Tuesday, April 17, 2007

Rehr Delivers Keynote Speech At NAB2007 - And Yes, He Mentions The Merger

April 17, 2007

REHR DELIVERS OPENING KEYNOTE ADDRESS AT NAB2007

WASHINGTON, DC -- NAB President and CEO David K. Rehr delivered the opening keynote address at NAB2007 in Las Vegas today. Below is a transcript of his prepared remarks.

Thank you and good morning.

Radio and TV broadcasters and our network partners implicitly understand the power of images.

Radio reporter Herb Morrison covered the explosion of the luxury airship, the Hindenburg when it burst into flames on May 6, 1937, in Lakehurst, New Jersey. His broadcast created a powerful image in the minds of the radio audience. You can hear the compassion and horror in More-is-son's voice. Let's listen.

Television, of course, also gives us powerful and indelible images, like these unforgettable events in history. These are moments we'll never forget.

Today, I want to look beyond the power of images to the power of words — exemplified by these great statesmen.

As we have just heard, words have consequences.

The words that we use in our business also have consequences. These words are critical to how we redefine our issues and our identity as we proceed into our digital future.

And that's what I want to discuss today.

But before I look forward to what we must do in the future, let me give a quick summary of what the NAB has accomplished over the past year.

You can call last year Phase 1.

It was a transition and it was successful.

For one thing, it was a year of listening — for the organization and for me personally. I spent much of the year listening to what you said our strengths are what our challenges are. I listened to your hopes for this business and, frankly, your fears.

I tried to be visible.

I tried to be everywhere, as you can see from this map. And where I couldn't get, other NAB executives went. And no matter where I traveled, I tried to spread the energy and excitement I feel for this business that is reinventing itself.

Last year also marked a transition in our attitude and approach toward advocacy, which is a much more active word than "lobbying." As you may know, the word lobbying comes from those who stood in the lobby of the Willard Hotel in Washington, D.C. in the 19th century, waiting for members of Congress to come see them.

Ladies and gentlemen, today we can't wait. If we simply wait and react, it's often too late. Instead, we have to anticipate.

In the past year we have implemented many changes at NAB to signal to Capitol Hill, the Federal Communications Commission, and others that this organization is going to be more aggressive.

It will be forward-looking. We will lead, not follow.

I asked the NAB staff, "How can we do this better?" I asked many of you the same question. I asked our friends on the Hill. We took a hard-eyed look at our standing in Congress.

As a result, one of the things we did is beef up our government advocacy team with strong, bi-partisan hiring. We are set to do battle. But we can not do it alone.

Over the last year, one of the goals of NAB has been to work more closely with our partners on issues of concern to all broadcasters.

We are working closely with groups like the Television Advertising Bureau, the Radio Advertising Bureau, the HD Alliance and the Radio and Television News Directors Association, among many others.

But most especially, we must have a close working relationship with our network partners. ION Media Networks, Univision Communications, and The Walt Disney Company representatives serve on our Board of Directors. And Preston Padden of the Walt Disney Company serves on our executive committee.

And now the big news:

Today, I am very pleased to announce that NBC has joined our association.

I would like to thank NBC President & CEO Jeff Zucker, Executive Vice President and General Counsel Rick Cotton, and President of NBC's Television Stations and Network Operations, Jay Ireland. Jay is with us today, and Jay, I want to thank you for this commitment. We appreciate your support and confidence, and we look forward to working together on behalf of all broadcasters. Jay, please stand and be recognized.

Yes, last year marked a transition, a first step, a rethinking not only of our brand but of our business. We began working to insure that our branding and our messaging was consistent.

In order to advance our agenda, we want to make sure that everything we do, everything we say – we say and do with an eye toward the Congress. And to help us speak more consistently, more compellingly, more positively, we created a new marketing communications group and a new media relations team. I believe we have our internal house in order for the next phase.

Phase II.

Phase II takes us a step further.

Phase II involves how NAB frames issues, defines words, and defines ourselves. In our businesses we understand the power of images very well. We also understand how to use words that paint the right mental pictures for our audiences. But we must apply that method to ourselves, and how we describe our business.

Words have consequences.

And we need to be more astute choosing the words that describe us and our positions on the issues. We need to choose words that advance our cause — not words that are inherently self-defeating, confusing, defensive, or simply outdated. The words we use, ladies and gentlemen, matter.

Now why, am I making such a big deal of this? Well, do we call the new, high-tech Mercedes S-Class car a horseless carriage? Of course not.

Broadcasting is using the equivalent of horseless carriage language in many ways. We have been using 20th Century language to define ourselves and our positions in a 21st Century world. And frankly, that has to change.

As an industry we need to rebrand over-the-air radio and television broadcasting to reflect the new digital industry that we are creating. A new vocabulary will make our industry and our issues even more understandable to policymakers and the public and more in harmony with the future.

Let me start with an example of success thanks to iBiquity radio.

When iBiquity used the term IBOC-In-Band On-Channel Radio-no one, well, perhaps a few of us, had a clue what it meant. Then iBiquity did something very smart. They changed IBOC to HD Radio. And suddenly a light bulb went on. People got it. Because they already knew what HDTV meant. That changed vocabulary is one reason, I believe, HD Radio is taking off.

iBiquity's change in terminology is an example of how we should all be thinking differently.

But let me give you an example of a television issue where I believe our word choice has put us at a disadvantage.

Multi-casting. Must-carry. What does it all mean?

With the transition to digital, broadcasters will be able to offer multiple streams of programming within their current television broadcast signal. The terms surrounding the issue are terms like "multicasting" and "must carry." When people hear about "multicasting," they assume that the cable companies have to cut their channels to accept ours.

Now we all know that's not true.

This is not a case where the pie is only so big and we want to eat the cable companies' slices. Through the magic of compression technology, we are making the pie bigger by adding extra slices, extra programming. The cable companies intend to strip out our new programming because we're in competition.

This is in effect "stripping."

And even though NAB holds its annual convention in Las Vegas every year, and what happens in Vegas stays in Vegas, let me assure you we are "anti-stripping." That's what's happening. They are ripping out our data, taking our valuable programming away from consumers. We're not asking to take someone else's property or programming. We're simply asking that the cable companies not take ours. We're simply asking that they do not take the anti-competitive step of stripping out our signals.

We have already begun to take this message to Congress and it has been well received.

Another term that works to our disadvantage is "down conversion." Now that sounds like it has something to do with duck feathers. Perhaps converting them to some kind of renewable energy source. But we know that's not what it means.

In the last Congress, draft legislation would've permitted cable operators to down convert or degrade a television broadcaster's high definition signal to a standard one. This would allow cable companies to carry their own channels in full HD while degrading our signals.

Let me describe what is really happening.

Consumers spend thousands of dollars on HD sets. Meanwhile, local broadcasters have already spent billions of dollars on the transition to digital. But what we have here is broadcast discrimination by the cable companies.

It is digital discrimination.

It is HD discrimination

And doesn't calling it discrimination make more sense than "down conversion?" The NAB will work on Capitol Hill to protect the investment of TV viewers and TV broadcasters alike. We will work to prevent the discrimination of high definition broadcast signals.

Then, we have the issue of what unfortunately has been called "performance rights."

Yes, people should be ALLOWED to perform! What good American is against denying rights?

We have civil rights. We have human rights. We have property rights. We have a whole Bill of Rights in the Constitution. But performance rights?

This is not about a right.

It's about a wrong that the record companies are seeking to perpetuate.

Radio has long played the record companies' music at no charge to them, the artist, or the listener... and in return the record labels and the artists have received free promotion of their products.

Free music for free promotion.

This arrangement has been mutually beneficial to radio, the record labels and the artists. Radio airplay continues to be the driving force behind music sales in this country. But now... the record labels want the government to impose a tax on radio stations for playing their artists' music.

Imagine the brazen greed it takes for the record companies to expect us to pay them for the honor of marketing and promoting their artists' music. It would make much more sense for us to charge them for our promotional efforts.

We will advocate that Congress oppose this levy on the market. If successful, it would be a government imposed performance tax. And we will fight it with everything we have.

This next clip is Mel Karmazin, familiar to some of you as the CEO of Sirius satellite radio, testifying before Congress recently. As you will see, he is attempting to define moving from two companies to one company as a merger, not the duopoly to monopoly that it is.

And on this point, Mel and I agree.

This merger will not be approved.

No matter how much Mr. Karmazin and everyone else at Sirius and XM use the word, it is not a merger they seek. It is a monopoly. It is a government sanctioned monopoly.

Now some of you might not be aware I am an economist by training. I ask you, when has a monopoly ever served the interests of the consumer?

In 1997, when the FCC authorized two nationwide satellite radio operators, it specifically prohibited them from merging. The bad business decisions of XM and Sirius -- should not be rewarded with a government bailout in the form of a monopoly.

This certainly would not be in the consumer's benefit.

It will be a huge consumer headache because the companies use two different technologies which are not compatible with each other. Like beta and VHS. No, this is not about the consumer. It is not about advancing technology. It is about lining the pockets of financiers and corporate executives.

A monopoly is a monopoly is a monopoly, and we at NAB will continue to adamantly oppose it.

Ladies and gentlemen, here's the big picture: we need to reframe and rebrand not only those issues but perceptions about the broadcasting business itself.

To be honest, we, at the NAB, don't yet have all the answers.

But I do know that terminology like "free-over-the-air broadcasting" has become a bit clunky and perhaps outdated. I do know that terms like "terrestrial radio" are meaningless at best.

I was up on Capitol Hill recently and one of the hearing witnesses used that very term.

A congressman said, "Terrestrial radio? As opposed to extraterrestrial?" Terrestrial radio sounds like it either involves aliens or is something from a bygone time - which we are not.

Internet radio sounds like the future. Wireless sounds like the future. Digital television sounds like the future. High def sounds like the future. YouTube, Google, iBiquity sound like the future.

What does "free over-the-air broadcasting" sound like? I think you know.

We were wireless before it was hot, but we are captives of the language of decades gone by. The language of our past is confusing and perhaps obsolete. We need to update and clarify. We need to reframe and rebrand.

That is with one exception.

One word that is admittedly old-fashioned, yet continues to have power.

The word is local.

It's a word that policymakers immediately understand and definitely appreciate. In this day when society is homogenized and globalized with international corporations, local broadcasters are the only means to keep people and communities together and informed.

The NAB right now has a team working on finding the best words to define us and take us into the future. This will be a long and continuing effort. But, we need your help. We need your ideas. We need your self-discipline, so that we all speak the same language.

We need you to change the way you think and communicate about your business-in your marketing and in your public affairs efforts.

With the emergence of digital radio and digital TV we have an ideal opportunity to do just that.

As the broadcast business reinvents itself technologically, we must also reinvent our identity. We should draw on the best of the past, and redefine it for the future.

And my pledge to you today is this: the NAB is committed to redefining this business, so that perceptions will match our progress.

Broadcasting is being reborn – and is becoming a new business for a new age with a great future.

Thank you very much.

Labels: hd radio, merger, nab, sirius, xm