Reflections on the State of Radio – A Month of Discussions at The Radio Show, State Broadcasters Meetings and Digital Media Conferences
The NAB Radio Show in Washington two weeks ago was a upbeat reflection of the present state of the broadcast industry. But sandwiched around that conference, in the last three weeks, I have spoken at three digital media conferences - and as someone who has grown up on over-the-air radio, and based a career on representing radio stations, the discussions at these conferences raised many questions about the future of the radio industry. At the Radio and Internet Newsletter (RAIN) Summit East in DC, prior to the NAB Radio Show, I gave a summary of the royalty issues facing Internet Radio operators. At the Future of Music Policy Summit in DC the next week, I spoke on a panel on the Future of Radio. And at the Digital Music Forum West in Los Angeles last week, I moderated a panel on music licensing issue for digital media companies. At each of these conferences, the focus was on the digital media, not on over-the-air broadcasting, and many times the question was raised as to whether traditional radio was still relevant in the digital age. I’m not sure how many times I was asked, when I told someone that I am a lawyer who represents radio stations, what I plan to do next when my clients are extinct? Even in media-related industries, many seem to regard radio broadcasters as old-school – a throw back to some other entertainment era. Yet, what surprised me was how these same people who questioned the relevance of radio were all able to talk about what songs were or were not being played on the local rock station, or about the crazy thing some local DJ said that morning and the contests running on radio stations in their market, or about the story on NPR that kept them in their car seats when they were sitting in their driveway at home the night before.
At each of these conferences, in listening to the discussions of the issues facing all the new media (like how to make money), the dark view of radio seemed overblown. Radio still seems to be a vital medium, especially if it can emphasize the advantages that it has. Harnessing the power of radio with digital media creates platforms that neither has on its own. In many ways radio, of all the traditional media, is best able to use its place in the media landscape to expand in the digital world. Radio has always excelled in reaching niche audiences, in much the same way that the Internet now does. By playing to its strengths, whether that be music, news, talk or sports, or some combination thereof, radio can expand its connection and provide broader and deeper services to its listeners, and serve its audiences like never before. And all the digital media companies seem to recognize this potential, but seem to be discounting radio's ability to capitalize on its advantages.
As with any new line of business, there will always be bumps. Unfortunately, my legal brethren are often the ones that create those bumps, occasionally inflating those bumps into small mountains. Legal and regulatory obstacles have scared some broadcasters away from aggressive on-line efforts. I’ve spent much time in the last few years helping clients navigate their entry into the digital world – whether it be in connection with music royalties, concerns with liability from user-generated content or social media pages, the privacy rights of those who sign up for loyal listener clubs, or copyright issues in connection with repurposed content. There are not always easy answers about how a digital broadcaster can do what it wants to do. And Congress and the FCC will no doubt come up with new legal challenges to broadcasters as they develop their on-line presence – witness our recent posts about the Congressional mandate to close caption broadcast video programming repurposed to the Internet and the Commerce Department inquiry into the protections of copyrighted content and its impact on digital media innovation.
But, with time and the energy and imagination of all those involved in the radio industry, in one way or another these issues can be worked out. What broadcaster, after years of dealing with the FCC and its attitudinal fluctuations, can’t handle some new regulatory wrinkle? While, in the digital world, the wrinkles may come not come from the FCC but from one of the alphabet soup of other government agencies that Washington has to offer, it’s just another set of rules that the digital-age broadcaster has to help shape, and then adapt to once they are set. Having dealt with content regulation before, the broadcaster has a leg up in adjusting to regulation in the digital world. It’s just a matter of paying attention to the issues, reading the trade press, communicating with your attorney, and participating in the media organizations who always have given you guidance. Just make sure that they are providing the guidance that you need as you become more and more immersed in the on-line world.
And while some of the questions about regulation, royalties and legal issues facing digital media seem today to have no clear answers, remember how new much of this technology really is. Who carried a computer with them 15 years ago, much less a computer that connected to the Internet wirelessly, fits into your pocket and makes phone calls as well? 15 years ago, streaming music on the Internet was essentially a technical possibility only for the geeks. The oldest Internet radio companies that are still operating are at most a decade old. And some of the biggest players in Internet radio and video - like YouTube and Pandora - have been streaming for just 5 years. With much of the digital media so new, and developing and changing so fast, it is no wonder that the law has not caught up. I emphasized the fact that regulation has not caught up with the digital media developments in several recent presentations that I have done summarizing some of the digital media issues facing broadcasters as they travel on their digital safaris. See, for instance our posts here and here on some of these recent presentations. Yet, even with this legal uncertainty, many companies are venturing forward and exploiting the opportunities that the new media bring – staking out their place in the new media universe.
The rewards for radio broadcasters expanding their reach into the digital world may well be great – in terms of audience and advertising growth and potentially even in terms of regulation. It goes without saying that the Internet offers radio broadcasters the ability to connect visually with listeners (and to better serve their advertisers), and the social networking opportunities can enhance the sense of community that good radio stations have long sought to engender. Radio can leverage its brands to bring all sorts of new services to listeners, and use its connection with its audience to promote those services. And it may bring other benefits in terms of regulatory relief. The ability of so many digital media companies to reach listeners, viewers and local residents through the new media may well spell the doom of the “scarcity” rational that has underlied so much broadcast regulation in the past. We have just this week seen three former FCC Chairman say that, given the changes in the media industry, the broadcast multiple ownership rules are no longer relevant. In the past, the scarcity rationale was the basis for most broadcast regulation – the theory was that broadcasters needed to be regulated because they were so intrusive, and spectrum so scare, that only good actors should be allowed to use it. Thus, restrictions that would never have been allowed to be imposed on newspapers were tolerated by the Courts when they were applied to broadcasters. With the Internet available to give you all the content that you want, when you want it, the justification for this scarcity regulation is fast disappearing.
The digital media obviously poses challenges for radio, but also great opportunities. Radio needs to be there as it develops, to ride the wave, and exploit the new media. Radio can interact with its audiences as never before, and provide new services that were not possible a decade ago. I have radio clients who essentially run on-line newspapers, magazines, and even local television stations – without a printing press or a television transmitter. The opportunities are limitless – by unleashing radio’s creativity onto the digital media, radio will remain relevant in the digital age, and the industry will continue the good fortune that it has so long enjoyed. Digital media companies are going after radio’s audiences (see, for instance, this summary of the recent comments of Pandora founder Tim Westergrin about how that service will be taking on broadcaster’s drive time domination), so broadcasters must be ready to meet the challenge by competing on all platforms that are available in the digital media marketplace. Tomorrow is here today, and it is time to take advantage of its opportunities, and meet its challenges.