An interview with the new president of NAB.
WASHINGTON: Turns out “the beer guy” has a sense of humor.
For instance, at NAB2006, reporters have been invited to “Nab a beer” with David Rehr, the former president of the National Beer Wholesalers Association. He’s now the president and chief executive officer of the National Association of Broadcasters, replacing Eddie Fritts.
Rehr, 46, has been on quite a learning curve since he stepped into the big office at 1771 N Street NW in December. He’s been traveling the country, meeting with broadcasters and their advertisers, to learn about the pressing issues facing radio and TV.
The search committee selected Rehr for the top job from among 80 potential candidates; among his attributes, members cited Rehr’s aggressive lobbying style on Capitol Hill as well as his formidable expertise at raising large amounts of money and making those funds work for members of the beer wholesalers group.
Rehr has gone on the offensive for radio. He informed record labels that source encoding is an unacceptable solution to the so-called broadcast flag for content protection. He advised FCC Chairman Kevin Martin that the cross-ownership ban is archaic and needs to be lifted, and that XM Satellite Radio’s planned acquisition of wireless spectrum should be blocked.
Under his leadership, NAB is taking credit for the introduction by several senators of legislation that would require the FCC to codify that satellite radio is a national-only service and may not offer locally originated services on nationally distributed channels. A similar effort began earlier in the House.
“It is crystal clear,” Rehr stated, “that both XM and Sirius – with nearly $1 billion in combined losses last year and having failed as a national programming service – are skirting the intent of their original FCC licenses. This bill holds satellite radio accountable to those licenses.”
He also has said the commission should treat satellite radio the same as broadcast radio in regards to indecency.
Rehr, a former congressional GOP press secretary, is also focused on radio’s digital transition. He’s talking to his counterpart at the Consumer Electronics Association, Gary Shapiro, and others about how to encourage the inclusion of HD Radio in new digital devices. He was in New York City to attend the announcement of the formation of the HD Digital Radio Alliance on his second day at the new job. A Boston Acoustics Recepter HD Radio outside Rehr’s office has a sign on the top that reads ‘Embrace the Future, the Power of HD Radio.’
Under Rehr’s stewardship, the trade group is moving away from referring to itself as a lobbyist for broadcast interests because the word could be seen as reactive and defensive – and is instead calling itself an advocate for stations. The word suggests that NAB is on the offensive and frames the debate and its direction, according to Rehr.
In his first radio trade press interview, Rehr looked at home in his new surroundings; he seemed animated and at ease with questions as he spoke with Radio World News Editor/Washington Bureau Chief Leslie Stimson in his new office.
RW: How does it feel to be the new head of NAB? You’ve also been traveling quite a bit.
Rehr: It’s very humbling. It’s a great organization, representing great people, and it has a great deal of responsibility. The more I travel and meet our members and interact with them, frankly, the more humbled I am.
To give you an example of some of my experiences, I went up to Philadelphia and met with David Fields from Entercom, a large, publicly held radio company. So I got that perspective. Then I went to Carthage, Texas, to see Jerry Hansen. He and his wife run a radio station in Carthage, very small, maybe six full-time employees in a town of some 5,800 people.
I spoke at the RAB meeting and that was really my first public meeting was with radio people there.
RW: At the RAB you probably heard a lot about radio being in a sales slump. Radio is up against MP3 players in the dash; iPod adapters are in the car, satellite radio is too. Are there ideas that made an impression on you about how radio can combat all these threats?
Rehr: I come out of an industry that has zero to negative growth. Now on the one hand, we want double-digit growth. We want advertising sales to increase, but I kind of got the impression at the RAB meeting from some, that … it’s going to be double-digit and we’re just going to keep growing in the future. …
Some of the people I talked to talked about growth; but (said) that growth has slowed. …
(We should) try to ensure that we have a competitive edge, or at least the people who make the advertising decisions understand the power of radio. …
Something that particularly drives me nuts is everybody says, “Internet, Internet, Internet! Click-through rates!” I go on the Internet all the time. I click through it; I don’t buy it. Where, if I listen to something on radio –
I just think it’s a better experience and a better investment for advertisers. But we need to be sure that the advertisers and the agencies get reconnected with the power of radio. That’s part of it; I think getting new people to advertise is part of it.
A lot of it is creating the tone and movement that radio is cool. People say, ‘Well, you’re a dinosaur.’ Well, we’re not a dinosaur.
We had this event on Capitol Hill [the State Leadership Conference at the end of February]. We had 550 radio and television broadcasters. We had a sticker that said, “Radio and TV – wireless before it was cool.”
RW: A Jacobs Media study said young people don’t think of radio as portable.
Rehr: Apart from HD, which I think will give us a lot of sizzle, I also think we need to make a more concerted effort to interact with technology and technology manufacturers. My watchword has been that every gadget should be able to get the signal. …
Sure, people listen to iPods; but they’re already working on making an FM adapter to iPods. Part of what people want or desire is not only, in this case, the music, but also kind of a connection … hearing voices and hearing news and being connected – because the iPod is essentially a downloadable Walkman.
RW: Ibiquity wants HD Radio to be on every device, including cell phones.
Rehr: We want every broadcast signal to be on every device possible. That gives people immense choice. [But] we’ll all have to work harder at competing.
RW: What is NAB going to do to help the digital radio rollout? The organization is behind HDTV; what’s it doing for HD Radio?
Rehr: NAB is extremely committed to making HD Radio a terrific success. We don’t want to duplicate what Bob [Struble] and Ibiquity are doing, or, frankly, what Peter Ferrara is doing and the HD alliance. They’re doing a great job. The way we’re approaching it is we’re trying to encourage it, promote it, talk with as many people about it. …
Over time as I get more involved in this, you’ll see more proactive activity on the part of the NAB with HD Radio.
RW: Are you pursuing more close relationships with Gary Shapiro at CEA? Sometimes NAB and CEA have tangled. With the content protection issue going on with the RIAA, it would seem NAB and CEA could be aligned on that.
Rehr: I’ve met with Gary. I think that we’ll have a good working relationship. There’ll be times that we agree to disagree, but we won’t be disagreeable, because on many issues we stand together, and we stand pretty strongly together.
It’s up to us to ensure that Gary, the folks at CEA and the manufacturers understand that the right thing to do also will be profitable for them. Promoting HD Radio, those pieces of equipment, although the price is going to fall over time, probably will end up making their manufacturers more money than some of their other devices. …
Although we would hope that our Detroit friends would hasten, speed up, encourage – if we have to cajole them, to get more HD Radios in cars.
RW: Does NAB have a sense of what the FCC’s going to do about HD Radio as far as when it’s going to roll out final rules, whether those might include the ability to go AM digital at night and also multicasting?
Rehr: I don’t want to speak for Commissioner Martin, but we’ve been talking to the FCC about those issues. My suspicion is once you get the full complement of the FCC, you’ll see some action.
I’ve met with all the sitting commissioners to date. There’s kind of a backlog because everyone is waiting, basically in the whole telecommunications, broadcast, cable industries … the logjam should be broken with the addition of a fifth commissioner.
RW: Are there similarities between this job and your last one?
Rehr: Yes. I’ve been in Washington for 25 years. I worked on Capitol Hill. I know how the process works. Beer was as heavily or more heavily regulated than broadcasting. So I understand how to move within a highly regulated industry.
In most communities in America, your beer distributor is a highly visible, highly community-oriented person, as is your local TV affiliate owner, general manager or radio station owner. So there are a lot of similarities. Now I think the broadcast issues, frankly, are a little more complicated. And I recognize that.
Over the last few years, actual consumption of beer is flat to declining. So you have costs going up. Close your eyes and say, “What industry are you in?” Revenue is flat to declining and costs are increasing. It could be broadcasting. It was beer. …
RW: What will you do to build radio membership and get back some of the groups that have left?
Rehr: We will build the membership base. We are looking at all of our programs now. And it will evolve, probably over this year.
NAB is a big organization and I don’t want to get anyone’s expectations raised that it’s going to be better tomorrow, in 24 hours. It’s going to take awhile to work it all out. But my commitment is just looking at every program and service and making sure that it is the maximum value it can be for the member.
Really, the first week on my job, we went through this budget of a $44 million trade association. This is what I told the staff: Every expenditure we make, we need to think about it from the perspective of a small, single radio station owner in Grand Isle, Neb. And if that person thinks it’s a good investment of funds, we should do it. If there’s any question, then we shouldn’t.
We’re going to be doing, for the first time ever, a membership survey in June to get their feedback on our programs. To evaluate how they perceive our programs as a baseline. And it’s my intention every three years to do a similar survey, to demonstrate that we’ve actually added value in our programs. Sometimes we might think that we’re communicating something great, but we might not be. We need to know that.
One of the things that I’ve told all our people here and what owners and group heads will find when they meet me is, I’m not one of these guys that likes it sugar-coated. I like you just to tell me straight up, how you see it, what the truth is, because I can’t determine how to improve things unless I know how people really feel.
RW: And how radio is going to survive…
Rehr: I think we need to ratchet up in telling people all the good stuff we do.
We have to do that and then, finally, we’re going to broaden and expand on the great reputation that NAB has as a grassroots lobbying powerhouse.
We’re in a new competitive playing field. Satellite has lobbyists in DC now. Other technologies have lobbyists in DC and NAB has always been “the big dog.” Now, we’re going to be the big dog with other dogs around us and we’re going to growl. And perhaps bite a whole lot more. Because we need to get the desired result; because the future of the industry is at stake.
RW: We can’t just sit still while other technologies are going forward.
Rehr: I’ve found during our state leadership conference that our people are phenomenally nice, extremely generous and committed. But sometimes that works against you on Capitol Hill. Sometimes you have to be the pesty gnat and tough, and tough-minded.
RW: You’ve been successful raising money at the beer wholesalers association. Do you have plans to have NAB’s Television and Radio Political Action Committee raise more and do more?
Rehr: Yes. The theory at the beer wholesalers, and I think the theory that broadcasters will come to not only accept but really to be committed to, is that we need to elect people to Congress who are either from our industry or who understand our industry or who are passionate about industry.
In my 25 years in Washington, I’ve always found it easier to make the sale, with people on Capitol Hill, who know you and who are for you going in, than trying to find somebody who is, really, your adversary, and explaining to them why they’re wrong. Most people don’t want to admit they’re wrong.
So, over time – and this is not going to be something, again, that happens in one year, two years, one election – but my vision is, over a 10-year period, we will slowly and systematically build better relationships with existing members of Congress, and get involved in races for the House and Senate where we elect people who are pro-broadcaster.