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MINNEAPOLIS — The broadcast industry’s top lobbyist believes that radio provides so much free publicity to the music industry — $2.4 billion a year, according to a new study — that it shouldn’t have to pay to play records.
NAB president and CEO David Rehr delivered a keynote at the Conclave Learning Conference here Friday — one day after the contentious Performance Rights Act sailed through a House subcommittee. He cited the new study by an economic research expert as the latest round in radio’s gunfight with the music industry over proposed legislation that would require terrestrial broadcasters to pay royalties to labels and recording artists when they air their music. Rehr said the $2.4 billion figure doesn’t include the value of ticket giveaways and other on-air promotions.
Expected to reach the larger and more influential Judiciary Committee for consideration in the coming weeks, HR 4789 has become NAB public enemy No. 1, and Rehr used his first Conclave appearance to rally radio against it, encouraging broadcasters to enlist their local representatives in Congress to oppose the legislation introduced by Rep. Howard Berman, D-Calif., in December. The bill “isn’t going anywhere anytime soon,” Rehr told the packed ballroom.
“We’re going to be fighting this for the next four, five, six years,” he said, predicting that it would cost broadcasters $7 billion in fees. “They’re trying to extract money from other industries because they haven’t addressed their own business challenges.”
Rehr also said the radio industry “made a mistake” in not more aggressively fighting new, dramatically higher Internet streaming royalties set by the Copyright Royalty Board.
In a well-received 50-minute speech that was half reality check, half pep rally, Rehr said never before has radio faced so many regulatory issues and so much competition. He spent less time condemning the proposed XM-Sirius satellite radio merger — which FCC chairman Kevin Martin has agreed to back — but still vowed to fight it. And he fired a few shots at the FCC’s proposed rulemaking on localism, which would require broadcasters to have at least one person on-site at a station 24 hours a day, establish permanent community advisory boards and allow public panels to establish quantitative standards for programming. Such requirements “could actually undermine our efforts to serve local communities,” Rehr said. “To have the federal government tell local broadcasters what they need to do every day to serve their communities is offensive and absurd.”
Rehr called on broadcasters to remind people “why they fell in love with radio in the first place and reignite their passion.” Calling radio “a great equalizer and unifier,” Rehr said stations in the coming weeks would receive a set of talking points detailing “what we need to tell people about radio,” as well as commercials to remind listeners why they fell in love with radio.
Part of the Radio 2020 PR campaign introduced in the fall, the spots and messaging are intended to get stations to evangelize radio to listeners, advertisers and other media.
Rehr conceded that radio “may have gotten a little stale over the past few years” and suggested the medium is so pervasive that people take it for granted.
“People want new, unique content and niche channels, and radio must respond,” he said, offering HD radio side channels as part of the solution.
While the NAB, the HD Digital Radio Alliance and HD radio technology provider iBiquity have made progress targeting auto dealers and automakers to install HD radios, Rehr said: “We still have a lot more work to do. We need a lot more receivers. Manufacturers are starting to see that it’s to their benefit that radio is everywhere there is a speaker or headphones.”
Rehr, the former president of the National Beer Wholesalers Assn. who replaced Eddie Fritts at the powerful broadcast lobbyist in December 2005, was greeted with applause when he said: “I hope you’ll join me in being tired of all the critics of radio. Some of you have given your life to radio. It galls me that we allow people to draw us down. Two hundred thirty-five million people listen to us week in and week out. This is a great business.”
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