AUSTIN, TX -- NAB President and CEO David K. Rehr delivered the opening keynote address at the 2008 NAB Radio Show in Austin today. Below is a transcript of his prepared remarks.
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It's great to see all of you here.
We all know that Radio broadcasting is at a very critical juncture.
Never before has our business faced so many challenges - a rapidly changing media landscape that makes us feel unsure and unbalanced, turbulent economic conditions that impact our bottom lines, and regulatory and legislative hurdles that threaten the way we conduct our business.
This is a tough world that radio broadcasters are operating in today. But there's a greater issue that I want to address that's, frankly, more troubling.
In fact, I believe it's something that could possibly jeopardize the future of this entire business. I'm talking about the negativity that's pervading the radio business and threatens to paralyze us.
It's not surprising that some of you may be feeling this pessimism. It's like a dark cloud hanging over our heads. And we feel bombarded by negative - and often false - messages about radio that reinforce these feelings.
We hear that radio is obsolete, that it's not adapting fast enough to the digital age. We hear that listenership and revenues are declining. We hear that people don't value radio as they once did. But what we're not hearing enough are the stories of radio's successes.
And there are many.
Radio connects, informs and inspires an estimated 235 million listeners each week. And what we rarely hear is that number is up 3 million listeners from last year. That's a vast universe that we are touching.
Now I want to share a clip with you, that may send you back a few decades.
That song, "Video Killed the Radio Star," was released in 1979. And it captured what many people were feeling at the time about radio.
Throughout the years, some people thought radio would fade away.
First eight track tapes, then cassettes, then music videos and CDs - every time innovation occurred, the end of radio was predicted. But this song was released almost 30 years ago, and radio is still strong.
Millions of people listen to the radio every single day. People spend more time with radio than on the Internet and reading newspapers. There is an exciting world of opportunity before us. It is the beginning of a new era for radio.
And many of you have already started to embrace the possibilities. But in order for us to move forward and build a successful future we cannot continue to operate as we have in the past. We must stop listening to the negativity and false messages, many of which come from our own people. And we must commit to spreading the positive news about radio.
Because if we don't, we leave a vacuum to be filled by our critics and the negativity that's invading our business will continue to spread like a virus -- infecting everyone.
And the result of this negativity?
The stagnation of the industry and the devaluing of your business. If you can't believe in radio… if you can't believe in all the possibilities and imagine a brighter future, then how can we expect our people - our listeners, our advertisers and our customers - to believe in this great medium?
Right now, radio needs people who believe. And I hope everyone in this room is a believer. We need people who are bold and who will take charge of leading us into the future.
Many of you have said to me that this industry needs leadership that to move forward, someone has to step up -- radio's corporate CEOs, big group executives, small market owners… that someone else needs to go first and all of us will then follow. That we need to let another person take the risk and all of us will wait, assess and explain why it will or won't work.
That thinking is a prescription for defeat. Instead, each and everyone one of us must be a leader. We can't wait for others.
Each and everyone one of us who believes in radio must support each other and our efforts to move this business forward. We all know there are many reasons to believe in radio.
First, technology is opening exciting doors for us. There has been more innovation in radio in the past five years than in the past 50. We've invested millions of dollars in new technology - HD radio and new delivery devices, and we've made huge strides toward improving the quality and diversity of content. We're undertaking an effort to increase the number of FM radio receivers in cell phone handsets.
In fact, a recent NAB study shows this platform could reach an additional 260 million consumers. Let me say that again -- 260 million consumers - there's great opportunity for us to seize.
Another area for growth is HD Radio.
Radio stations are harnessing the power of the latest digital technology to deliver content with superior sound quality and more programming choices. More than 1,700 stations around the country are broadcasting in digital - with the ability to reach over 200 million listeners.
We're working with the HD Digital Radio Alliance to educate the public, manufacturers and the auto industry about the possibilities of HD. We're targeting auto makers and dealers with the message that your car is not "fully equipped" unless it includes an HD Radio.
We've taken the "fully equipped" message to the auto shows in Detroit, New York and Los Angeles. We've launched an aggressive outdoor marketing campaign, using billboards to grab the attention of auto manufacturers driving to and from work in Detroit - and they're listening.
There are amazing possibilities with HD Radio, including more niche channels than ever before - from Latin fusion to underground rock to a psychic channel.
We're also bringing a whole new generation to radio through the iPhone. We're thrilled that the latest iPhone has radio applications, giving consumers a taste of the best that radio has to offer. In fact, AOL Radio powered by CBS is one of the most downloaded applications for the iPhone.
At Apple stores, the iPod radio attachment has been one of the best-selling extras since its debut. People want to use their iPods to access the ultimate playlist… radio.
Starting yesterday, every Microsoft Zune portable media player will let consumers wirelessly download or stream millions of songs on the go. Zune owners will have the ability to tag and purchase songs directly from the radio.
Internet streaming is another area of growth, with more than 4,200 stations already streaming their signals online. And others would like to do it, if it makes economic sense.
That's why NAB has been working to address the outrageous Copyright Royalty Board decision that dramatically increases streaming rates. The Internet is also presenting a new world of revenue possibilities, which we have yet to take full advantage of.
A recent study shows that Web revenues barely account for 2 percent of total company revenues for most radio stations. And yet, all media local online revenues are growing at a phenomenal rate of 50 percent this year. And radio should get its fair share.
We need to invest in our future. That's why we're exploring new opportunities for radio through our technology advocacy program, FASTROAD. This program is playing a key role in exploring, developing and accelerating the adoption of new broadcast technologies and NAB is proud to be at the forefront of new radio technology innovations.
We're looking to the future of radio, which brings me to another reason to be excited - the Radio Heard Here campaign.
The entire industry has united behind an initiative we've put in motion to reignite the passion for radio. One year ago at this very show, we launched a major effort to reinvigorate radio.
The initiative - Radio 2020 - represents our clear vision as an industry for radio's future. In April, we launched the consumer phase of Radio 2020 - called Radio Heard Here. Think of this as radio's version of "Got Milk" or "Beef, it's what's for dinner."
Those iconic campaigns were put in motion because people needed to be reminded of the value of these important products that are too often taken for granted.
Through Radio Heard Here, we're going to change consumers' and advertisers' perception about radio's future.
The effort includes:
We've launched a great Web site for consumers at RadioHeardHere.com, where they can learn more about radio, find the most played songs, see new innovations and listen to great radio commercials.
Last month, each station received talking points and an insider's guide containing everything you need to share about radio's bright future.
You received a print advertising kit and most importantly, you will soon receive radio spots that remind listeners why they fell in love with this great medium.
Let's listen to one now.
When we tested these spots, listeners loved them - especially younger listeners. So far the response to this campaign has been extremely positive. We are arming you with the facts and good news about radio, and we need your help to spread the word about radio's bright future.
If you have to remember four things about radio, remember these:
1) Radio reaches everyone - 93 percent of Americans listen each week.
2) Radio is driving technology. With 1,700 HD stations on the air, more than 4,200 stations streaming online and 13 percent of cell phones now radio capable.
3) Radio offers more choices than ever before. In the last ten years, format variety increased in the top 100 markets. And HD is offering immense opportunity for new and more innovative formats. And it's free.
4) Radio is resilient and growing. Radio's audience has grown 15 percent since 1994. In a time of more media choices in the history of the world, radio is retaining and adding listeners.
We want to repeat these great things about radio with everyone we know. Together, we are going to reinvigorate this great business and make radio new again.
We are also being aggressive on your behalf in Washington. Here are just a few highlights of where we stand.
First, let's talk about the performance tax. Early in the debate the record labels told Congress this was a performance "right" for artists.
But we have been successful in making policymakers understand what this is really about - a tax on local radio stations that would benefit foreign-owned record labels. The chorus of lawmakers recognizing the immense promotional value provided by local radio airplay grows louder with each passing day.
We now have the support of 226 members of the House of Representatives - the majority - on the Local Radio Freedom Act - the anti-performance tax resolution.
Compare that to the number of cosponsors on the other side - 19. And we have provided members of Congress and their staff data demonstrating how local radio airplay generates sales for artists and labels.
We have released a study that suggests the radio industry provides anywhere from $1.5 to $2.4 billion in free promotional value to the artists and their labels each year. And it doesn't even include the billions generated in our promotion of concerts, live events and other venues.
Momentum is on our side.
But we must keep the pressure on and continue to mobilize around this issue. This will be a multi-year effort by the record labels.
And it will be hard fought.
Second, let's talk about the FCC's misguided attempt at imposing so-called localism regulations on us. Despite having jettisoned these old localism rules in the eighties, the FCC is now proposing to bring them back.
Just recently, we've seen how broadcasters have prepared for and covered the recent tropical storms and hurricanes that have hit the gulf and east coasts.
We applaud the Texas broadcasters for their commitment to covering Hurricane Ike. You are a lifeline to your communities, providing them with lifesaving emergency and relief information. We thank you for what you do every day to serve your listeners and viewers and for the lives you save.
Witnessing all that broadcasters do shows how localism requirements are unnecessary, oppressive and built on an outdated regulatory mindset.
Requirements, like the 24/7 manning of broadcast facilities and mandating a main studio in the city of license, ignore the realities of the broadcasting business and technology. In fact, these requirements would have the opposite effect on broadcasters' efforts to serve their local communities, especially small market radio.
Collectively, broadcasters are the number one provider of public service. And we don't need the government to step in to tell us how. NAB is driving that message home in Washington each and every day.
Let me give a few examples.
And there will be more to come.
At an event on Capitol Hill in July, we unveiled the 2008 National Report on Broadcasters' Community Service, featuring a new Web site - BroadcastPublicService.org.
The site highlights state and national statistics and stories recounting broadcasters' unrivalled public service. We won't let down our guard in this fight. And with your help, we will be successful.
We're engaged in more issues than ever before, and we're on the offensive.
Ladies and gentlemen, now is the time for us to embrace technology and seize all the amazing opportunities it presents. And we can't let this moment pass.
If we join together as leaders and put aside our personal agendas, we will build a successful and vibrant future for radio.
Teddy Roosevelt once said, "It is not the critic who counts, not the man who points out how the strong man stumbled, or where the doer of deeds could have done better. The credit belongs to the man who is actually in the arena; whose face is marred by the dust and sweat and blood; who strives valiantly…"
Each of us must be that man or woman in the arena. We must ignore our detractors and we must be persistent in our cause. We must unite behind consistent messages and relentlessly work to spread the positive news about radio. And though we will occasionally face setbacks, we must keep our eye on tomorrow.
Let us fight back the temptation to look to the past and doubt what's new. Let us instead look forward with optimism. Let us stand together in the arena. With courage, conviction and belief we will create an unstoppable tomorrow.
God bless you, our great business, and this great nation.
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About The NAB Radio Show
The NAB Radio Show is the largest annual convention for radio. This year's show, Sep. 17- 19 in Austin, delivers a one-of-a-kind networking opportunity for station professionals representing all format and market sizes and is co-located with the R&R Convention. More information about The NAB Radio Show is available at www.nabradioshow.com.
The National Association of Broadcasters is a trade association that advocates on behalf of more than 8,300 free, local radio and television stations and also broadcast networks before Congress, the Federal Communications Commission and the Courts. Information about NAB can be found at www.nab.org.