Tuesday, September 30, 2008

Radio: Isolationism - NAB style.


It started last Friday when the NAB tried to pull a fast one but got outed for a clandestine maneuver in Congress to block passage of the Webcaster Settlement Act of 2008, which allows negotiations to continue between the RIAA’s SoundExchange and Internet radio over Internet radio royalty payments.

The NAB didn’t like all the attention Pandora was getting.

It later withdrew its objections when the negotiation deadline was extended from December 15 to February 15.

Under the present copyright laws, The RIAA’s SoundExchange isn’t allowed to negotiate for non-members who are eligible for royalties.

It’s akin to allowing the Paris Peace Talks to continue during the Vietnam War. You may not get anywhere – but at least you’re talking.

A few months back I suggested that the NAB and SaveNetRadio combine efforts to collectively stop the strong-arming by the well funded and lobbied RIAA.

But, true to form, the NAB will never criticize what it doesn’t understand – it’ll just try to kill it.
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It has been wallowing in isolationism for many years.

Let’s travel back to the year 2002 when AFTRA did their Radio Commercials Contract, entitling voice-over talent a 300 percent increase of their session rate fee if a spot recorded for terrestrial radio broadcast was streamed on the Internet.

Radio learned about the AFTRA deal only after it had already been signed, sealed, and delivered.

When ad agencies were hit with the augmented fees because their radio spots were also carried on terrestrial stations’ Internet streams, they demanded that the responsible stations pay that freight since they didn’t authorize carrying the spots on-line.

So here’s the NAB - an organization that’s supposed to rep radio and lobby for its causes on Capitol Hill –caught completely off-guard. It was unaware of a deal that had a direct impact on – and created still another financial burden for its member stations.

The NAB’s negligence and isolationism had stations scrambling for streaming media ad insertion technology, which, six years later, remains a hit and miss affair.

Three years later, the NAB’s isolationists missed another one: The Family Entertainment and Copyright Act of 2005.

This act makes the sharing or broadcast of any pre-release U.S. copyright material a felony punishable by up to three years in prison and up to $250,000 in fines.

Today, if a radio station plays a track before its official label sanctioned release date – it’s a felony – and violating stations and management can be fined and threatened with imprisonment.

Eleven months after the Family Entertainment and Copyright Act was signed into law, the NAB hired David “Fumbles” Rehr in its cushiest hack job as its new President and CEO.
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He was hired because of his alleged contacts in the Bush administration, which he later proved not to have.

The best description of Fumbles I’ve heard came from inside the NAB. He moved in with his ineptness and let it rub off on the place around him.

Harry Truman was known for that sign on his desk that read “The Buck Stops Here.” The sign on Fumbles’ desk says “Pass the Buck.”

Following the NAB convention in Austin, don’t you think it would make more sense to have the first three letters in the word convention capitalized – or at least hyphenated?

The NAB has proven itself incapable of making the right decisions, organizing its priorities, and understanding the industry it represents.

Instead, it prefers to waste time and money on campaigns that will do nothing for terrestrial radio’s survival.

Take the NAB’s effort to push for a law, which would make AM, FM, and HD reception on all Sirius XM satellite receivers mandatory. The bipartisan Radio All Digital Channel Receive Act is led by Rep. Ed Markey (D-MA).

Let’s go straight to Fumbles’ comments. "The NAB salutes the leadership of Chairman Markey and a bipartisan group of lawmakers for sponsoring this important bill that will boost the integration of HD Radio in satellite radio receivers, including those installed in automobiles.”

He neglected to mention the $10,000 the NAB has funneled to his coffers so far this year for his support of this bill. Markey has received $242,051 or 33.5 percent of his total donations from the communications-electronics industry to date in 2008.

"In addition to providing 235 million weekly listeners with entertainment and music programming, free local radio stations have a long tradition of serving as a lifeline during times of crisis,” Fumbles added. “This legislation will extend and enhance these services as radio stations embrace our digital future."

Let’s not bring up how most local radio failed to provide adequate weather and traffic information during a recent windstorm that devastated parts of the Midwest just a couple of weekends ago.

Keep in mind that this is just another grandstand play just to make the NAB look like it’s doing something for its member stations. The FCC and the DOJ already approved the merger of Sirius and XM – and the NAB has zero influence to force this issue now.

Instead of forming alliances with both old and new media, the NAB will carry on its quest to make more enemies and further isolate terrestrial radio from other medium that could save it.

It makes you wonder if the N in NAB stands for North Korea. Fumbles must make Kim Jong-Il proud.

23 comments:

Sony ICF-S10MK2 said...

I can't believe such an absurd bill to force HD Radio in Satrad receivers would ever gain momentum. Surely, Sirius could challenge this in court. The HD chipsets are way too power hungry, too large, and require special exteral antennas. The FCC stated that they probably don't have the authority to make such a mandate, so now, a Congressional Law is required. Besides, consumers have found out that HD Radio simply doesn't work. Well, I left a nice comment for the FCC and reference to my blog:

http://tinyurl.com/3jqoje

What needs to be done is a Congressional investigation into this HD Radio scam.

Sony ICF-S10MK2 said...

"Rep. Markey launches bill for HD Radio mandate in all Satellite Radios"

"Here's the key fact: Even the 'satellite ready' car stereos don't actually receive satellite radio. The satellite radio signal is received, decoded, and converted to audio by a separate receiver that's connected to your car's stereo via an aux-in jack (and remotely controlled by your car stereo.) Without this external box, the car stereo is incapable of receiving satellite signals, so this legislation doesn't apply to our car stereos, either!"

http://tinyurl.com/4srtmb

If this is true, then Markey and the NAB have made even bigger fools of themselves!

Anonymous said...

John, You left out the one that started it all - the Digital Millennium Copyright Act. Congress approved it and Clinton signed it right under the NAB's nose. They had NO idea what it was and how it would impact radio. Back then all they were doing was partying their asses off over their newfound Telecom Bill freedoms. The NAB has ALWAYS been a waste.

Anonymous said...

Hey John...I think Rep. Markey has to study the Constitution again.

The U.S. government cannot force a manufacturer to buy a licensed item from a private party (Ibiquity) which is the sole supplier of HD Radio chips.

I think he is punch drunk from spending too much time counting his money from the NAB and Ibiquity to recognize that fact.

Wake up, Markey.

Anonymous said...

The last poster is absolutely correct. And there's more...if a person were just interested in satellite radio and purchased the radio for only that reason, how fair is it for such an individual to be forced into paying money to a private company (Ibiquity) that has nothing to do with satellite radio?

Such a situation is not only un-constitutional but it is a big rip-off to the consumer.

Anonymous said...

we have a President that wants to socialize our economy and now we have a congressman who wants to socialize a private company to provide an exclusive and must carry product.

It's a bi-partisan nightmare.
We have Markey , a Democrat acting like a right wing Republican. Bush is a right wing Republican acting like Chairman Mao.

This country is a mess and we should take heed how our media is being hijacked and socialized with governmental help.

I consider myself a moderate but it seems like both radical fringes on either side are trying to close in on the middle using the economy and media as an excuse.

Anonymous said...

What the radio industry fails to understand is that we don't need more radio stations - we need BETTER radio stations and BETTER formats. Forget HD. Shut those stations down and concentrate on making your existing AM and FM stations better. If you want to get the next generation to listen to radio make sure you are provided them with formats THEY want and make them available on line. We will listen to radio that is entertaining and people hosting shows that are live and genuinely care about the audience they are serving.

Anonymous said...

The NAB has that my way or the highway attitude that might have worked in the go go nineties. Today it is old and in the way. Isolationism is the right way to put it. The NAB is clueless to the needs of RADIO LISTENERS. From what I have been reading in your blog these radio chains and the NAB deserve what is coming to them. I hope you are right about the fire sales. I would love to hear real radio again and I would listen if the programming was even marginally good even though I rarely do now.

I love my iPod. I still love radio it just doesn't love me back.

Jack Hannold said...

It’s outrageous that a bill like Markey’s could even be considered, but then, do we really expect any better from Congress?

I’ve seen the bill (available here: http://markey.house.gov/docs/telecomm/hr7157_final_text.pdf), and it adds a requirement “that apparatus shipped in interstate commerce or manufactured in the United States that is designed to receive signals broadcast in both the satellite digital audio radio service and the terrestrial AM or FM radio broadcast service be equipped with technology that is capable of receiving and playing digital radio signals as transmitted by terrestrial AM or FM stations.”

Now if this is interpreted literally, neither satellite-only receivers nor terrestrial-only receivers would be affected. For automakers, the solution is simple: Build an AM-FM analog-only radio, or radio/CD player, with not just one line-level input for an Ipod, but two or more inputs, one of which could be used for a satellite radio tuner – but make the sat tuner an independent unit!

Then this bill would only affect the Tivoli mentioned above, and perhaps a boombox with satradio, if anybody is foolish enough to market one!

One other observation: FMeXta, a better alternative for digital on FM, is on only a handful of stations. But any receiver “capable of receiving and playing digital radio signals as transmitted by terrestrial AM or FM stations” would have to be capable of receiving FMeXtra, and for that matter Leonard Kahn’s CAM-D system for digital AM, too — not just the junk technology that “iNiquity” and the NAB are trying to ram down our throats!

(For info on FMeXtra, see the guest post I did on Jerry Del Colliano’s “Inside Music Media” blog last year at http://insidemusicmedia.blogspot.com/2007/08/beyond-ibiquitys-hd-radio.html and be sure to follow the links in it.)

bobyoung said...

Markey is from my State and I can't believe what a crook he is if this is true and I have no reason to doubt it and it would explain why someone like him whom I'm sure has never even seen an iBlock receiver would sponsor something stupid like that bill:

"Markey has received $242,05 or 33.5 percent of his total donations from the communications-electronics industry to date in 2008."

I'll be sure to give his office another call tomorrow,

Bob Young
Millbury, MA

Anonymous said...

Markey has been successfully courted by the radio and communications industry for years and if I am not mistaken he is number one or at least tied for that position in accepting contributions from the NAB.

There should be an investigation into Ibiquity. They have a tremendous amount of pull on Capitol Hill and among pols for what is supposed to be a smaller electronics company.

Anonymous said...

I would not insult Kim Jong-Il. He has gotten more out of our government than Fumbles has been able to.

Anonymous said...

The NAB delivered exactly what its members wanted back in 1996. It turned into a be careful what you wish for for the buyers but not the sellers. The smart ones got out of the business with more money than they ever dreamed of making in the industry. The buyers with what you call the business plan of 'buy now, plan later' are crying for a lifeline.

The NAB DOES deliver to those that cry the loudest. Today with radio owned by companies that have no idea how to run them or how to match up with new media is a dying industry that doesn't know what it wants so those like Struble can sell them a bill of goods like HD radio and they (esp. Peter Smythe) actually believe it is good for their company and the industry.

The fire sales cannot come soon enough. I look forward to the current crop putting their stations on the block and letting real broadcasters take over.

For that we should thank the NAB. In a way they made it happen.

Anonymous said...

I am very disapointed in Rep. Markey and since he is supposed to represent me I will let him know on no uncertain terms how I feel about his relationship with the NAB. How could we find out what other 'communications' groups/companies are donating to him. I would have to believe iBiquity since he is so willing to give them a free pass which borders on illegal.
Markey, what happened to you? You used to be a good man or at least so we thought. The Massachusetts Democratic Party needs a major overhaul.

Anonymous said...

I would have to say that missing the DMCA was the NAB's first real blunder. Since then it has been one blunder followed by another. The Fumbles moniker is perfect for David Rehr who has done nothing to improve the NAB.

This fixation on HD radio is ridiculous. It is not needed. Maybe someday, yes. Now, no. Chances are when radio does go digital it will be as an internet stream.

Did the NAB never hear of the great convergence?

M.A.I.S. said...

Both AFTRA and DMCA deals forced the station I interned and later worked for to immediately pull our streams. A few weeks or months later we were pitched by a company made up of a group of major radio chains to go with their system of spot insersions. I don't remember the name. I believe they had a black panther as a mascot/logo. The station I was at did not go with it and took its stream off line. Shortly after that I got out of radio. My question is don't you think this was probably done on purpose and that some radio chains knew about the AFTRA deal and maybe the NAB did too and this was kept under wraps so these chains could form this company and benefit from the act? Does anyone else remember this 'panther' company and who the companies were behind it.

Seen it all before said...

Rehr is no different than he was running the beer group. Imports were the enemy, microbrews were the enemy. Those yuppie wine drinkers were the enemy along with all those $9 bottle of wine. He spoke for Budweiser, he spoke for Miller, he spoke for Coors.

He didn't have solutions. He just identified "enemies."

Substitute major breweries for major radio chains. Call satellite radio wine and internet radio and iPods microbrews and you have Rehr recycling old speeches for the NAB.

Beer has the same problem. Old families passing it on to their inbred blue blue kids who don't have a clue how to run any business.

Sound familiar, Mr. Redstone, Mr. Mays, et al?

Believe in beer = Believe in radio.

What a loser. The radio industry will wake up when the fire sales begin.

In Your District said...

Rep. Markey, I hope you are enjoying the wonderful variety of formats from your new HD radio courtesy of iBiquity and the NAB.

Oh, you're not. Guess you will just have to settle for that 10 grand they donated to you for your support.

You are a disapointment. You will never get my vote again.

You side with the people that put not only me but at least two dozen people that I know of out of work by supporting everything from the Telecom Bill radio revisions to whatever the NAB instructs you to campaign for.

Rep. Markey, your price is cheap.

Anonymous said...

"Markey has received $242,051..."

You probably should have mentioned what committee Markey is Chairman of.

And that the $10K from the NAB is a drop in the bucket compared to the really big bucks he got from REAL money players.

You also ignored the fact that SoundExchange is the real enemy here, not the NAB. They're not worth negotiating with, and the NAB is correct in staying away from them.

However, you also failed to report that the NAB flip-flopped on this issue on Saturday, and today, they were given credit for their help in getting the bill passed.

I'm sure you'll find a dark side to this at some point.

Anonymous said...

Radio Business Report notes that the NAB blew it again for their members and Markey might have been the smartest guy for taking the NAB's money and delivering a half-assed bill. Maybe Markey was playing both sides against the middle after all.

David "Fumbles" Rehr fumbles another one for the home team. What a putz!

Here is the story:

Gaping hole in the digital receiver proposal

The "Radio All Digital Channel Receiver Act" introduced by Rep. Ed Markey (D-MA) makes room on digital receivers designed to be interoperable between newly merged satcasters XM and Sirius. But there's a catch. The receivers have to already include regular old analog terrestrial AM and FM. Here's the wording that would amend Section 303 of the Communications Act of 1934, contained in new subsection (z): "Require that apparatus shipped in interstate commerce or manufactured in the United States that is designed to receive signals broadcast in both the satellite digital audio radio service and the terrestrial AM or FM broadcast service be equipped with technology that is capable of receiving and playing digital radio signals as transmitted by terrestrial AM or FM stations." A Markey staffer confirmed that the requirement to provide for reception of digital AM-FM only applies if the receiver in question is already designed to receive analog AM-FM.

RBR observation: So if you're Mel Karmazin, how do you keep HD radio off of your digital interoperable satellite radio receiver? DUHHHHH. One of the FCC merger conditions was that third party manufacturers be allowed to build receivers with as many bells and whistles as they wish. But this bill, should it be passed, may inspire cost-conscious manufacturers to provide an MP3 port or some such thing and simply bypass terrestrial radio altogether. If the goal is to assure that all receivers have access to local broadcasting so they are a can tune into information sources during an emergency, there needs to be a terrestrial carriage requirement, digital AND analog, period.

Anonymous said...

i LOVE IT I LOVE IT I LOVE IT! Wonder if Fumbles called Markey asking for his $10K back?

How stupid of Fumbles and the NAB. By this little loophole it assures the radio industry that NO satellite receiver will EVER be manufactured with an AM and FM band. Radio shut itself out - period - thanks to Fumbles.

I don't know whether Markey was just as dumb or twice as smart as Fumbles. Whatever that may be the NAB has delivered radio a terrible blow.

Satellite receivers will be manufactured with iPod/MP3 ports as an option. Radio? It is not even an option.

Fumbles and the NAB: You clowns are as DUMB AS THEY COME.

RADIO R.I.P. unless you fire Fumbles.

Anonymous said...

Worse-comes-to-worse, all Satrad has to do is provide AUX ports for terrestrial analog and digital radios.

paul vincent zecchino said...

Isn't this bill typical of someone with a long history of attacking the Bill of Rights?

Why stop here? Why not include HD in toasters, dishwashers, and bidets? Shouldn't HD be in every iPhone, Blackberry, and phone booth?

NAB and its HD cronies demand an all HD world. There's just one problem...

As a poster above stated, 90s 'my way or the highway' gags are bust.

During the 90s, top level gagsters declared, 'everyone must have access' and 'all must go digital'. Those who blatted these bizarre diktats never ran, much less started a business. Most never 'worked' - as 'we know it'.

Still, they knew best. Oh yeah. Wasn't that the premise of the soviet 'Command Economy' - as well as its undoing?

BigRadio proclaims HD's 'inevitability' - another Command Economy doctrine - even as listeners turn off radio entirely.

Are the NAB and iNiquity ready for North Korea yet? Or could they give seminars in totalitarianism to Kim 'BimboMe'?

HD is bust. Lames who push it hasten the demise of radio.

Paul Vincent Zecchino
Manasota Key, Florida
04 October, 2008

"You're lame. You're bust.
Go cry a little."
- "HEIST",
c. 2002, David Mamet