Prepared Remarks of David K. Rehr at The NAB Radio Show

CHARLOTTE - NAB President and CEO David K. Rehr delivered the opening keynote during the state of the industry address at The NAB Radio Show in Charlotte. Below is a transcript of his prepared remarks:

Good morning, everyone.

Few people have not experienced the power of radio - the way it can bring up dramatic images in our minds…the way it can make us feel connected to others.

And the powerful reach it can have.

Throughout history, radio has been the torch of freedom. It has connected and enlightened people. And, it has made us listen and changed our lives.

What is it about radio that connects us to family, friends, neighbors and people we don't even know? It is the power of audio - the music, words and voices that flow from radio that compel us to listen.

Radio informs us. It entertains us. And at times, it even shocks us.

How can we forget the radio broadcast of H.G. Wells' "The War of the Worlds" in 1938?

Millions of people were gripped by the sounds and images of aliens inhabiting the Earth.

Let's now listen to a clip of that unforgettable program.

Indeed, the words that we hear on radio have an impact on us.

We know full-well the power of words.

Those of you who attended the NAB convention in Las Vegas this spring may have heard me talk about the power of words and how broadcasters must realize their importance in framing the debate.

The terms we use to describe our community make an impact on how we tell our story. Now, we must take this strategy and apply it to radio.

We must find the right words to communicate radio's importance to listeners, advertisers and to every American.

Let me tell you why this is critical.

This is an important moment for radio. We must decide: Do we want to keep moving forward or stay behind?

We find ourselves in the midst of an exciting and dynamic period for radio. With new digital technologies, radio is on the verge of reaching greater heights and becoming more relevant.

And we must realize that the words we have been using to define us no longer work.

We've been using the term "terrestrial radio."

But that doesn't mean anything to consumers. Nor does the term accurately define radio.

As you know, radio reaches more than 233 million people in America each week.

So, what does "radio" mean to America?

Answering this question is at the very heart of why we're all here today.

We have to get to the bottom of this question if we are to raise radio's image and remind listeners why it's so important.

In our quest to find answers, NAB, in cooperation with the Radio Advertising Bureau - the RAB - and the HD Radio Alliance embarked upon an unprecedented study involving thousands of Americans.

We enlisted the services of Kelly O'Keefe and his team at O'Keefe Brands to help us fully understand radio as a brand and to unite the entire business. Now, if you haven't heard of Kelly O'Keefe, let me tell you about him.

He is at the forefront of brand strategy. From Wal Mart to Sesame Street and Home Depot, he has demonstrated his innovation and creativity in refreshing and redefining familiar brands.

Kelly will give a more detailed presentation of his research findings after this session.
I hope you will join us for what promises to be a very enlightening and insightful look into radio.

But right now, I want to share with you some of the topline findings.

First, Kelly and his team managed a very thorough research project - reading hundreds of reports, thousands of articles and conducting surveys.

He interviewed radio insiders, media buyers, press and analysts. They also conducted man on the street interviews, fielded a dozen consumer focus groups and interviewed over 5,000 Americans.

And from all of this research, we discovered some great news.

Participants in the focus groups overwhelmingly stated that radio is very important in their lives.

This was confirmed in the survey data as well. More than 80 percent believe radio is
very important.

And, nearly all said they rely heavily on radio to easily connect to a diverse world of entertainment and information, no matter where they are.

This confirms what we've known all along: Radio matters to listeners.

Listeners like radio's convenience. They can listen to it in their car, while they're at their desk at work, on the beach, and even in the shower.

Radio is everywhere.

And listeners value the diversity that radio provides. The research confirms that whether it's hard rock, hip hop, sports, country or news talk - to name just a few - listeners can find something to engage them on radio.

But here's some news we all need to digest and unite to confront.

Many listeners acknowledge that they take radio for granted -- precisely because it's so pervasive. And as result, listeners don't really think about radio's value and importance.

Listeners also believe that many stations could do a better job of playing a wider variety of music. And some perceive a trend towards less format diversity.

We must correct these misguided perceptions about radio and share the real news that will excite America.

Here's the big news: Today, we are unveiling what we're calling the Radio 2020 initiative.

As we near commercial radio's 100th anniversary in 2020, this initiative will be our roadmap to building radio's future.

Where we go from here is being packaged into a cohesive, branded program that NAB and our partners - RAB and the HD Radio Alliance - will champion.

Radio 2020 will not only address our greatest challenges, but will also guide us on how to explore our greatest opportunities.

Let me lay out some of the key initiatives of Radio 2020:

1. Accessible technology:
We will strive to ensure that radio is on new, emerging technologies. It's our job to make sure broadcast signals are available on every gadget, everywhere.

2. Playlist variety and format diversity:
Radio is reacting to what consumers seek, launching different formats, expanded playlist selection, and increased local control.

But, we need to do a better job of informing listeners about the great variety that radio already provides.

And, our partners at the HD Radio Alliance are helping in this effort by promoting HD Radio. We have joined them in this effort by spearheading a campaign targeting auto makers and dealers.

And thanks to the good work of Peter Ferrara and his team, they have just announced that Ford Motor Company will offer HD Radio across next year's models. So, we know at least Ford will be fully equipped.

3. Building for the future:
We must continually seek ways to meet the demands of our consumers -- encouraging more variety and diversity, spurring more innovation in electronics and helping marketers develop even more innovative and compelling advertisements.

4. Reigniting consumers:
Ironically, the theme of this year's Radio Show is "reigniting radio." And that's why it's a seminal moment for all of you to be here today.

We must remind the public why they value radio to reignite their passion for it.

Think about this: You don't have to be wealthy to own a radio. In fact, you can buy one for a buck. You don't have a subscription fee with radio. And, you don't have to be stationary to listen to radio - it's in your car, MP3 player or headphones.

What listeners love most, and what radio must promote, is how accessible, ubiquitous and easy to use radio is.

Radio's value lies in the fact that it's accessible - it's everywhere and portable. It's a medium where everyone can freely and easily connect to a diverse world of entertainment and information, anywhere and everywhere.

If we don't tell this story, we let our critics voice their negative opinions about radio.

That must end.

Our efforts must start by giving ammunition to radio's loyalists. And all of us in this room can play a great role in this mission going forward.

We need you to be evangelical about Radio 2020, and talk to as many people as possible. Repeat it to yourself, to your colleagues and to your family.

You are leaving here today with some fun items. But, when you get back to your office, there will be an outline of the Radio 2020 plan in your email inbox.

I hope you will read this and forward it to your employees and to as many people as you know. This will give us immediate radio industry coverage. And you will hear more about this initiative as we move forward.

We hope you'll join us in achieving the goals that we've set in this quest for radio.

As we are uniting in our understanding of radio as a brand, we must also stand united in tackling the challenges we face in the nation's capital.

Right now, we are engaged in numerous legislative and regulatory issues affecting radio broadcasters.

I want to focus on three today:

1. The attempt to impose a performance tax on radio.

2. Efforts by Sirius and XM Satellite Radio to become a government sanctioned monopoly.

3. The Copyright Royalty Board's terrible decision on Internet royalty rates.

First - the attempt to impose a performance tax on radio.

The big record labels are spinning the same old tune to Congress - asking them to impose a tax on radio to line the pockets of international record executives.

We can't and won't let that happen.

We're actively meeting with congressional members, engaging in paid advertising and mounting an aggressive grassroots effort to defeat any attempt to impose a performance tax.

For many decades, radio and the record labels and artists have held a mutually beneficial relationship that has worked well - free play for free promotion.

Radio is the labels' and artists' number one promotional vehicle - a fact recognized by Congress time and time again.

Radio airplay has turned unknown artists into mega-stars, driving countless fans to buy their music or attend their concerts.

You know it, because you do it every day.

This performance tax would destroy radio's ability to serve their communities and deliver the news and important information. And, by their own actions, the record labels are hurting new and emerging artists.

Our opponents are viscerally against us calling this a performance tax.

But this is where we must remember the importance of carefully choosing our words to frame the debate.

What we're talking about is a government-mandated levy on radio. By every definition, this is a tax.

This ad is running right now.

And it's a reminder that we won't back down on calling this what it really is - a performance tax.

Second - the efforts by Sirius and XM Satellite Radio to become a government sanctioned monopoly.

Seven months ago, the only two satellite radio companies announced their plan to merge into a monopoly.

NAB threw down the gauntlet.

We will continue to voice our concerns that this is a duopoly -- two companies in a market -- trying to become a government sanctioned monopoly -- one company in a market.

Granting this monopoly, violates FCC rules and precedent, congressional policy and antitrust principles and would undermine audio content competition, not enhance it.

In their latest desperate attempt to gain favor with the FCC, XM and Sirius say they will offer a so-called "a la carte" pricing plan if they are allowed to merge.

But here's the problem.

This plan will end up costing consumers more. Consumers would also have to shell out more money for new equipment to be able to subscribe. And what is preventing the two companies from offering an "a la carte" plan right now?

You guessed it. Nothing.

No matter how they slice it, the "a la carte" plan will cost consumers more, and offers no reason for the FCC to change its policy.

NAB will continue to oppose this attempt to grant the only two satellite companies, which currently compete with each other, a government sanctioned monopoly.

Three -- the Copyright Royalty Board's terrible decision on Internet royalty rates.

As you know, in March, the Copyright Royalty Board, or CRB, announced it was increasing rates by an outrageous 138 percent in four years.

This decision threatens to bring a dramatic stop to a new medium still in its infancy - radio streaming.

NAB supports a comprehensive approach to addressing this problem.

Personally, I was extremely disappointed when SoundExchange - after 13 weeks of silence - dismissed our "good faith" offer that we made in June.

It was a reasonable offer that was a win-win for both parties.

SoundExchange's reluctance to come up with a reasonable solution will only hurt their artist members. If radio cannot stream, then new and emerging artists lose another valuable platform for exposure and lose compensation.

We all know we have a lot of challenges in Washington, but we are ready to advance the interests of broadcasters.

And, with all of these great challenges ahead of us, it is imperative that we stand united behind Radio 2020.
Our collective passion for this business unites us and defines us, regardless of our station and market. And now, the time has come to unleash our great passion. We must use our passion as a source of energy that will help us build the future.

Let me end with this:

On the night before Christmas in 1776, General George Washington led his troops across the Delaware river. They faced horrendous conditions - raging winds, snow, sleet and rain. To add to their troubles, a large number of American troops had to march through the snow without shoes.

This followed a year of numerous defeats and the light of the revolution was about to be extinguished.

At his desk by candlelight, facing the end, Washington scribbled three words on parchment, "victory or death."

Obviously, in the battles that we face, individually, we are not in a life or death situation. But from this story, we can gain inspiration and remember the fighting spirit of our forefathers.

Yes, we will ask more from you. Yes, we will expect more from you. Yes, you will expect more from others in radio.

But standing together aggressively facing the future, we will bring a great victory to this great industry.

Remember: Victory or death.

God bless you. And God bless this great country.

About the NAB Radio Show
The NAB Radio Show is the largest annual convention for radio. This year's show, Sept. 26 - 28 in Charlotte, features interactive sessions, special events and exhibits and is co-located with the R&R Convention.

More information about The NAB Radio Show is available at www.nabradioshow.com.

About NAB
The National Association of Broadcasters is a trade association that advocates on behalf of more than 8,300 free, local radio and television stations and also broadcast networks before Congress, the Federal Communications Commission and the Courts. Information about NAB can be found at www.nab.org.