a digital video broadcast (Digital TV / also known as HD TV). In the case of Ludwig’s data carousel its uniqueness is defined by multiple dynamic digital audio programs, not just one.”
Ludwig has also developed and patented a new hand held radio receiver called “The One”, which resembles the size and appearance of an Apple (NASDAQ: AAPL) iPhone. The portable unit is designed for mobile or fixed base use and will be compatible with “off the shelf” docking stations for home and vehicle use. Besides its ability to receive digital audio, the 2-way communication device will also support video, text, signage, educational and social networking features. While Ludwig has not disclosed what the specific price of “The One” will be at launch, they did say that the price of the radio would be “modest” and will include a lifetime subscription to the service. According to the company: “The One” radio like Sirius XM is a subscription based service for legal reasons. A one-time subscription fee is charged upon activation and the radio is given as a gift. Unlike Sirius XM Ludwig does not charge a monthly fee.” Apparently, the company’s business model will be primarily advertiser supported, as there will be no monthly charge for the radio service.
The company calls “The One” radio “an advertiser’s dream come true.” The radio will also be equipped with a data transmitter and GPS module, which will allow for the daily reporting to Ludwig, in 15 minute sampling intervals, of the exact channels and advertisements listened to by each radio receiver. Ludwig says that within 72 hours of the time a commercial airs, the corresponding advertiser will know exactly how many users heard the advertisement as well as what specific demographic/statistical model those listeners fall into — including income level, age and family size. Utilizing the device’s GPS module, each individual radio will be “marked and overlaid with statistical information (on a block level) available from the U.S. Census Bureau.” According to the company, “The GPS will specifically be de-tuned sufficiently so as not to cause privacy issues.”
At deployment, Ludwig’s programming will initially target the ethnic, senior citizen and disenfranchised youth markets. The company says that these specific markets have been “un-served or under-served” by the commercial broadcasters of today. Ludwig says that it “can capture the 30 million foreign born listeners that together wield formidable economic clout.” The company points to data which shows the combined buying power of this demographic exceeded $1.5 trillion in 2009. At roll out, the approximately 50 channels of programming will include many ethnic talk channels, including programming in Chinese, Russian, Greek, Pakistani, Hebrew, Filipino, Polish, Haitian, and many more languages. Other programming will include classical and techno music, educational and religious programs, audio books and old time radio shows, as well as 24 hour news coverage without commentary. Ludwig also plans to broadcast between 100-250 local content programs in each of the largest 50 geographical markets.
Having a plan to compete with Sirius XM and actually succeeding are two different things. Ludwig will also be competing with HD radio, which has been struggling to resonate with consumers. Will Ludwig’s programming be compelling enough to gain any traction? Will listeners tolerate the commercials? Will Ludwig be able to secure the capital required to fully build out its infrastructure? Will there be FCC roadblocks? Stay tuned…
Position: Long SIRI
Contact the Author: demianrussian@satelliteradioplayground.com
I’m not really sure this really deserved an article. There are so many things wrong with this company’s story that I’m not sure where to begin.
Targeting the disenfranchised market with a premium radio service just seems like a swing and a miss. Would advertisers pay to reach people with little disposable income? Who will buy these radios for them? Also, most of the things the radio does can already be done by tons of other devices. This just sounds like a pink sheet pump story to me.
Dogstar4Evah,
“I’m not really sure this really deserved an article. There are so many things wrong with this company’s story that I’m not sure where to begin.”
The article is not an argument for Ludwig’s viability nor a recommendation to buy the company’s stock. I clearly state in the article: “Having a plan to compete with Sirius XM and actually succeeding are two different things.” Satellite Radio Playground reports news pertaining to the satellite radio sector, of which this qualifies as such.
As a second generation immigrant from the former Soviet Union and nationalized citizen of this country I find the comments amusing in their naiveté and ignorance. He could not be more off the mark. Who does Dogstar4Evah think is the real engine of this economy? The banks or the Wall Street brokers? No, it is the immense immigrant population (30million +) legal or naturalized that are the new blue collar workforce, we represent over a trillion $ market according to the US Census Bureau; we are the largest single purchasing group in the US. We are doctors, nurses, business owners, scientists, and taxi cab drivers. Regardless of what Dogstar4Evah may think, we can afford a radio, especially when the service if free.
Whether Dogstar4Evah, likes it or not or worse, wishes not to acknowledge it, we are here to stay and we are here to consume. Just as the Irish and Italians fantasize about their home country, keep the traditions and pass them on to their children, we too like to keep the bond we have to the place where we came from. A national radio network that keeps us informed of the news, sports and welfare of our origins is a great idea, and I am confident will be endorsed by the millions like me. I think these devices are going to sell like hot cakes, and the service will be welcomed and embraced as overdue.
The only thing the comments made by Dogstar4Evah made me do, is want to promote the service to my friends and family.
Sorry DemIan. My last line, I meant the company’s story sounded like a pump story, not the story you wrote. I never thought you were trying to pump anything.
As I have posted many times in the past, Sirius Xm should be tiered to accommodate all listeners from all demographics. I still believe you could have satellite radio that has a high end dollar value and at the same time offer some type of sponsorship format for people who can’t poney up the cash. Sirius Xm could be synonymous with all digital entertainment. If we have our noses up in the air because Sirius Xm offers something for free (ad based) then I think we lose a large segment of the market. Capture as many customers as possible and make Sirius Xm the standard for all. I think they are letting the competition off the hook. The tiered format can be a fit for all if handled properly. There are just to many idle radios. I know there is a cost to put these radios in new vehicles but to start a tiered ad based format for the used car market (along w/ the paying sub tiers) would be the way to start. Even if this product by LUDWIG does or doesn’t grab part of the market someone else come could along as technology changes w/ something that does work. Why even keep the door open? Start grabbing a bigger piece of the pie. For those who think this waters down Sirius Xm ,it would have no effect on the current subs paid formats!