Smith, Farber Deliver Remarks at 2013 Radio Show

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Smith, Farber Deliver Remarks at 2013 Radio Show

Sep 19, 2013 7:20 AM

Orlando, FL - Sep 18, 2013 - The 2013 Radio Show featured a session with NAB President and CEO Gordon Smith and RAB President and CEO Erica Farber delivering their views and insight for the convention and radio. Their comments follow.

Comments of Erica Farber

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I am delighted to welcome you to the Radio Show. By being here, your presence shows your dedication and enthusiasm for this great business we all live and breathe everyday.

I'd like to thank and recognize all of the sponsors and exhibitors at this year's show. I want to thank our great partners at the NAB - John David, Gordon Smith and the entire team who we have worked so closely together with to produce this year's Radio Show.

It is also my pleasure to acknowledge the advertisers who were participants at this mornings "Advertiser Speak!" panel and, of course, State Farm and their agency partner, OMD, who joined us for lunch today. On behalf of everyone in this room, we appreciate your time, knowledge and insights and of course your business. Having a strong dialogue with our advertising partners is critical.

I've been at the RAB for a little more than a year and a half and during this time I have seen the impact of positive energy across the industry. Radio continues to be a healthy industry at $17.6 billion. Interestingly enough, it is still greater than some of the newer area of business like Online Video at $2.1 billion and Mobile at $2.9 billion. And unlike some other media, radio has taken an aggressive stand and taken advantage of technology to deliver content listeners want, in whatever format they want and when they want it. And advertisers recognize the importance of delivering their ad messages across all of radio's platforms including radio's fastest growing segment: digital.

Reaching a high of $767 million in 2012, digital grew 13 percent to $401 million by the first-half of this year - that's over eighty percent higher than the first half of 2009.

Communications, financial, automotive, TV/networks/cable, and restaurants continue to be radio's top spending categories. Radio has also realized growth from advertisers in mid-tier categories like professional services and casinos. We need to continue to position radio to capture dollars from new categories as well as identify new dollars from existing advertisers. We have a great opportunity right now with consumer messaging regarding the Affordable Care Act, estimated to reach $1 billion by 2015 according to Kantar Media. Some of you have already taken a first step. Nearly 500 people attended the RAB webinar last month focused on how to develop and uncover new and evolving revenue streams from the upcoming changes in healthcare legislation. And many of you attended today's session on Healthcare advertising as we learned what we need to do to capture our fair share.

Our goal at the RAB is to provide the resources and information our members need today, tomorrow and long-term. Our successful CRM tool, Account Manager, has 5,100 users, helping sales people and sales managers manage their businesses. Available on mobile devices and fully integrated with RAB research databases.

Our Professional Development programs are created to benefit every level within your sales organization, from the entry-level salesperson to the seasoned professional in the digital age.

An average of 2,000 sales professionals each year have used RAB's online training and certification courses and we are pacing to have over three-thousand this year alone. Some of these certification courses deliver a deep dive into best practices of digital sales, as well as education and training to go from transactional seller to client-centric leader.

Earlier this year, we launched a new member benefit - Finding Consumer Trends Report. Via online surveys to radio station data bases, the F.C.T. Report taps into consumer insights focused on specific ad categories to help you sell - both locally and nationally. Our first two were focused on automotive and shopping, and generated nearly 50,000 responses in total from radio station websites. On Friday [Sept. 20, 2013], you will have the opportunity to hear first-hand the successes some stations have already experienced using this research.

According to NPD Group's Annual Music Study, broadcast AM and FM radio stations are the still the top choice for both core and casual music fans. Specifically, ninety-five percent of music buffs tune into broadcast radio as their top choice for music content.

Radio's positive momentum in delivering content, like news, music and information, across additional platforms and devices will continue as NextRadio hits the market. This hybrid radio takes broadcast radio's efficiency combined with interactive capabilities to create a content rich listener experience with new advertising opportunities. Since it's very recent launch, it has already been downloaded over 25,000 times and over 3,000 stations have been tuned in coast-to-coast. We now have another exciting platform to take to our advertisers. And it should be noted that, according to Miller Kaplan data, the number one category spender in radio for the first half of this year is Communications /Cellular and the number eight in rank of overall top radio supporters for the second quarter was Sprint - who increased their support of our medium by one hundred and fifty three percent!

HD Radio receivers are continuing to be added by automakers to more and more models. Did you know there are now over 14 million HD receivers in the marketplace? Every six seconds over 30 percent of all new cars are driving off one of your client's car lots with an HD Radio! Thirty-three automakers have announced their plans to incorporate HD Radio technology in over 170 models by year-end with over 80 HD Radio receivers being included as standard equipment.

The Streaming Initiative Committee, which you will be hearing more about in the coming weeks, is rolling up its sleeves and taking a deep dive look into all aspects of streaming - definitions, delivery, metrics, etc. And this will be important to radio's future especially as eMarketer projects that music listening via streams or downloads on smartphones will be used by 33 percent of the population or nearly one hundred and eight million people in 2017.

As an industry we must speak with one voice to deliver one important message: commercial broadcast radio is nearly 11,000 strong. And the diversity in radio's programming is unquestionable. This medium allows marketers to reach their target audiences according to their lifestyles, interests, age groups and languages at any point in their day and most important closest to the moment they are about to make a purchase.

The RAB works with advertisers, broadcasters and industry associations and partners to elevate radio's position as a growing and healthy medium. We endeavor to exceed in our objective to enhance the perception of radio as a primary medium to all advertisers and increase radio's advertising and marketing revenue and share.

We also work closely with the creative community to develop best practices and to celebrate those that excel in understanding, supporting and that use radio to deliver audio messages that resonate with their potential customers - our listeners.

At the Radio Mercury Awards this past June, we celebrated and honored advertisers that epitomize a level of excellence in radio creative and use. This year's Radio Marketer of the Year Award was presented to Target. For the past several years, RAB's Business Development team has worked closely with Haworth Marketing and Media - Target's media agency - to understand radio's strengths and create ways to effectively use radio across all of its platforms. Let's hear what Melissa Schoenke, Target's Director of Media Strategy, had to say.

That is a true success story for radio. And there are more like these out there so let's keep the momentum going and promote them.

Education is critical to our future and there is a wealth of information available to you during this year's Radio Show in every session you attend - to share with your colleagues, managers, stations and advertising partners. I encourage you to take in as many of the sessions, special events and networking opportunities programmed with you in mind by our steering committee - led by, as you know, Univision Radio's Jose Vall�. We did our best to follow your lead.

So you can take full advantage of the conference, be sure to download the Radio Show app. Simply call * * APP. That's star star 2-7-7 from your mobile device. Also, don't forget that some of today's sessions are being streamed and are available for download later. Check out the app or your program and exhibit guide to find out further details.

Enjoy the conference and remember. . . . Radio, it's on!

Comments of Gordon Smith

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[Jos� Valle, president of Univision Radio] and the Radio Show Steering Committee have produced a valuable event that demonstrates why it's such an exciting time to be in radio. We are pleased to once again partner with the RAB to host the Radio Show. I'm always doubly pleased to work with Erica Farber, and we so appreciate her leadership of RAB. And I want to thank all of you for being here. Your presence signifies your commitment to growing your business and strengthening the future of radio.

As we greet old friends and make new ones during our time here, we are also reminded of some dear friends in radio we have lost this past year. Because we are in Orlando, I want to mention David Peter Cradick - who touched millions of lives through his nationally-syndicated morning show, "Kidd Kraddick in the Morning." Sadly, we mourned Kidd's loss in July... he was a man who had a special connection to Orlando. Each year, his charity, Kidd's Kids, sent terminally and chronically ill children to Disney World with their families. Kidd's listeners supported his charity, donating the funds to make these trips possible. The passing of Kidd, and sadly many other good friends in radio this year, reminds us of the power of this great medium� its connection to listeners� and its impact on communities.

Every day seems to bring a new story of broadcasters serving the public in times of crisis. Sadly, we experienced this earlier this week when a terrible tragedy occurred at the Navy Yard, not far from NAB headquarters in Washington, DC. At times like this, we know we can turn to broadcast radio and television to help keep us safe.

As broadcasters, we share the mission of serving our local communities - providing them with the news, emergency updates, and entertainment that they rely on each day. This mission keeps us focused on adapting to consumers' changing that radio will always be there when listeners need us...on any platform...anytime and anywhere.

John F. Kennedy once said, "For time and the world do not stand still. Change is the law of life. And those who look only to the past or the present are certain to miss the future." Indeed, radio's future lies with the listener, and we must keep looking forward in order to meet their needs.

Unfortunately, many businesses are unable to think long-term, focusing instead on short-term gains to satisfy Wall Street... they seem only capable of concentrating on the here and now.

But radio's success depends on having a long-term vision, too; and we must ask ourselves, what is that vision? What is the model that will enable us to grow our businesses and fulfill our mission as broadcasters at the same time?

Many in this room are currently working to answer this question.

There are those in the radio business who say streaming is our future. But are there other paths that can also move radio forward?

Increasingly, webcasters are facing challenges as the music industry is pushing for more royalties for streaming music. It is my hope that both the streaming and broadcast platforms can have a business model that advances the interests of everyone with a stake in the music industry.

Recent direct deals between broadcasters, record labels and artists demonstrate that there are market-based solutions.

In thinking about radio's future, I am reminded of my Eagle Scout days. Every good scout is taught to leave the campground a little better than he found it; thus, improving the environment for the next group of campers.

Now, if we apply that same principle to the radio business, we must ask ourselves, "Are we positioning our companies to be better than we found them? What investments do we need to make in order to grow better businesses for future generations, and better places for investors to camp their dollars?"

Investing in innovation is crucial to our long-term growth. Radio's future lies in our willingness to embrace new platforms and to go where listeners want to go.

Now, to that end, the NAB is continuing to work with the wireless industry and the government to promote a particular innovation that would greatly serve the public - the inclusion and activation of radio receivers in mobile devices. Nearly a year ago, Hurricane Sandy struck the U.S., devastating communities along the Eastern seaboard. When cell networks and broadband connections went down for days - even weeks - radio remained on the air.

And just recently, when pounding rains caused devastating flooding in Colorado, broadcasters remained on the air around the clock to provide continuous updates and information to their communities to help keep them safe. This was a reminder that radio is an indispensable and irreplaceable lifeline to listeners.

This technology greatly benefits consumers and also provides many opportunities for broadcasters and manufacturers. NAB Labs - our innovation team - has been at the forefront of developing "hybrid FM radio" and bringing it to smartphones and other platforms.

If you're not familiar with hybrid FM radio, this technology uses over the-air radio receivers in conjunction with online connectivity to provide listeners with the best of both worlds - through the built-in radio receiver they are able to access their favorite local radio stations, but they also get a more interactive experience� they can view song information, tag their favorite songs and purchase them, or give a station their feedback.

And the interactive opportunities will continue to grow, providing great features for stations, advertisers and listeners alike. As Erica mentioned, last month we welcomed news from Sprint that two of its smartphones will include FM capability through its NextRadio app. This is a very exciting development that is the fruition of leaders in the radio business and Sprint working together to provide listeners with a hybrid FM radio experience.

Emmis Communications' Jeff Smulyan has been a pioneer in this effort. And like many unsung, pioneer heroes, he has taken his share of arrows in the back to bring this initiative to the forefront of the radio business. And he is joined by other radio leaders, such as Bruce Reese, Bud Walters and Ginny Morris, who have remained steadfast and committed to developing hybrid FM radio.

We congratulate all the broadcasters who worked with Sprint to provide listeners with a great new smartphone option. This is another way to increase our influence.

Remember, addition, not subtraction, is key to our advocacy strength. We must be on more than the dashboard. We must be on the platform of the 21st century...the cell phone. I urge you to help lead this effort to the extent that your balance sheets permit. Don't let our industry pioneers pull this wagon alone.

Hybrid FM radio technology is an example of radio broadcasters rising to the challenge of providing their listeners with more entertainment on-the-go options without any added data or streaming charges. And because it's an open platform, all radio stations can benefit from this innovation.

By aggressively looking for ways to integrate the power of broadcasting and wireless to improve listeners' choices and experience, we are on our way to leaving our businesses better than how we found them.

I'm no longer a scout leader, but I think you all have the potential to be excellent Eagle Scouts. Again, speaking with one voice in our advocacy also strengthens our ability to secure our long-term vision.

Recently, we heard that performance tax legislation may soon be introduced in Congress yet again, perhaps even as I'm speaking to you now. But we won't stand idly by�and as we've done in the past, we will unite and stand firmly against any government mandate that threatens' radio's ability to serve their local communities. I have no doubt that our unity will ensure our success.

As your advocates in Washington, we will fiercely guard your ability to serve your listeners and fulfill your vision, and I believe that our vision must include radio's highest purposes: protecting the foundation of our Democratic ideals - the right to free speech and of the press; delivering lifesaving information during times of crisis; and the music, entertainment and sports that make us feel connected to our communities and to each other. All of these things are at the heart of what broadcasters do.

You should all be proud of the role you play serving your communities.

There is a reason why even with limitless options for content and ways to access entertainment, consumers continue to turn to broadcasting more than any other medium. When the power goes out�when disaster strikes� when they seek entertainment, comfort or important news� your listeners know they can always count on you to be there.

My hope for this great business is that as you picture your future and consider the different revenue opportunities that may lie ahead, this vision includes a way to sustain the localism that you so uniquely and critically provide to your listeners.

Woodrow Wilson once said, "You are not here merely to make a living. You are here in order to enable the world to live more amply, with greater vision, with a finer spirit of hope and achievement."

Together, we can make our vision of radio's bright future a reality.

Thank you.

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