Bad Bet

Mark Ramsey, writing on his blog Mark Ramsey Media, took radio to task in an article last year entitled “Radio Is About to Make a Very Bad Bet,” alluding to a deal brewing over the last months of the year to barter a performance royalty in exchange for radio chips in cell phones, something vehemently opposed by small broadcasters, in particular, struggling in a flaccid economy but favored by higher-ups in the industry who supposedly represent their interests:

Theoretically it makes all the sense in the world: The labels want higher licensing fees from radio?  Fine, then radio wants a faster and easier path between its past and its future. Sounds good — assuming radio has any sense whatsoever as to where its future lies. Unfortunately, recent history has indicated that nothing could be further from the truth.

Herein is where Bob Struble’s iBiquity hopes to get the camel’s nose of HD radio into the tent they’ve only glimpsed as a mirage in its fevered IPO dream for the past seven years. Small broadcasters, already beholden to the music industry for other fees, is in open arms over NAB attempts to railroad this deal through. In this post on the arstechnica site, the Consumer Electronics Association (CEA) also came out strongly against a deal that would force them to include these chips in their products:

But the NAB proposal elicited a furious letter from Gary Shapiro, CEO of the Consumer Electronics Association, which represents the mobile phone makers. The statement threatens nothing less than existential war against the whole concept of terrestrial broadcasting itself.

If NAB keeps pushing this agenda, the missive warns, CEA will “continue to point out the following”:

“Radio is a legacy horse and buggy industry trying to put limits on innovative new industries to preserve its former monopoly. The industry’s refusal to innovate to the benefit of consumers raises questions about the ongoing wisdom of broadcaster use of publicly owned spectrum that could better be used for broadband services that serve the public interest.”

And:

“Many local radio stations are unmanned, particularly at nights and on weekends, rendering the alleged emergency alert benefit of FM tuners in mobile phones unreliable and raising questions about the wisdom of permitting such unattended operation.”

And:

“At a time when popular new digital media platforms like satellite radio and online music services are required to pay performance royalties to copyright owners, it is unclear that the royalty exemption for broadcast radio stations can be justified. Indeed, fairness requires that the royalty rate paid by broadcasters should be the same as that assessed to online music streaming services and other new technologies.”

This deal may already have come and gone, but the idea that the NAB would consider this a priority is in itself telling of whose best interests are in mind. So… First we make them put in an FM chip, then maybe we’ll go with TV. Wonder of wonders, could an HD chip be in the works? Yeah, right. Maybe sometime after the phaser is installed, or maybe the teleporter beam.

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One Response

  1. The CEA pointed out that virtually no Congressmen would support any type of FM or HD chip mandate. Legally, no one, including broadcasters, could be forced to pay iBiquity royalties and licensing fees. The FCC is against a mandate. Many of the NRSC/NAB Board Members are investors in iBiquity, so the NAB is wiling to throw the entire radio industry under-the-bus to get an HD chip mandate, then iBiquity would have an excuse to try and go IPO, if that is still possible.

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