Farber, Smith address Radio Show
RAB President/CEO Erica Farber says that radio has a lot of audience love to build on, and is using the latest technologies to do just that with an eye to the future. And Gordon Smith of NAB has a few things to say as well. Here are their complete remarks:
Hello everyone, and welcome to this year’s Radio Show. It’s been an awesome year and only the pit crews at the Indy 500 are more coordinated than we are. Special thanks are owed to our partners over at the NAB, Gordon Smith, John David and everyone else who worked so hard to pull it off this year.
None of us would even be here, of course, were it not for the advertisers, who continue to use our medium to underscore awareness and drive action and sales. We feel fortunate to be partnered with a group of advertisers who are so committed to their own goals and so supportive of ours.
In a little while Bob Hoffman is going to give a talk about B.S. As an advertising guru — some say legend — he’s entitled. It’s a provocative stance, and I’m sure you’re all looking forward to it as much as I am. Before that, though, I want to tell you a love story.
There was a period a few years ago — let’s call it the Dark Times — when people enjoyed heralding the death of radio. The world is all new, they cried, and radio is an old medium. PowerPoint decks featured numerous pictures of 1950s families sitting around a giant wireless — remember the old Sylvanias — tuning into the Lone Ranger while wearing suits and dresses and hats inside the house. Even the children.
Those of us who loved radio were worried. Was our old flame losing its luster? Would we be able to keep the magic alive? Fortunately, it turned out the reports of our death were slightly exaggerated, because we were not alone in our affection for radio.
In fact, far from it.
People love radio. They loved it in the 50s and they love it now. They love music, they love news, they love the social nature of radio, the personalities, the callers, the discussions and even the ads. The good ones, anyway. 244 million people tune in every week, most for more than a couple hours a day.
It’s still the number one way people listen to music. In fact, only a few days ago the Wall Street Journal published a story discussing the fact that over 86% of Americans still listen to radio while driving, way more than any other medium. I’ll happily agree with them radio remains “the king of the road.”
In another recently released study, over 70% of respondents described radio personalities as friends who they would ‘truly miss if they were gone’.
Sweet, right? And more than sweet. Powerful.
New technology has allowed our listeners to fall even more deeply in love with radio. Now they can text or tweet or follow or ‘like’ their favorite stations, or personalities. They email, they comment, they interact. This is not just dating anymore, people. This is marriage.
And it isn’t just love that makes the future of radio secure. It’s also a deep and abiding affection for the technology of radio. Let’s face it; we’ve always been a little bit geeky. From hand built crystal sets to transistors to digital, it’s all just radio to us. While other industries seemed to scramble when new technology changed their playing field, we just saw more room to play.
And right now digital radio is the best game in town. It’s our fastest growing revenue sector: $889 million dollars last year, and up 12% for the first half of this year. There are now over 23 million HD receivers in market, with 2300 stations broadcasting, and the technology is improving and developing every day. Currently, 35 automakers are shipping vehicles equipped with HD Radio Technology, and we all know it’s only a matter of time before real time traffic and data are part of every in-dash radio experience. Cover art, song tagging… all coming soon to a car near you.
And once the drive is over, you can take it with you. NextRadio has well over 850 thousand downloads, and gets a 4 out of 5 rating in the Google Play store. Users have listened to over 10,300 different FM stations wherever they go, without dipping into their data plans or incurring charges. In fact, we’re at nearly 1.1million hours of listening — a monthly increase of over 23 percent from last month. There are currently 27 FM enabled devices with NextRadio available…and that number just continues to grow. Incredible. The comments in the app store make it clear — radio fans are happy to take their passion to go, and now they’ll never be lonely again.
While we all know that digital is radio’s new frontier, we have some work to do. Our trade association partners at the IAB just released a Digital Audio Ad Serving Template and it’s open for public comment. I encourage everyone to review this document, discuss it with your digital teams, understand the implications to your business and share your opinions. As is always the case in a love story, there are new things to learn and adjustments to be made. This will only help us grow to deliver what our video counterparts already do and it will strengthen our relationships and partnerships with advertisers.
So who’s bringing the love this year? Some advertisers stand out. Automotive continues to be our number one category, spending more than numbers two and three combined. Research shows people are keeping their cars longer, so more maintenance — auto parts and service companies increased their radio spend 14% this quarter. And for those who are looking for a new car, radio continues to be an important influencer in choosing where to buy it. Dealers and their vehicle brands have always depended on radio and we’re happy to support them.
This past second quarter, political advertising was gearing up, as various states held primaries and contests on state and local issues. Candidate spending was the highest category, with Issue spots close behind. As general election races heat up, we anticipate increased spending in the next two months.
Spending in the beverage category was down a little bit, despite the hot summer, although Coca-Cola continues to be one of our BFFs, spending an increased 21% this quarter. Charitable, religious and non-profit advertising also increased over 10% — non-profits have always seen radio as an excellent driver to action and donation, and that’s something we can all feel good about. Our number three category for the first half was communications and cellular, up a little over 6%.
Generally spot spending was down a little at the half-way mark, although that 3% dip was more than offset by an increase of 12% and 15% in off-air and digital spending. Historically, radio spending increases in the third and fourth quarter, so we’re hoping for an overall improvement by the end of the year. And as we heard from Allstate at lunch today, smart advertisers still regard radio as their workhorse: a medium that takes the brand awareness built by national campaigns, and actually moves people to measurable, locally targeted action. If I can stretch my metaphor a little, you might fall in love with a movie star… but it’s the boy next door who actually takes you to the prom.
But while this is a love story, it’s not a total fairy tale. As with any long-term relationship, we’ve had our ups and downs. We’ve worried about the future. We’ve wondered if we were headed in the right direction. But we never stopped working at it, together, and we can feel the excitement coming back. We’ve got a little more spring in our step these days, we’re proud to say we stayed the course, and the future’s looking pretty awesome.
We love radio. And together we’re going to live happily ever after.
Thank you and welcome to the Radio Show.
I want to thank Kim and the entire Radio Show Steering Committee for their leadership in delivering, once again, a tremendous event that showcases the vibrancy of radio.
Let me also extend my gratitude to Erica Farber and the RAB for their great partnership in producing this wonderful event.
And I want to thank all of you for being here… it is critical that we come together to address the issues that impact radio’s future.
Five years ago, almost to this day, I stood before you as the new president and CEO of NAB, eager to learn more about the broadcasting business that I had long admired as a public servant.
I recall sitting before the hiring committee and being asked this question: “What does it mean to have the soul of a broadcaster?”
I remember answering the best I could, as someone who had experience delving into the policy issues that affected broadcasters, and as a television viewer and radio listener.
Of course, I knew about the amazing public service that broadcasters provided to communities…About the way they delivered the local news, emergency updates and unparalleled entertainment choices.
I knew about the way broadcasters mobilized to provide a lifeline to their communities during times of disaster… when a tornado or an earthquake struck…
But what I didn’t fully grasp at the time was their passion… dedication… and determination… to serve their communities… every… single… day.
I must not have answered that question too badly, since they still hired me for the job.
Five years later, my first impression of this business has expanded exponentially.
And many times since that first day on the job, I have stood on a stage and talked about broadcasters’ incredible service.
That question, “What does it mean to have the soul of a broadcaster?,” means so much more than I realized back then.
For deep in the soul of broadcasters is an unrelenting commitment to always be there for your communities… to be connected to your listeners… to inform them, to educate them… to help them.
It’s part of who you are.
And this deep-rooted commitment manifests itself in many ways… every day. You quickly respond to emergencies to keep your listeners safe and help them stay calm.
Like recently in the San Francisco area when radio stations jumped into action to report every detail of the earthquake that struck, and to take calls from listeners who were eager to share information.
KCBS went commercial-free for hours with news coverage, and sister station KPIX-TV simulcast its coverage.
And just like these two stations, you are getting involved and raising awareness of the issues that impact your communities.
Like in Chicago when 15 radio stations partnered with the city and the mayor to launch an anti-violence campaign to promote safety in local communities and reduce gun violence.
And yes, you are there when the power goes out… when storms demolish homes… when other mediums are down, you are always on… but it’s incredibly important to also remember the many invaluable ways you are there for your listeners every day.
Your communities turn on the radio to find out what the weather is like before heading to work… to learn what’s happening in their part of the city… or to listen to the music that adds joy to their day.
They listen with open ears and open hearts when we encourage them to participate in coat and food drives, or to donate to a charity.
These past five years have been an incredible privilege for me…it is an honor making sure policymakers and the rest of America truly understand the many ways you give back.
Back in Washington, D.C., there are some challenges that could impact your ability to serve your local communities.
Broadcasters have demonstrated success in educating members of Congress about the consequences of a new performance tax, which would harm radio stations and put local jobs at risk.
As you well know, this is about artists and record labels insisting we pay them for the airplay they eagerly ask us to play.
There are now more than 230 bipartisan cosponsors of the Local Radio Freedom Act in the House – a majority large enough to block any performance tax legislation.
Though we’ve been successful thus far, it doesn’t mean we can let down our guard.
The House and Senate has introduced legislation that aims to increase the rates that songwriters are paid when their music is played or streamed.
And we can expect the giant record labels to keep coming after radio as their business models continue to deteriorate.
So, we must remain ever vigilant and involved. We must continue to gain support for our anti-performance tax resolution. Our success depends on our unity, our engagement and our activism.
We’re also working to educate the Department of Justice as it reviews the consent decrees governing our friends at ASCAP and BMI. NAB and our industry’s music licensing committees filed comments to inform that process.
We noted that the consent decrees provide important protections against the inherently anti-competitive features of performance rights organizations’ licensing.
On the issue of streaming fees, NAB is getting ready to go head-to-head with the record labels at the Copyright Royalty Board.
The CRB resets the rate for the digital performance right in music every five years and the current rates must be reset in 2015.
We are working hard to convince the CRB that they should set the rate at a level that encourages broadcasters to stream – that can be a win for everyone who loves…makes… or plays music.
We are also ensuring your voices are heard at the FCC. Recently, the FCC recently asked for input on whether it should make radio stations upload your public files to a central data base at the Commission.
TV stations already have to do this. It is still early in the process.
NAB has explained to the Commission that it is likely to be much more difficult, especially for small radio stations, to upload and continually update the public file.
We will keep you informed as this continues to develop.
As your advocate in Washington, we’re doing all we can to ensure a bright future for radio.
But we are also stronger when we speak with a unified voice – as we so clearly demonstrated during our united front against a performance tax a few years ago.
You can help amplify our voices in Washington by joining us. There is much at stake for radio if we don’t work in unity.
Stop by NAB’s Membership booth in The Hive to become an NAB member, if you aren’t already.
We must also think about our future… what do we want to be five… 10… 20 years from now?
Despite all the competition for consumers’ attention – from the Internet, personal listening devices… and other emerging technologies… radio’s brightest days are ahead.
We should be bullish about radio’s future. Why? …Because no other medium has what broadcasting has – its connection to local communities.
Our challenge is to now take broadcasters’ commitment to localism and to expand that to other platforms that will continue to build a strong future for radio.
To that end, we are continuing our support of the expansion of NextRadio, the only app currently providing listeners with a hybrid FM experience on their smartphones.
This technology is the result of leaders in the radio business and Sprint working together to provide listeners with a broadcast radio experience that is dependable in times of emergency and still provides the interactivity listeners seek.
We urge you to learn more about how your station can deliver the hybrid FM experience to your listeners through the NextRadio app.
We are also participating in the FCC’s AM revitalization proceeding, and through our technology arm, NAB Labs, we are leading the industry in testing the all-digital mode of iBiquity’s AM digital radio system.
We have now conducted field tests of this system at seven different stations and are conducting lab testing as well. The results are encouraging for AM, so stay tuned.
Let’s continue to expand our definition of what “radio” is and the ways we can continue to build on radio’s heritage of service.
New technologies spring up every day and they can reshape how consumers live and interact… but none of these technologies will ever have what radio has – signals that deliver the best, most reliable services and entertainment, free of charge, to every person… no matter where they are.
It has been a privilege to work with you and fight for your ability to be there for your communities every single day. I can now say five years later, I truly know what it means to have the soul of a broadcaster.
It is the soul of a public servant.