Monday At The NAB Show 2014: Opportunity Knocks ... And So Does Competition
April 7, 2014 at 2:27 PM (PT)
The NATIONAL ASSOCIATION OF BROADCASTERS' NAB SHOW 2014, adopting the theme "Challel Opportunity" (replete with its own theme song), had its formal opening MONDAY morning with NAB Pres./CEO GORDON SMITH delivering his annual State of the Broadcast Industry address, calling broadband "a game changer" but saying that broadcasters are tied to their community and serving the public interest as "the megaphones for freedom and democracy."
"There is no substitute for broadcasters' dedication to localism," he asserted, and he said that other media covet what broadcasters have, like wireless companies, who he said "continue to milk, bilk and bill by the bit." He pointed out that while some in WASHINGTON try to call broadcasting irrelevant, the FCC still thought allowing two TV stations to share sales operations was worth restricting while allowing other media to do so.
Targeting the FCC's focus on broadband, SMITH asked, "Why does the FCC not have a National Broadcast Plan?," wondering why the government doesn't support and encourage research and development for broadcasting. He stressed broadcasters' role in emergencies, calling again for FM chips in mobile phones and rhetorically asked the FCC, "Is this not the best and most efficient use of the broadcast spectrum?"
SMITH criticized broadband's buffering and slow speeds and said that cable and wireless won't uphold decency standards and localism. He asked the FCC to ensure that broadcasters and viewers are not harmed in the spectrum auction process and decried the Commission's restrictions on TV joint sales agreements while pushing TV stations to share channels, asking, "sharing is good until it isn't?"
"Time and time again," SMITH asserted, "we have witnessed how broadcasters deliver life-saving information during emergencies – often placing their own lives in jeopardy. I would ask the FCC, is this not a highest and best use of spectrum? What is the worth of a human soul?"
The opening session also bestowed the NAB Distinguished Service Award to UNIVISION TV news anchor/host and radio commentator JORGE RAMOS, who reminisced about his career, promoted the new FUSION network, and argued for the continuing relevance of journalists and against the deportation of undocumented immigrants, and featured a talk between SMITH and UNIVISION Chairman and longtime television producer HAIM SABAN, who joked that SMITH, in his speech, had touched "on every single thing I was going to talk about, so what are we going to talk about?" The NAB also promoted the "Got Your Six" campaign supporting veterans and their reintegration into civilian life after serving, with a PSA voiced by NBC's BRIAN WILLIAMS. and a website, gotyoursix.org.
The NAB is saying that 94,000 people are attending the convention this year.
AM "revitalization," ownership rules, process reform, and other issues facing the industry were the focus of a panel called "Radio Renaissance" MONDAY morning. The FCC's Media Bureau Chief PETER DOYLE joined attorneys MARISSA REPP and REBECCA RINI, BRYAN BROADCASTING CORP.'s BEN DOWNS, and the MINORITY MEDIA AND TELECOMMUNICATIONS COUNCIL's JOY JAMES and moderator and attorney CHRISTINA BURROW on the panel.
DOWNS, who has been active on the AM revitalization front, noted that the FM translator proposal for Ams seems to be universally accepted but easing skywave interference limits "are going to be contentious." REPP agreed that the translator window is "a no-brainer," and added that she hoped that the rule allowing for more flexibility in locating the translators is also a "no-brainer." RINI raised the option of taking more low-VHF television spectrum for AM relocation purposes.
JAMES brought up the topic of access to capital for minority and new entrant entities; she explained the MMTC's incubator model, and RINI added that the goal is to find incentives for minority and female operators to improve underdeveloped facilities on all bands. But DOWNS noted that the access to capital issue remains the biggest impediment. RINI suggested that loosening foreign ownership restrictions might help, and REPP also voiced the opinion that newspaper-radio cross-ownership prohibitions be eliminated. JAMES also expressed concern about the Commission's "eligible entities" definition.
On process reform, DOYLE said that the Commission has released a dozen orders TODAY disposing of several appeals he termed as "meritless" and said that more "short form orders" to dispose of more of the backlog. REPP approved of the move, adding that the filings tend to get held up for years and in turn make getting financing for improvements to the challenged stations hard to get.
On LPFMs operating at variance with their licenses, REPP suggested not going directly to the FCC to complain, and RINI agreed that the first step should be to call the station, "principal to principal." She added that while the LPFM operators are "on the side of the angels... doing really good things," she said that they are often unsophisticated operators, and later noted that she is seeing "creeping commercialism" on LPFMs, especially as some operators need to raise money to continue operating. DOYLE said that there is a distinction between interference as a result of LPFM's operating at variance with their approved parameters and those which are in compliance; complaints of interference, he said, must be from a disinterested listener, not related to station staff.
Looking At Radio's 'Four Significant Issues'
Radio's "four significant issues" were addressed at a "lunch and learn" session, with the RAB's ERICA FARBER addressing the misperception of radio, MARKETRON's DEB ESAYIAN talking about digital revenue growth, HUBBARD's DREW HOROWITZ on HD Radio, and BIA/KELSEY's TOM BUONO on revenue trends.
FARBER noted the positive aspects of radio today, including the figure of 244 million persons 12+ listening to radio each week -- 92%. She pointed out the medium's higher reach than any other medium among adults 25-54, and more time spent with radio than eight other available media combined. AM/FM RADIO is also the leading choice for music discovery and for in-car entertainment, according to EDISON RESEARCH and TRITON DIGITAL's INFINITE DIAL study. FARBER touted the growth of the NEXTRADIO app for FM tuners in cell phones and te increase in digital offerings, from streaming to HD Radio. She called streaming "complimentary" to broadcast radio and gave statistics from KATZ RADIO GROUP about radio's dominance out of the home and closest to the point of purchase and from PRESSLAFF INTERACTIVE on how radio is the top influencer of where people decide to go to buy a car or for 18-34 adults to decide on home improvement projects. She also suggested that radio needs more salespeople on the street and to spread out beyond selling to the "same advertisers." Her PowerPoint presentation is available at www.rab.com/whyradio.
ESAYIAN enthusiastically promoted the pursuit of digital revenue, showing a presentation emphasizing how digital advertising is "getting personal" with targeted ads (which she said threw her for a loop when she first got targeted with a REESE'S ad because she once "liked" a peanut butter cup page on Facebook). She gave an example of poor target advertising being when her local FORT MYERS area PITA PIT franchisee consistently texted her offers for chicken pitas and salads when she prefers steak and her loyalty card swiping should have given the chain that information on which to base the advertising. ESAYIAN offered a list of 30 ideas for sponsorships that include digital elements like user-generated videos, and showed some stations' execution of the ideas, from pizza giveaways to air talent doing video endorsements. And she demonstrated how to come up with a pricing model for interactive marketing: exposure, meaning estimated monthly impressions multiplied by an appropriate CPM rate for that inventory (the more targted, the higher the CPM); production hours (charged at the going freelance rate for web designers in a market; ESAYIAN joked that she would kill the person who came up with the idea of not charging for production); and brand endorsement (adding 20% to the total cost for placement within the station's brand site experience).
HOROWITZ gave a pep talk on HD Radio, suggesting that the technology is growing and the industry is developing compelling content for HD2 and HD3 channels. He called the connected car "mission critical," with the industry needing to fight for real estate on the dash. The development of an HD2/HD3 advertising network with COX and HUBBARD on board is being formed by iBIQUITY DIGITAL to sell ads to large advertisers, HOROWITZ said.
BUONO gave an overview of data his company has amassed about small and medium businesses' marketing behavior, including the increased use of social media and general satisfaction with the results they get from radio. He also looked at consumer behavior and the changes in local advertising, with radio presently getting 11.3% of the increasing pie but dropping to 11.1% by 2017 as online exceeds radio for the first time and mobile taking a larger share as well. "All the growth we're seeing... is on the (online) digital side," BUONO said of local advertising. He noted that several categories of advertising, like automobile and health care, will be opportunities for local radio as newspapers decline; some categories, like full service restaurants, are showing explosive growth in online spending.
Selling the Core Product
COX MEDIA GROUP ORLANDO VP/GM SUSAN LARKIN moderated a panel on core radio revenues with RADIO ONE PHILADELPHIA VP/GM SHAWNEEN THOMPSON, BEASLEY EVP Sales HEATHER MORRISON, and TUNED-IN BROADCASTING Triple A WRLT (LIGHTNING 100)/NASHVILLE VP Sales and Marketing TOM HANSEN discussing tips and tools for selling traditional media as opposed to digital and integrated media. Each panelist described their stations' local sales efforts and compensation plans and their methods of incentivizing sales with bonuses; they also discussed which categories are driving new business (health care, telecom, insurance, education among them), sales department structures (WRLT works with each salesperson individually as to their strengths; RADIO ONE salespeople all represent all products, core and digital), and percentages of digital vs. core (RADIO ONE sales are 7% digital; WRLT has a higher-than-average non-traditional revenue percentage due to frequent event production), and more.