Tuesday At The NAB Show: It's FCC Day
April 8, 2014 at 4:51 PM (PT)
Today's NAB SHOW 2014 agenda includes appearances from all five Commissioners of the FCC and other panels of interest to radio attendees.
Wheeler: Broadcasters Should Be Disrupters, Not The Disrupted
FCC Chairman TOM WHEELER opened TUESDAY's proceedings by noting that the NAB "has been critical of some of my actions," but asserting that he has been favorable to broadcasters in the past, saying that as a venture capitalist, "I put my money on the future of broadcasting." He said that the American people are his client, and "the interests of the American people are served incredibly well by a vibrant broadcast community." "My purpose today is optimism," he claimed, "not pessimism," focusing on opportunities for broadcasters and what the FCC can do to facilitate them.
"We believe that competition is better than regulation" for innovation and consumer protection, WHEELER said, adding that broadcasters are poised to be "the instigator of competition ... we are at an inflection point at which broadcasters can move from being disrupted to being the disruptor." Citing the canal industry as an example of a business that resorted to seeking regulatory protection instead of redefining itself, and failing as a result, and cable television companies as an example of an industry that successfully redefined itself, he said that he hoped to see television broadcasters move into offering competition in delivering "cable-like" services, with the advantage of being local and having low cost.
Stepping from behind the podium to deliver his prepared remarks, WHEELER also discussed over-the-top services and cited a PEW study saying a third of Americans watch news online, interpreting that to mean broadcasters are in the lead in being able to offer local news content online, leveraging their content online for over-the-top consumption. "The Open Internet is an Open Sesame" for television to take advantage of the opportunity for expansion, he asserted, warning that "the window won't be open forever" because cable and telephone companies are looking in the same direction.
WHEELER raised the issue of incentive auctions and told broadcasters that "there is no conspiracy," participation is voluntary, and that the scheme was mandated by Congress. However, he claimed that the auctions offer a financial opportunity for broadcasters, and touted the prospect of spectrum sharing, demonstrated in a test by PBS affiliate KLCS-TV and Spanish-language independent KJLA-TV/LOS ANGELES, which he said would allow participants to maintain their current business and take home a spectrum auction check. He suggested that the coming auction may be the last opportunity for broadcasters to sell off their bandwidth, voicing pessimism that a second auction would ever come about, and promoted new television technologies including ATSC-3 using OFDM that would improve throughput.
"Broadcast licenses are licenses to serve," WHEELER said, praising the industry but adding that the FCC is following Congressionally-established goals, and defended the agency's restrictions on "sidecar agreements" like joint sales agreements as fulfilling Congress' mandate that broadcasting serve the goals of competition, diversity and localism; if the JSAs are "end runs" around regulation, he said, the Commission will act.
After WHEELER's remarks, NAB Pres./CEO GORDON SMITH asked him about JSAs and how stations entered them with the FCC's blessing and are now being told to get rid of them; WHEELER said that "so often, bad exceptions hide behind the skirts of good intentions." He said that the Commission would permit sidecar agreements that satisfy the statutory mandate, adding that the Commission's concern that "some broadcast lawyers took a really good concept and manipulated it to their ends as a way to get around the statutory requirement."
SMITH interpreted WHEELER's position as allowing JSAs where they help increase ownership diversity; WHEELER noted the drop in minority ownership and at the same time an increase in JSAs, although he stressed that one may not be related to the other. WHEELER advised broadcasters to "not fight yesterday's battles" and instead move forward to compete with cable and the Internet.
SMITH raised his "National Broadcast Plan" idea from MONDAY's opening address, and WHEELER said he takes SMITH's suggestion "very, very seriously," noting that the National Broadband Plan was mandated by Congress, and said that if Congress "does the same they did ... for the National Broadband Plan,' the Commission would look to create the broadcasting version. He added that the broadband plan was a reaction to being confronted with several issues that were brand new.
SMITH got a radio question in, asking WHEELER about FM chips in mobile phones. "We are in the middle of trying to come to grips with the IP transition in the wired world," WHEELER said, asking "What is the new 21st century paradigm for public safety?" and adding that the FM chip issue needs to be part of that debate.
Cross-Platform Measurement Makes Strides
The hot issue of cross-platform local measurement was the subject of a session with the RAB's ERICA FARBER and the TAB's STEVE LANZANO moderating and CBS VISION's DAVID POLTRACK, JOURNAL's STEVE WEXLER, CBS TELEVISION STATIONS' PATTI COHEN, NIELSEN's MATT O'GRADY, and ACTIVATION's JOHN NITTI on the panel.
POLTRAK led off with the results of his company's collaboration with NIELSEN to combine analytics across local TV, radio, and online. The TV and radio numbers in NEW YORK, LOS ANGELES, PHILADELPHIA, CHICAGO, and BOSTON were combined using Data Fusion, which combined panelists, weighted them on various demographic breakouts and listening and viewing behaviors, and linked to qualitative data sets. He noted his "career-long crusade" to move from age-based demographics to behavior-based and quality-based numbers ("buyergraphics" and "quality reach"), and explained an update to the "Media Demand Landscape" divisions of audience segmenting the audience into divisions like "media trendsetters" "program passionates," etc., the most important of which are the "media trendsetters," 20% of the audience, mostly in major markets.
Examples of numbers in the study are that combining local CBS radio and television buys in LOS ANGELES (CBS affiliate KCBS-TV, Independent KCAL-TV, and six radio stations) almost doubles the reach of advertising, each medium contributing its own unique reach and the combination being more efficient than cable interconnects, POLTRACK said. In each of the five markets the combined reach was significantly more than the individual media; in BOSTON, for example, an afternoon drive schedule on CBS affiliate WBZ-TV, Independent WSBK-TV, Classic Hits WODS, and Hot AC WBMX reached 51% of women 25-54. The same stations plus Sports WBZ-F (98.5 THE SPORTS HUB) reached 89% of adults 18-49 in full week measurement. The plan's goal is to show a lift in return on investment using television and radio combined, and, ultimately, to add local online and to integrate the results into media planners' models.
From the clients' perspective, NITTI said, the addition of more information is welcome, but the next issue is how to buy using that information. LANZANO asked what a unified standard of measurement should be, and NITTI responded, "there is no silver bullet... there's not going to be a single-source panel that will give you all the information." O'GRADY added that his company can offer impressions "in an IP or digital world" that can be understood by TV buyers, for example, but he pointed out that not all impressions are equal and called the kind of information in POLTRACK's study "a gift." WALSH suggested that "there will never be a truly unified sample"; WEXLER said that for his company, common measurement is "huge, it's a big deal," but that the common denominator is the client, not the data. COHEN offered that there is room for both quantitative and qualitative measurement; when LANZANO asked the audience whether the industry should use impressions or ratings points as the standard for measurement and sales, practically nobody raised their hands either way, indicating indecision in the industry. O'GRADY summed the issue up: "It's gotta make sense to the buyer."
LANZANO pointed out that some sales forces are split into separate radio, TV, and digital sales staffs rather than combining them, but most of the people in the room said that their sales staffs sell everything, with one audience member saying "we're not trying to kill ourselves" by competing against themselves, and someone else noting that stations are likely to only get one meeting with a client.
The panelists agreed that cross-platform measurement is in the early stages, roughly "in the third inning" (although WEXLER noted that the baseball analogy fails if one accepts that a baseball game eventually ends).
NAB Radio Luncheon: Crystal Awards, Hall Of Famer Steve Harvey, David Pogue's 5 Lessons
The annual Radio Luncheon included the induction of STEVE HARVEY into the NAB Broadcasting Hall of Fame, the presentation of the Crystal Awards, and a talk with YAHOO! Tech Editor DAVID POGUE.
POGUE's talk sketched out "five lessons" about tech, including that smartphones are "not a phone," but instead driven by apps, and radio needs to improve its app presence (he asked why there are no radio listings apps); everything's on demand (podcasting); everything's going online ("the Internet of things") (radio apps should sync favorites/presets with home radios); we're a person-to-person economy (Spotify, Pandora for social; NextRadio for terrestrial radio, although in praising the app, he noted that there are no videos and no reviews, other than one he wrote, and asked who's marketing the thing); and things splinter (new tech items don't kill off older tech, just add to the choices).
HARVEY praised radio for its service to the community -- "I don't know where it happened that radio fell in love with the song, but it's all about the personality." His joke-filled speech recounted stories his radio career, starting at WGCI/CHICAGO, before emotion got the best of him and he paused to collect himself, after which he emotionally said he "could not have foreseen all the blessings God has given to me." Turning to the spiritual, HARVEY said, "Prayer is an effective weapon in your life. It changes things." He called his wife a "game changer" and said that he "wouldn't be here if she wasn't right there" beside him.
The Commissioners Weigh In
NAB COO CHRIS ORNELAS hosted a panel with four FCC Commissioners discussing the top issues facing broadcasters right now. Commissioners MIGNON CLYBURN, JESSICA ROSENWORCEL, AJIT PAI, and MIKE O'RIELLY fielded questions about their regulatory philosophies, regulatory parity between broadcast and cable television, ownership rules, retransmission consent, AM revitalization, FM chips in cell phones, and other issues.
PAI said that he hoped that in the review of ownership rules that the newspaper-broadcast cross-ownership rules are eliminated, because the rule and others are "screaming out for reform" in light of changing technology. CLYBURN complained of a lack of current data and of "utterly abysmal" minority ownership figures, while ROSENWORCEL raised the prospect of bringing back the minority tax credit, which she said "is worth bringing back - it made a difference before and will make a difference again."
PAI spoke of his support for AM revitalization and his hope that the FM translator window for AMs is implemented by 2015. ROSENWORCEL praised radio's response to emergencies like Hurricane SANDY, and CLYBURN said she "always wanted to be a radio personality" ("the purest form of exchange, she called radio), adding that "without question, we care about all platforms." PAI added that localism is "in the DNA" of radio broadcasters, describing his visit to GWANDAK PUBLIC BROADCASTING Variety KZPA-A/FORT YUKON, AK. O'RIELLY brought up the NAB's proposal for a National Broadcast Plan, telling broadcasters to be wary allowing such a plan to be drawn up by the same people who drew up the National Broadband Plan that he said hurt broadcasters.
ROSENWORCEL said that she supports the move to activate FM chips in cellphones, while O'RIELLY said that the issue is being driven by consumers and not by regulation.
Playing By The Rules
The FCC panel was followed by more FCC fun, of the regulatory variety, with Media Bureau Chief WILLIAM LAKE and Enforcement Bureau Associate Chief ELOISE GORE joined by attorneys DANNIS CORBETT and DANIEL KIRKPATRICK. NAB EVP/General Counsel JANE MAGO moderated the panel, which ran through current regulatory issues like the changes in treatment for television joint services agreements, EAS tone complaints, and online political files.
LAKE said that the Commission hopes to bring AM revitalization to a Report and Order soon, accompanied with a one-to-a-customer FM translator application window. He added that he has been enjoying digital radio in his car and hopes the industry promotes it more. CORBETT noted the recurrence of certain problems, like contest rules, tower lighting, and public file violations, and KIRKPATRICK agreed that certain violations keep coming up; he pointed out that advertising for e-cigarettes and marijuana may be the next issue to raise "potentially thorny issues."