But he is dead wrong on the issue of mandatory FM chips in mobile devices.
The NAB is pandering to Smulyan to win his support for their imminent sellout to the music industry which I call the NAB Radio Tax.
Smuylan believes FM belongs on billions of mobile phones. It wouldn’t cost phone manufacturers much to include an FM chip on cell phones but they are not rushing to do so.
They know better.
Consumers don’t want their phone to be an FM receiver. Radio does.
Just look around. There are cell phones with FM chips out there already in lesser numbers and they are not being used as radios. Consumers – if we would only observe them – use their cell phones for other things.
Cell phones are not a modern day Walkman in spite of what Jeff Smulyan thinks.
That’s the problem with radio CEOs today. I am sorry they paid all that money for those towers and transmitters but the world has changed since.
Richard Harker, one of the best radio researchers for years, wrote a blog recently warning the radio industry to be careful what it wished for.
Harker citing Nielsen research, tells us that good old fashioned email still takes up almost a half hour of every consumer’s mobile hour. Compare listening to music at less than two minutes an hour and you can see where Richard is headed here. He calls for an end to robo programming, voice-tracked nonsense and unremarkable content.
I believe that the radio industry will have some big decisions to make in the next few years.
Radio executives will have to decide whether to get into the mobile content business in a meaningful way or hang on to a technology that is rapidly falling out of favor. The radio industry hastened its own demise by cutting personalities, moving away from live and local programming and serving their communities. An entire generation (Gen Y) grew up without radio as a key element in their lives.
This brings me back to the FM chip.
What do AM broadcasters think about this FM chip? Are they not broadcasters, too? And HD proponents who missed the boat a long time ago argue why not HD?
Smulyan and the NAB are making a mess out of what really is going on which is the sellout of radio to music industry interests in return for $100 million more in royalties. The NAB spin machine is cranking out talking points in consumer as well as trade publications. And CEO Gordon Smith, the ex-senator, has taken to lecturing you on how much more money do you want to spend on fighting with the music industry. The fix is on.
The NAB includes empty promises like FM chips to sweeten the deal which they intend to make with the RIAA. They will do this without widespread support as most radio station executives are against the NAB’s aggressive position to cut a deal even before the upcoming election that will likely change Congress to be more in favor of preserving radio’s immunity from such a tax burden.
The NAB uses scare tactics like – how would you like to have to negotiate a deal with the evil CRB like streamers had to do. The CRB is a bad idea, no doubt about it, but no radio tax is likely and what’s the rush?
Radio’s FM chip problem is that it is all a fantasy.
Sounds great to think of billions of cell phones as radios, but it will never happen. The major consumer products and mobile industry is against it and they have real lobby groups not what the NAB has turned into -- impotent.
$100 million in annual increased taxes for stations sounds like nothing the way the NAB is throwing your money around.
Except for one thing.
Consumers have and will continue to reject a mobile phone as a radio and $100 million a year is just the starting point. It, like other taxes, will go up and never down.
In other words, you are about to be had once again by your National Association of Broadcasters, the people who were instrumental in tacking on radio deregulation to the Telecommunications Act of 1996 with little warning to most radio operators.
Maybe it’s time to put a person who has actually worked in a radio station as head of the NAB. The last guy was from the beer industry and Gordon Smith is a former senator. Both pretty unimpressive at exactly the wrong time.
Tying FM chips and other perceived “benefits” to an onerous tax of $100 million more radio dollars (for starters) is misguided.
I’ve got an idea for you straight from one of my readers.
He said, if the NAB turns Benedict Arnold on its own constituents one more time and signs off on a music royalty tax of any kind, the NAB members (about 50% of all radio stations) should take 100% of their annual NAB dues and apply it to paying the NAB Tax and pull out.
Then stay home and take a pass on the NAB events and conventions, and put the travel savings, hotel and food costs that they were going to spend with the NAB toward the NAB Tax.
I'll bet the NAB would think twice if their Radio Tax effectively put them out of business instead of you!
I’ll make it one better.
Start doing it now and send a message to the NAB – no added music royalty tax now or ever! If you live up to the boasts you made for the past few years that Congress was on radio's side then maybe consider rejoining them as a member later.
After all, that’s why you have a trade association – to lobby on your behalf.
If the NAB were half as competent as other lobbies, say the NRA, they would be working night and day to scare the living hell out of local politicians who dare not vote against a local broadcaster if they want to be reelected.
The FM chip is on the NAB’s shoulder.
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