Tuesday At The NAB Show: Industry Issues And Honors

Tuesday

The NAB SHOW's Media Finance and Investor Conference in LAS VEGAS TUESDAY morning kicked off the day's events with a panel on radio's response to the changes in media consumption, from social to mobile and in-car entertainment.

Starting with the ascendancy of social media, iHEARTMEDIA Pres./Business and Partnerships MICHELE LAVEN asserted, "Radio's always been social," citing activity around the iHEARTRADIO MUSIC AWARDS. "Radio was social before FACEBOOK was around." CUR MEDIA CEO TOM BROPHY noted that visual elements in apps like SNAPCHAT are critical for younger audiences, and "those are the (radio) listeners of tomorrow."

The consensus on the panel appeared to be that streaming, personalized content online is less a competitor to broadcast radio than a compliment, although BROPHY warned that while the media are complementary today, "They will not be complementary tomorrow ... it's coming.  It's definitely going to happen." iBIQUITY's BOB STRUBLE noted that AM/FM radio has always had competition from purchased media like CDs, and with those declining, online media is taking that place; he called radio "an extraordinarily resilient medium" that will "always be an important part of the mix." LAVEN stressed the need for radio to continue to generate strong content and pointed to iHEARTRADIO being a first mover with APPLE and others and radio's continued leadership in reach.

A listener over broadcast media is a "40% margin customer," STRUBLE noted, but the same person listening over a stream is a close-to-0% margin customer; RDIO CEO ANTHONY BAY responded that consumers will listen how they want to listen.

STRUBLE claimed that broadcasters are now monetizing HD RADIO with things like traffic delivered as data over HD multicast channels and the RADIO DISNEY deal to use HD2 and HD3 multicast channels to re-establish broadcast coverage after selling off the company's FMs.

On the prospect of streaming services becoming profitable, BROPHY said that it is "a bit unrealistic" to expect companies going through explosive growth to be profitable, adding that he expects PANDORA's business model to generate profit but the "ten dollars a month" operations like SPOTIFY will run into trouble because the average consumer "does not spend $120 a year on recorded music."

The Word From Washington

Current FCC Commissioner MIKE O'RIELLY joined former Commissioner HAROLD FURCHTGOTT-ROTH and FCC Incentive Auction Task Force Vice Chair HOWARD J, SYMONS on a panel looking at current regulatory topics. O'RIELLY opened by reiterating his opposition to the Commission's Open Internet order, while FURCHTGOTT-ROTH added his analysis of the order's forbearance provisions and how they might open up the same forbearance for other areas of broadcast regulation. SYMONS indicated that the Commission hopes to conduct its television spectrum auction in the first quarter of 2016.   

After an extended conversation centered on the television spectrum auction, the panel turned to the proposed rewrite of the Communications Act, .with O'RIELLY deferring to Congress on the issue ("they know best") and said that there is some sentiment within the Commission for reviewing its rules as well but that a review planned for next Summer will land in a political year, giving little hope that it will lead to agreement. He also said that is is "not sure" that there is sentiment within the Commission to eliminate newspaper-broadcast cross-ownership restrictions. FURCHTGOTT-ROTH voiced skepticism that the Commission will address ownership rule changes this year ("this is the issue that doesn't go away").

O'RIELLY said he does not have much detail on the AM revitalization proposal coming from Chairman TOM WHEELER but that he supports the efforts to help AM.

Buying, Selling, Operating

EMMIS' JEFF SMULYAN, BEASLEY's BRUCE BEASLEY and CAROLINE BEASLEY, and SCRIPPS' STEVE WEXLER looked at the market for selling and buying radio stations on their panel at the WYNN TUESDAY.  SMULYAN opened by saying that "radio needs to reinvent ourselves" despite success in retaining share of audience, but parried a question of whether he saw EMMIS getting back into the acquisition game, noting his company's purchase of Urban AC WBLS and Gospel WLIB-A/NEW YORK last year but stressing the need to pay attention to the balance sheet.  CAROLINE BEASLEY said she saw upside in the markets her company entered in the swap with CBS RADIO but added that she sees "streamlining opportunities" for her company in the future as well.  WEXLER discussed his newly merged company and synergies from owning radio and television stations in the same markets, enhancing digital opportunities while keeping radio and TV be their own entities.

Asked what is driving radio ownership consolidation like DEAN GOODMAN's expansion of DIGITY, SMULYAN said that he wishes that there was more and that he is not seeing much in the way of acquisitions.  CAROLINE BEASLEY noted that companies are devoting their money to developing additional revenue streams rather than purchasing new stations.  SMULYAN added that the industry needs to grow its top line to attract capital, and BRUCE BEASLEY said that the need to grow the top line extends beyond increasing sales to doing a better job developing social media; WEXLER explained his company's experiments with doing high school football broadcasting online.

The panel also addressed topics like the revenue prospects for producing live events ("this is what we do," CAROLINE BEASLEY said), corporate centralization at companies like iHEART and CUMULUS of what used to be local decisions ("we're different," said SMULYAN, calling his company's local people "our strength" and describing what iHEART and CUMULUS are doing as a "scale play"), digital strategies, and HD RADIO ("it's critical," SMULYAN insisted of digital and HD RADIO, saying "it's the future... we have to be there"; SMULYAN added that he is unconcerned by the slow growth of HD, calling it a "slow rollout").

On streaming royalties, SMULYAN voiced concern about trading anything from where broadcasters are making money (over the air) to protect streaming royalties for a category that isn't making money (online).  CAROLINE BEASLEY pointed out that the value of being on radio for artists is worth a lot to them, complicating the issue.

Lunch: Marilu Henner Enthuses, Kevin and Bean Get Honored

At the Radio Luncheon, SUN BROADCAST GROUP talk host MARILU HENNER enthusiastically described her love for radio, calling it "the best medium of them all" in a high-energy talk that highlighted the immediacy of broadcasting and the appeal the industry can have even to young audiences (like her children). "We have the best job ever -- EVER," HENNER exclaimed. "This is a great medium, and I hope everyone feels as I do."

Following HENNER's address, longtime CBS RADIO Alternative KROQ/LOS ANGELES morning guys KEVIN AND BEAN -- KEVIN RYDER and GENE BAXTER -- were inducted into the NAB Broadcasting Hall of Fame. RYDER ran through the show's history and staff over the years, getting emotional talking about his family being in attendance (and joking that the LOS ANGELES KINGS rank among hos family in importance). "We could never have inagined this," RYDER said, "(and) we really think you'll come to regret it." BAXTER added thanks to the team's KZZP/PHOENIX PD, TODD FISHER, in attendance, and recalled his start at WINX-A/ROCKVILLE, MD, with his father (also in attendance) calling in to tell him "after years of listening to you, we now have an off switch!" Both RYDER and BAXTER took time to thank former traffic reporter LISA MAY, part of the show for most of the KROQ run before her departure this year.

Prior to their HALL OF FAME induction, ALL ACCESS Alternative Editor SHAWN ALEXANDER talked to KEVIN & BEAN for this week's Alternative 10 Questions. Check it out here.

Chatting With Bob Pittman

iHEARTMEDIA Chairman and CEO BOB PITTMAN appeared in a keynote "Fireside Chat" at the Media Finance and Investor Conference in the WYNN TUESDAY afternoon, interviewed by MEDIALINK CEO MICHAEL E. KASSAN (who also hosts a weekly show for iHEARTMEDIA News-Talk WOR-A/NEW YORK and iHEARTRADIO) and saying that his company is increasingly selling social media results more than straight advertising.  Asserting that "social is the new telephone," PITTMAN said that the "important thing is not to deliver the spots, it's to deliver results... increasingly, we're looking at search and social as a measure of how we're doing for advertisers."

The interview included opportunity for PITTMAN to tout the success of the iHEARTRADIO MUSIC AWARDS and the value of "touching" listeners to provide value for advertisers, and discussion of a wide range of radio topics, including the FM chip on mobile phones, HD RADIO formats ("a tremendous success in getting distribution" but "now we need to crack the code" on getting listeners to use it), embracing programmatic sales (he said it frees his salespeople to "do what they love to do: sell advertising"), and the value of his programming (saying that ELVIS DURAN's present audience is larger than HOWARD STERN had on terrestrial radio).  

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