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Smith: Time to Rethink Media Cross-Ownership Restrictions

NAB leader discusses performance royalties, FM chips, media ownership with Jim Bohannon

NAB President/CEO Gordon Smith says it’s time to rethink the restrictions on media cross-ownership.

Speaking on the Jim Bohannon Radio Show, Smith called the prohibition of one entity owning both a newspaper/broadcast station or both TV-radio properties in the same market “antiquated.”

We’ve reported the FCC chairman has proposed to his colleagues eliminating that ban.

Shifting to the performance royalty issue for music streaming, Smith told the host of the Dial Global-syndicated program that “We maintain there is still a promotional value of radio playing their music. You’d sell no music if you didn’t have radio.”

He estimates not more than a third of the estimated 15,000 radio stations nationwide stream because music royalty costs are so high, and over, time that “whole segment will plateau” if radio has to pay a performance fee. Some members of Congress brought up possibly closing radio’s exemption in a performance royalty hearing this week.

NAB continues to press the cellphone carriers and handset manufacturers to activate or embed an FM chip in their devices. Smith told Bohannon there’s a public service aspect to the chip issue: “People love Pandora but they didn’t turn to Pandora during the storm,” referring to Hurricane Sandy. “They tuned to their local radio station.”

Smith reiterated the NAB has chosen not to ask for a congressional mandate of the chip, but hopes to persuade the phones companies having a radio station available on a phone is a good use of spectrum. He thinks “it will happen.”