Thursday, April 19, 2007

NAB Tactics

April 19, 2007

An interesting article regarding the NAB, and the satellite radio merger

Dinosaurs vs. Satellites
How the National Association of Broadcasters is trying to kill radio

Radley Balko April 19, 2007

Last year, the National Association of Broadcasters (NAB), the lobbying group for local radio and TV stations, began running a series of truly awful advertisements attacking satellite radio. In one, for example, you hear the play-by-play for a baseball game. Just as the announcer gets to a crucial point in the action, an operator interrupts, and asks you the listener to deposit money to keep listening, as if you were on a pay phone. A voiceover then announces, "Radio. You shouldn't have to pay for it."

The ads were economically illiterate (as if the time you spend listening to the endless commercials on traditional radio were free), blatantly dishonest (you pay a monthly fee for satellite radio, not by the hour), and roundly criticized for their broad assault on the intelligence of the average radio listener. But the NAB stuck with them. They were part of the NAB's longstanding, sometimes vicious attack on satellite radio, an emerging medium that the NAB clearly sees as a long-term threat. And with good reason.

While satellite radio still seems to be figuring out how to make a profit, it's soaring in popularity, winning over 14 million paid subscribers in just a few years. Of course, that may not be a reflection of XM or Sirius' quality so much as the mundanity and drollery of Clear Channel America. With only two business models to choose from, it's unlikely that satellite radio has come anywhere close to fulfilling its potential.

So when XM and Sirius announced a highly-publicized merger this year, everything changed for the NAB. Clearly, the two startups it so feared for so long were floundering. And with no other licensed satellite providers around, the NAB's position on the merger became clear: What's bad for satellite is good for the NAB. So the NAB would oppose an XM-Sirius alliance.

Problem is, the only colorable argument against the merger is that it would create a monopoly for satellite radio. XM and Sirius cleverly (and probably accurately) headed that objection off by noting that satellite radio competes with a variety of technologies for the listener's ear. This put the NAB in an awkward position. The lobby would have to argue that despite its 15-year effort to derail satellite radio, satellite radio was not a competitor. Of course, the harder the NAB fights and the more money the NAB spends to promote this message, the clearer it becomes that the NAB fears the competition posed by an XM-Sirius alliance. In effect, the more the NAB fights the merger, the more it undermines its own argument against it.

But adherence to logic and consistency have never stopped a Washington lobby before. So the NAB went to work. It first put an abrupt halt to the "Radio. You Shouldn't Have to Pay for It" ads (though a press release announcing the ads remains, the ads themselves seem to have disappeared from the NAB's website)..........READ MORE

4/19/2007 10:53:00 PM

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  • I made my feelings known in the survey, but what else can be done to sway the FCC and others that this merger should go through? I s anyone out there fighting for their case beside Mel?

    By Anonymous Anonymous, at April 20, 2007 10:30 AM  

  • I don't have any sympathy. Perhaps XM and Sirius shouldn't have offered the big names the millions of dollars they did.

    I work with NAB and a merger would be devastating to local radio and consumers. As a single entity, they would be able to artificially lower advertising rates in local markets. Keep in mind that traditional radio operates primarily on the local level while the satellite companies operate on both.

    By Anonymous Matrick, at April 20, 2007 11:45 AM  

  • Interesting Comments matrick....

    You state that they would atificially lower advertising rates at the local level. in all of my years as a satellite radio consumer, I can not think of any "local advertising" that is used on satellite radio.

    By example, Stop & Shop is a regional suopermarket chain in my area. I have heard Stop & Shop ads on my local terrestrial stations. I have never heard a stop & Shop ad on satellite radio.

    Terrestrial radio want to claim that they do not compete with satellite radio, but the fact is that they do. National companies such as Sears seek out a national audience.....but rest assured that "local" terrestrial radio is also seeking those ad dollars.

    There is a compatitive landscape that exists whether the NAB wants to recognize it or not.

    By Blogger SSG, at April 20, 2007 2:07 PM  

  • You can let your feelings be expressed to the FCC via the link in the right sidebar.

    SSG sister site SATCOS has surveys that relate to satellite radio, as well as the merger.

    Visit www.satcos.blogspot.com and participate in the surveys. These will be forwarded to the FCC.

    By Blogger SSG, at April 20, 2007 2:38 PM  

  • I work with NAB and a merger would be devastating to local radio and consumers.

    I work at a GM plant making Avalanches. Toyota is devastating American auto makers. Perhaps the NAB can spend their money on this issue or maybe spend it on compelling content.

    By Anonymous Anonymous, at April 20, 2007 4:22 PM  

  • I am sooooo sick of hearing how satellite radio with be devastating. It does not take local advertising, how many times do you have to hear it before you get it? The only reason you would be devastated is because your product stinks! Satellite radio stocks have been devastated bt the NAB's lies and lobbying.

    By Anonymous Anonymous, at April 20, 2007 5:27 PM  

  • I agree with you. Satellite does compete with terrestrial radio but satellite has the unfair advantage of operating in both the local and national level. Doesn't satellite carry ads on sports and news programming?

    I fear that a single satellite provider would be able to establish exclusive deals with local sports teams that would take away from local broadcasters who depend on these sports broadcasts.

    By Anonymous Matrick, at April 24, 2007 10:58 AM  

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