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September 14, 2011

Gordon Smith's Prepared Remarks for Radio Show Keynote Address

Chicago -- NAB President and CEO Gordon Smith gave opening remarks this afternoon during the 2011 Radio Show produced by RAB and NAB.

Below is the full-text of Smith's prepared remarks.

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Thank you, Drew, and thank you for your leadership in working with the Radio Show Steering Committee.

Let me add my personal welcome to the Radio Show.

This is a wonderful opportunity for us to share ideas and strategize building a strong future for radio.

We're so pleased to once again partner with RAB on this event.

I always enjoy sharing the stage with Jeff Haley and it was great to hear his vision for new business opportunities to help your future revenues.

It was two years ago that I attended my first Radio Show, in Philly.

It has been an action-packed two years.

NAB has gone from crisis to crisis -- the performance tax for radio and spectrum re-allocation for television...
game-changing issues for both.

Now, with all the stress and strain of these issues, and given that we are in Chicago where Abraham Lincoln was nominated in 1860 for president, I am reminded that he loved humor and enjoyed telling stories as devices to break tension and to relieve stress.

There's one story that he told to his fractious cabinet early in his administration of a vagrant who wandered into a frontier town.

To my best recollection, the story unfolds like this:

The man was arrested on suspicion of stealing a horse.

The sheriff informed him that he could avoid hanging if he joined the local church.

He agreed to join, but before entering the river's water he was not instructed in that congregation's method of baptism.

Three men immersed the vagrant for the longest time, and when bringing him out, shouted at him, "Do you believe?"

Gasping for air and unable to answer, he was immersed a second time.

The three repeated the question, "Do you believe?"

While stammering to answer, again, the three men pushed him under.

But this time, upon bringing the man out of the water, they asked a different question.

"What do you believe?" they screamed.

The man shouted back, "I believe you sons of bitches are trying to drown me!"

Now that story could also apply to my early, challenging days in the Senate and my first two years at NAB.

But on a more serious note, it's such an honor advocating on behalf of America's broadcasters.

As a broadcaster, you are entrusted with the public's airwaves and have the power to reach thousands - sometimes millions - of people.

It is an awesome responsibility to be entrusted with a voice that can impact generations of people.

Of the media, Lincoln said: "Let the people know the facts and the country will be safe."

This is a good reminder of our mission as broadcasters and it's one that I feel grateful and honored to defend as your advocate in Washington, D.C.

Your ability to serve your local communities - to help the American people know the facts and help keep the country safe - is greatly affected by what happens in Washington, D.C.

My career as a senator opened my eyes to the true workings of government and the many foibles of politicians.

I think Mark Twain said it best when he noted, "Suppose you were an idiot.

And suppose you were a member of Congress.

But I repeat myself."

Now there were times that I would have agreed with this view, but the truth is I gained great respect for the political process.

Benjamin Franklin said, "In America, the people govern."

And that is the wonderful fact about our system of governing.

What you say to your member of Congress can make a difference in the way he or she sees an issue.

When I was a senator, I was surprised that not more of my constituents took the opportunity to educate me on an issue when one arose.

And the ones that did, I often remembered.

I didn't always vote the way they wanted me to, but I remembered what they said to me and their perspective weighed heavily in my decisions.

You are important voices in your local communities.

And it is you who can really educate your representatives about the issues critical to the future of broadcasting.

If we've learned anything in our last two years together, it's this: Your engagement matters - it's the foundation of our grassroots strategy, and your voice and actions have a tremendous impact on the success of broadcasting.

When I first arrived at NAB, we were fighting the passage of the Performance Rights Act, which had passed out of both the House and Senate Judiciary Committees and enjoyed the enthusiastic support of House and Senate leadership and the president of the United States.

Yet, we succeeded in stopping this bill from passing because we executed a two track strategy of participating in good faith discussions while aggressively opposing the current bill.

What I remember most vividly about this time was the amazing unity shown by both radio and television members to stop this performance tax bill dead in its tracks.

Together we launched a strategic on-air campaign that sent a strong message to Congress that America's broadcasters won't shy away from raising their voices on the air.

And this summer, we united once again as free, local broadcasters - radio and television - to send a strong message to Congress.

This time it was to prevent the inclusion of harmful spectrum language in the debt ceiling legislation that could have threatened viewers' access to local TV.

Just as our TV brethren pitched in to help us fight the performance tax, radio stations from around the country stepped up to help TV at an hour of maximum peril.

Radio and television stations joined together in airing NAB's spectrum spots more than 76,000 times.

Your message to listeners and viewers was loud and clear: Don't let Congress harm local TV.

They heard you and took action, driving more than 125,000 calls and emails to Capitol Hill offices.

This was an outstanding showing of unity, and we thank you for supporting America's television broadcasters.

This was a victory for the entire broadcasting business.

While we won this battle, the war is far from over, and we may need your help again this fall.

But we can take to heart the valuable lesson we gleaned from this fight and the others we've faced together these past two years.

Working together we are stronger… working together we succeed in protecting and preserving broadcasters' ability to provide the news, emergency information, and entertainment the American people rely on.

Since the advent of radio and television, local broadcasters have made it their mission to better inform the citizens they serve.

We do it because it's the right thing to do and it happens to be good for business.

Radio's value continues to endure as it did with the first people to put stations on the air and there are many reasons to feel optimistic about the future.

Radio remains a resilient business, despite new competitors that crowd the communications landscape.

Can Pandora claim to reach 93 percent of the total U.S. population?

Can satellite radio?

Not hardly - this is a reach only local radio can boast.

And despite difficult financial times that have plagued all industries, the radio business made a significant revenue rebound.

Research notes that investors are taking a fresh look at the sector -- thanks to cost-cutting, lowering debt leverage through restructurings,
new online and mobile initiatives, and the resurgence of local automotive and retail ad spending.

We're focused on the future, investing in new technologies that support radio's expansion in the global marketplace.

We're supporting the rollout of HD Radio, helping to get it into more automobiles to continue radio's rightful place as king of the dashboard and help compete with new features, such as satellite and Internet audio.

We're working to get more radio chips in mobile devices to ensure our listeners can take radio everywhere they go and have constant access to radio's emergency capabilities.

We're leveraging social media to connect listeners to their favorite radio personalities and launching mobile radio streaming apps.

Yet, while we invest in new technology, we must not forget the roots of radio's success - providing local news, breaking emergency information and entertainment to listeners for free anywhere they are.

And, as you well know, we do our part for the health of the economy by connecting our listeners to the businesses that advertise and promote on our stations.

We just commemorated the 10th anniversary of 9/11.

That tragedy demonstrated radio's importance in keeping the public informed.

When Internet and cell phone networks went down… radio did not.

People relied on radio broadcasts to share news of where needs were most urgent, to learn about the missing or to find out news about their loved ones.

Radio broadcasters are first informers and are proud to work hand in hand with first responders in times of crisis.

The lifeline that broadcasters provide to local communities can simply not be replicated as efficiently by other technologies.

As we continue to invest more dollars into digital technology, let's not lose sight of our mission to serve our local communities and keep people informed and safe during emergencies.

We must ensure that in our race to capitalize on digital technology, we are not forgetting our core local listener base and ad buyers.

Lately, we've read in the trades about a difference of opinion in our industry - some believe streaming is the future.

Others believe it does not grow our bottom lines - that stations should focus on bringing in more traditional revenue.

Perhaps we are sensitive to criticism that if radio doesn't jump into the streaming business, we risk being left behind or will be seen as resistant to change.

Indeed, more and more stations are investing in streaming.

Of the top 50 radio operators, 80 percent of their AM/FM stations simulcast their radio content online through a website or stand-alone app.

And while some stations don't find value in streaming, others have jumped in with both feet making a major investment.

For example, in just a few days Clear Channel is hosting a major music festival in Las Vegas promoting its
"I-Heart Radio" app.

And while more stations are streaming, many report that it hasn't necessarily translated into more revenues.

In 2011 total radio online revenue is projected to be only 4 percent of total radio revenue.

I don't know the right answer, but as someone who does not come from the broadcast business, I can tell you what I observe: that local, regional and national advertising for over-the-air signals still provides the strongest source of revenue for stations.

We can't abandon building the successful business model that radio delivers to listeners.

Any expansion into the digital sphere cannot be at the expense of our core business.

But it's undeniable that radio must find a way to expand reception of its main over-the-air signal.

Radio is an automobile-centric industry and the digital community is diligently working to subordinate local radio on the dashboard of every new automobile to other digital offerings.

If you take a look at new cars hitting the market, you can see that our digital competitors are succeeding.

Radio must find a way to get onto other devices, like smartphones - a challenging task in a very crowded and competitive media landscape.

Yet, if we don't, we risk compromising radio's core mission of providing the American people with the services they depend on.

So radio is confronted by the dilemma of choosing which path to take - does it focus on building its traditional business model or invest more dollars in streaming?

With the sessions that NAB and RAB have produced for you here in Chicago, we hope that you will find some of the answers.

It's been our goal to provide you with lots of options and opinions to help in your future revenue development.

This decision ultimately rests with all of you, and we will support whatever that choice may be.

But whatever you decide, I caution you to choose the path carefully and remember what's at stake - the 260 million radio listeners who rely on radio each week.

Something that Frank Kalil, the president of the media brokerage firm, Kalil & Co., comes to mind.

He said: "If you had nothing but new media and somebody walked into an auditorium of the new media proponents, and said, 'Excuse me, Pandora and Sirius XM, I've got some bad news for you.

Starting tomorrow, there is going to be a multiple choice service… that (can) be received by every car and almost every room in almost every home or office in the entire United States-and it's free, that would rattle these people who are coming up with fractions of the audience that radio already has.'"

Radio has remained successful by remembering our core mission: We keep our citizens connected, informed and entertained - anywhere they are, and always for free.

That is the public good we provide.

And we have endured through the years despite changing technology.

This enduring value is something that policymakers can't ignore.

Coming back to Abraham Lincoln, I'm reminded of something he once said: "Let's have faith that right makes might; and in that faith let us, to the end, dare to do our duty as we understand it."

Radio will continue to succeed but only if we remember our duty and understand what that is: To inform, educate, entertain and inspire audiences.

Thank you for doing your duty as broadcasters.

Together we will continue to create a shining future for radio.

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About the Radio Show
The 2011 Radio Show, produced by the Radio Advertising Bureau (RAB) and the National Association of Broadcasters (NAB), will be held September 14-16 in Chicago. This year's show brings radio broadcasters and industry colleagues together to share knowledge, discover the latest innovations, network with industry leaders and explore creative business strategies to help radio flourish in the digital age. To learn more about the 2011 Radio Show, visit

About RAB
The Radio Advertising Bureau serves more than 6,000 member Radio stations in the U.S. and over 1,000 member networks, representative firms, broadcast vendors, and international organizations. RAB leads and participates in educational, research, sales, and advocacy programs that promote and advance Radio as a primary advertising medium. Learn more at

About NAB
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



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