Addressing the 2012 Radio Show in Dallas, NAB President/CEO Gordon Smith pressed the case for a radio chip in cell phones and said he was watching with interest the effects of the deal between Clear Channel and Big Machine on the royalty debate.
He cited the critically important work done by broadcasters during hurricanes and other natural and manmade disasters, and pointed out how valuable it would be for citizens to be able to tap into radio signals on their cell phones, delivered on the one-to-many model, when the device’s telephone function is rendered useless by the lack of spectrum capacity to support the one-to-one model it uses.
Smith noted that the Clear Channel/Big Machine deal may point the way to a solution for royalty and streaming issues. In general, he advocated bold decisions as radio moves into the future.
Here are his full remarks:
Thank you, Dan.
We appreciate your leadership on the Radio Show Steering Committee.
You and the team have produced a remarkable event that showcases the very best in radio.
We are also pleased to partner once again with RAB to host the Radio Show.
I want to extend my sincere thanks to Erica Farber.
RAB has found a strong leader in Erica to guide its future, and I look forward to working with her and RAB to help radio broadcasters thrive well into the future.
I want to welcome all of you to Texas.
But before I begin, I want to acknowledge the recent passing of a good friend to many in the broadcasting business and a legend in this state.
As the longtime president of the Texas Association of Broadcasters, Ann Arnold was a passionate and fearless advocate for radio and television.
I know she would have loved to be with us today; she will be missed.
But we are thankful that you all are here.
Being in Texas is exciting for me.
You may know that my mother’s maiden name was Udall.
We have a saying in the Udall family that ties us to Texas.
It goes… there are more Udalls in Arizona than u’alls in Texas.
As several of you know, I’m a history buff, and being here I can’t help but be reminded of the battle of the Alamo.
One of the central figures of this historical event was Davey Crockett.
You may remember him from your childhood as the “King of the Wild Frontier.”
On television, one popular show portrayed him as a frontiersman with a raccoon hat on his head and a rifle in his hand.
But he was a real person… in fact, he was a former member of Congress from the great state of Tennessee.
In his 1834 autobiography, he said of his re-election, “I told the people of my district that I would serve them as faithfully as I had done; but if not… you may all go to hell, and I will go to Texas.”
Well, the people spoke, and he packed his bags for Texas.
I can relate to that feeling.
Like Davey, the people from Oregon in my last Senate race also spoke… and now here I am with all of you fine people.
Not that I’m complaining.
I now have one of the greatest jobs in the world.
Davey Crockett was killed at the Battle of the Alamo in 1836, but his legend endures throughout history as one of the greatest American folk heroes of all time.
Davey fought alongside courageous men in the battle for Texas’ independence.
And in the spirit of their brave fight, we can find renewed strength right here at the Radio Show.
For radio broadcasters continually display courage against many challenges – whether they are storms, disasters or economic uncertainty.
Today, I want to talk about where we see radio heading in the future.
Of course it’s not an easy road, but with courage and conviction, we can map a successful course.
When I think about radio, the word “courage” comes to mind.
As you know so well, time and time again, radio broadcasters demonstrate their courage in many invaluable ways.
Just several weeks ago, Hurricane Isaac struck the Gulf region, bringing powerful winds and pounding rain to communities in Florida, Louisiana and Mississippi.
Broadcasters quickly stepped in, fulfilling their role as first informers… heeding warnings and providing non-stop coverage of the hurricane’s path.
Residents on the Gulf coast were fortunate… it could have been much worse…but seven years after Hurricane Katrina, it was a fresh reminder of the lifeline role of local broadcasting.
And what better way to inform people of pending danger than through built in radio in their mobile phones?
When phone service and the Internet go down because of capacity constraints – as we saw during Hurricane Katrina – radio stays on…radio is still there.
Now, the wireless carriers are trying to do their part.
They have implemented a text message-based wireless emergency alert system to inform people during times of crisis.
But its ability is limited.
Let’s take a look at an example of a wireless emergency alert message.
They only have 90 characters to share critical information with the public, and as you can see, they are wise to direct their customers to turn to local media for the full story.
We are natural partners, and we must work together.
Radio can supplement these emergency alert efforts, since our medium doesn’t have these type of limitations.
Recently, NAB’s technology experts set out to find out how many smartphones in today’s market come equipped with radio chips.
They discovered that all of the top 10 best-selling smartphones in the U.S. were already equipped with radio chips.
But, unfortunately, none of them had the chip activated.
Now some might see this as terrible news.
But I’m an optimist.
I think this information simply proves what an easy lift it would be for the wireless carriers to activate this service for the safety and convenience of their customers.
These phones represent more than 70 percent of the smartphones sold during the first quarter of this year – that’s 17 million units.
Activating these radio chips presents huge opportunities for listeners, wireless companies and broadcasters alike.
We just need to continue educating our friends in the wireless industry about the benefits of providing their customers with built-in radio.
The bottom line is: radio provides a great service to the public … and we must continue to inform all Americans about the facts.
We have a great story to tell:
a.. Radio reaches more than 242 million American listeners each week – and that number continues to grow each year.
b.. 81% of Americans surveyed want free, local radio as a feature.
c.. This technology creates revenue opportunities for wireless carriers, broadcasters and businesses, allowing targeted advertising that enables more interaction with consumers.
d.. Unlike streaming, built-in radio off-loads traffic from congested wireless systems, which can be critical in times of emergency.
After all, no other form of communication can match broadcasting’s one-to-everyone transmission architecture… there is no better reliable resource for information during times of crisis than broadcast stations.
We know that our local communities depend on their stations to provide them with the news, emergency information and entertainment they rely on each day.
Broadcasters take this responsibility very seriously… this is the heart of localism.
But how do we ensure a strong, vibrant future for the business so that radio can continue to successfully serve America’s local communities?
I believe radio’s future hinges on innovation and our definition of the word “future.”
We must have the courage to face our future head on and ask ourselves, “What do we want to be?”
Is it terrestrial, or streaming or both?
If both, how do we shape a strong future for both revenue streams?
Earlier this year, one of the largest radio companies bet on the future of streaming.
Some say this was a risky move.
Others say it was bold and forward looking.
I believe each company must evaluate its future and make its own bold decisions.
Indeed, the agreement between Clear Channel and Big Machine may ultimately answer many questions about whether the future is streaming.
But we can all agree that radio’s future lies in being incorporated into every new device.
And uniting in our advocacy will ensure we achieve that goal.
Broadcasters showed courage in uniting against performance tax legislation two years ago.
When government decisions threaten radio’s future and broadcasters’ ability to serve listeners, we must continue to speak with one voice and unite when the need arises.
In closing, I want to leave you with some tough questions to think about.
Are you preparing for a future where the marketplace is becoming increasingly competitive and unpredictable?
How can radio continually evolve to respond to consumers’ needs?
I challenge you to face the future, to find the right path for radio.
And whatever that path may be, NAB will be there to advocate on your behalf to ensure a robust future for generations to come.