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Rehr: Radio Not Afraid to Compete - Radio World

Rehr: Radio Not Afraid to Compete

The following is an excerpt from new NAB President/CEO David K. Rehr's address at NAB2006's All Industry Opening session in Las Vegas.
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The following is an excerpt from new NAB President/CEO David K. Rehr's address at NAB2006's All Industry Opening session in Las Vegas.

Thank you and good morning. I am delighted to address my first NAB convention. And I am honored to have been selected as your president.

Today, I don't want to relive broadcasting's past glories, mourn its past defeats or wade through a list of issues facing the industry. I want to talk about one thing - and that is where the NAB needs to go in the future.

I believe the NAB must move from an organization that is perceived as being on defense, to one that is on offense. We cannot afford to be an organization that is perceived as protecting the status quo, but rather one that embraces change.

Ladies and gentlemen, my sense is that broadcasting has been defensive in its thinking for too long. We can transform that mentality - and we can start today.

Confidence, not doubt or complaint, should set the tone as we move forward. Certainly we have challenges, but broadcasting has a solid base of strength on which to support the dazzling new possibilities ahead. We should not forget those strengths.

Broadcasting still has the eyeballs and the eardrums.

Remodeling the future

Satellite radio has supposedly 10 million subscribers total. But 260 million people listened to broadcast radio last week alone. Furthermore, satellite radio lost about a billion dollars last year. Its business model is bankrupt. And this is even before our own digital HD Radio has kicked in.

Our localism, our connection to the community, is also an advantage - an irreplaceable advantage. Helping the community is obviously a social good. Helping the community is also broadcasting's business plan and, frankly, it is our brand. We must continue to be evangelical about our community service and about our community content.

Now, upon the solid foundation that we have built, digital TV and digital radio are about to reinvent our industry. We are about to ride a new wave of technology that will take us places we have never been before.

There are breathtaking changes taking place in broadcasting, and across all electronic media. Broadcasters, cable, satellite - and our advertisers - are all part of a personal media revolution. This is the day of consumer convenience and consumer choice. For the first time in the history of media, the consumer is completely in charge.

Broadcasters have tremendous reason to feel excited about this future.

Now, I realize getting to a new model for the future is easier said than done. Words are cheap. Technology is expensive. Change is hard. And, yes, there are issues to be resolved: multicast carriage, compensation for content, leveling the playing field with satellite radio. But I know this: the future is always on offense, and those who play defense will be left behind.

Let me give you five areas where we can go on offense immediately.

One: Our future hinges on our ability to exploit every new technology, on every new platform.

Yes, content is still king - but distribution is key. That's why broadcasters must move quickly to increase the number of distribution channels and platforms for our content. Broadcast signals must be everywhere in the culture. Our signals must go everywhere, to everyone, through every device. Our future is a broadcast signal on every gadget - cellphones, laptops, PDAs - and of course multichannels of DTV and digital radio.

As I've been reminding my friends in new media, "TV and radio were wireless before it was cool!" And that coolness quotient is set to explode.

Apple i-Podders can now purchase video programs over the Internet, and watch them on a new class of i-Pods. This is part of our future.

Motorola's iRadio is merging the cell phone, the car radio and the MP3 player, while M-Spot offers streaming music over its phones. This, too, is part of our future.

Verizon is going to pay CBS owned-and-operated stations for the right to carry its signals on Verizon's new home TV service. This is part of our future.

FM adaptors for i-Pods are in the marketplace because listeners want local content and connection. This, too, is part of our future.

Companies with new media devices on the drawing board are taking a much closer look at the value of local radio content.

Every new device is a potential user of our content. And, every new stream of programming is potentially a new source of revenue. We want to be on new devices that haven't even been brought to market yet. Yes, the copyright problems will be worked out. Yes, the technology will be worked out. Yes, the business model will be worked out. What is most immediate and important is our full embrace of this future.

Let's face it. Local radio is a basic necessity. New media distribution technologies - and new devices used for communication or entertainment - will need radio. Every electronic device you carry, or are in near proximity to, should have the ability to pick up local radio signals. It's a lifeline, it's a friend, it's the primary media choice of consumers in the present and for the future.

I believe we will deliver great content to a myriad of devices in the years ahead. And what will be delivered to us in turn is our future.

Competition means choices

Two: We must promote the benefits of digital television and digital radio.

On the radio side, we must show consumers the exciting possibilities of HD digital radio. Radio is on the verge of its greatest transformation in history. Excitement is in the air.

Seven hundred digital radio stations are bringing their communities improved quality and greater choice. Thousands more are committed to joining this effort. Many stations are rolling out digital multicast or "side channels" of new formats and creative local content.

Our radio companies are undertaking a massive consumer education campaign, shouting the benefits of digital radio to consumers, car manufacturers and advertisers.

NAB itself has undertaken two major advertising campaigns to promote the overall vibrancy of free, over-the-air radio. But now, we must promote HD digital radio - and get more digital radio receivers into the marketplace.

It is our job, and we need to get busy.

Three: We must promote greater competition among cable, satellite and telecom companies. Competition means consumers will have more choices. And it also means we will have more revenue streams from the content we provide.

NAB believes the telephone companies should be able to compete fairly with cable in offering broadcast programming. To be a competitive player, the telephone companies will have to offer local content. Local content is us. And, we will be compensated for that.

Satellite and telephone companies already recognize that they must compensate broadcasters; eventually, so must cable, especially as its own competitive position weakens. Frankly, it is only a matter of time. Broadcast programs are the biggest choice by far of the American viewing audience and compensation for that cannot be ignored or denied.

Another word about competition, this time [about] radio: We are not afraid of competition to free over-the-air radio.

A new study from Arbitron and Edison Media Research finds that even with the availability of Internet and satellite radio, consumers are not cutting back on time spent listening to local radio.

Radio's history is one of meeting new competition head on and coming out on top. That hasn't changed. To our competitors, I say, "We will beat you!" All we seek is a level playing field.

Personal responsibility

Four: Rather than being on defense about indecency, NAB is taking a leading role in empowering parents to control what comes into their homes.

We have joined with the cable industry, the movie industry, the TV set manufacturers, the networks and others in an unprecedented $300 million Ad Council campaign. We intend to reach every home in America. Our purpose is to advance parental use of control mechanisms and the TV ratings system. Unfortunately, most of the attention on decency issues focuses on broadcast TV and radio.

On the radio side, the FCC needs to pay more attention to the obscenity and vulgarity that has found its home on satellite radio.

The vast totality of our broadcast media serves the American people well. And we have no objection to playing by the decency rules. But we have to know what they are. And unfortunately, the FCC's recent indecency fines did little to clarify these rules. We need clearer guidance from the FCC and Congress on where the lines are drawn.

We also cannot forget the importance of the First Amendment in this national debate. Broadcasters feel strongly about free speech, and we will defend it whole-heartedly. But no one should imply that protecting the First Amendment is tantamount to promoting the right to be obscene.

When it comes to the issue of indecency, the NAB is going to play a leading role to maximize one of America's most fundamental axioms - the need for personal responsibility. We will empower people to make good choices based upon their own tastes and values.

Finally, point number five deals with how the NAB works with the FCC and Congress. We are moving away from using the word "lobbyist," which has been defensive and reactive. Instead, we are adopting the word "advocacy," which conveys positive offense in framing the debate, and thus the future. It is only a change in wording, yes, but it reflects a larger change in attitude.

The NAB needs you to be advocates for our industry, not just in Washington, but at home. We intend to step up our grassroots activism of local broadcasters to educate members of Congress, the FCC and their staffs about the realities of our business.

When it comes to educating lawmakers, no association in Washington can do this alone. Being an advocate also requires us to be more involved in electing members of Congress who oversee the future of our business. We must have more pro-broadcaster members of Congress. In fact, we must elect more broadcasters to Congress!

It is with this goal in mind that I encourage you to support the NAB Political Action committee. It is unfortunate that money has become so important in elections, but it is a fact of life. To be successful, we must be financially committed to those legislators who understand and support the value of broadcasting. So we hope, and I hope, you will support us in this effort.

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