PHILADELPHIA --NAB Radio Board Chair Charles Warfield, president and Chief Operating Officer of ICBC Broadcast Holdings, spoke during the 2009 NAB Radio Show Opening Address held at the Pennsylvania Convention Center. Below is a transcript of his remarks.
Welcome to my hometown, Philadelphia, and welcome to the 2009 Radio Show. We have a great show in store for you. You will have the opportunity to network with your peers, learn new business strategies and discover emerging technologies. I want to thank you for your support and attendance, especially in this difficult economy.
This year our show has the potential to make more impact than ever before, and your presence makes a big difference. I want to acknowledge the Radio Show steering committee, especially the chair of the committee, Joe Schwartz, and the subcommittee chairs: John Dimick, John Beck and Zoe Burdine-Fly. They have put together a high quality program, and we thank them for their time and commitment to producing this great event. I want to also recognize the members of NAB's Radio Executive Committee and Board of Directors. We also thank them for being here and for their leadership. Finally, I want to also thank the NAB staff who work hard and put in many hours to organize the Radio Show.
Today, I'd like to take some time to talk about a major challenge we're facing back in Washington, D.C., as well as some of the opportunities we’re seizing.
Every radio station, large and small – from Philadelphia to Reno – is facing a fight for survival in the battle over the performance tax. For more than 80 years, radio and the recording industry have enjoyed a mutually beneficial relationship. Free airplay for free promotion WORKS. In fact, a recent study shows that the radio industry generates $1.5 to $2.4 billion dollars in free promotional value for the labels and artists each year.
But the labels – like all of us – are struggling in this economy. They are in a weakened position because they failed to adjust to the digital music era and now they want to impose a fee – what we call a tax – on local radio stations.
There's no question that it would financially hurt local radio stations, stifle new artists and harm the listening public who rely on free local radio. We've been successful so far opposing the record labels.
More than 250 members of the House and 25 senators have expressed their support for the Local Radio Freedom Act, a resolution that emphatically opposes the imposition of any new tax, fee or other charge on local radio stations for music broadcast over the air. Strong grassroots engagement, state broadcast associations, NAB staff in Washington and radio broadcasters have kept the momentum going strong.
But our work is not finished.
NAB is continuing to educate members of Congress, the media and the public about the harm a performance tax would inflict on local radio. We've also launched a multiplatform advertising campaign to inform the public of the issue. And the No Performance Tax.org Web site is designed for you to educate both your listeners and lawmakers on the negative impacts of a performance tax.
All of us in this room understand the importance of this issue and your continuing involvement is critical. We must continue to gain support on our anti-performance tax resolution. Our success depends on our engagement and activism. Our future depends on it.
While NAB is advocating on your behalf Washington, we're also driving the rollout of innovative platforms to build a strong future for radio. Two years ago, NAB launched Radio 2020, an initiative to remind the public, marketing community and electronics industry of the impact of radio on our daily lives.
Radio Heard Here is the consumer phase of Radio 2020. The campaign is wide-ranging – from social marketing to an on-air campaign – designed to engage everyone that radio touches. We are reminding consumers of the important role radio plays in their everyday lives and turning passive listeners into active radio enthusiasts.
Make sure you stop by the Radio Heard Here lounge or check out our Web site, Radio Heard Here.com, for all of the tools you need to spread the good news about radio, including radio spots.
Through Radio Heard Here, we're also reminding listeners about the great choices that radio offers. HD Radio delivers more content choices with crystal-clear digital sound. NAB continues to work alongside the HD Digital Radio Alliance to educate the public, manufacturers and the auto industry about the great benefits of HD Radio. There are amazing possibilities with HD Radio. Microsoft recently unveiled Zune HD, which comes equipped with an HD Radio feature. We must continue to push more receivers into the marketplace so listeners can enjoy the benefits of HD.
Internet streaming is another way of bringing radio to the listeners across multiple platforms. Earlier this year, NAB negotiated a deal with Sound Exchange to ensure radio stations can continue to stream online, and more stations can begin to stream in the future. The deal provides more reasonable streaming rates than were originally set by the Copyright Royalty Board.
It also ensures certainty of costs through 2015.
But online listening isn't the only way radio fans are enjoying new choices.
Another exciting radio initiative we're working on is increasing the number of FM radios in mobile phones. NAB's technology advocacy program, FASTROAD, released a report showing that cell phone service providers, radio broadcasters and handset manufacturers all stand to benefit from the expansion of FM-capable cell phones. NAB has been reaching out to U.S. mobile network operators to discuss the advantages of including FM radios in cell phones. The benefits are huge. FM receivers could provide another revenue stream for mobile network providers as well as broadcasters. Through the Radio Data System – or RDS, a song heard on the FM radio in the handset can be "tagged" for later purchase. Integrated FM receivers also give mobile phone users access to the Emergency Alert System.
We're also working to get radio on other portable devices. Just two weeks ago, Apple announced its first portable product with built-in FM radio. And it incorporates iTunes tagging. This is a great breakthrough and we look forward to the success of this feature on the nano leading to the addition of radio on other iPod models and on the iPhone.
During this time of transition, NAB has remained strong and focused, advocating on your behalf. And we're so pleased to finally announce our new president and CEO, Senator Gordon Smith, whom you’ll be meeting shortly. With our new leader, we remain committed to providing our members with the best service and value possible.
But our success in Washington depends largely on you – the involvement of our local broadcasters. It's been your grassroots involvement that has led to the growing support of local radio with the tax issue. We need your continued help in educating policymakers about the issues we care about, and we thank you for standing strong with NAB even in a very difficult economy and operating environment. Though we face challenges, both with the economy and in Washington, we are in the midst of a dynamic period, ripe with opportunity.
And we are realizing those opportunities.
We're embracing new technologies and adapting to the digital age and ladies and gentlemen, together, we're helping radio reach new heights.
About The NAB Radio Show
The NAB Radio Show is the largest annual convention for radio. This year's show, Sep. 23-25 in Philadelphia, delivered a one-of-a-kind networking opportunity for station professionals representing all format and market sizes.
The National Association of Broadcasters is the premier advocacy association for America's broadcasters. NAB advances radio and television interests in legislative, regulatory and public affairs. Through advocacy, education and innovation, NAB enables broadcasters to best serve their communities, strengthen their businesses and seize new opportunities in the digital age. Learn more at www.nab.org.