Radio’s relevance may come down to smartphones.
Last week, at a House Subcommittee on Communications and Technology hearing about the “Future of Audio,” industry heads faced off about industry standards, evolving technologies and whether FM analog chips should be placed in smartphones, an issue that has brought accusations against radio’s “refusal to innovate” since 2010.
Prominently, the Consumer Electronics Association, representing smartphones, and the National Association of Broadcasters, representing radio, disagree on whether FM analog chips are good for business or good for citizen safety.
Michael Petricone, the senior vice president of governmental affairs at the CEA, told The Daily Caller that having FM chips in smartphones is a “freeloading business model.”
“Rather than competing, what they are doing is going to Congress to mandate their relevance,” he said.
Because of legislation from the 1950s, radio broadcasters do not have to pay royalties on the music that they broadcast. Internet streaming services, like Pandora, Rdio and Spotify, however, do end up paying royalties.
“Fifty percent of my revenues goes to paying royalties,” Tim Westergren, founder of Pandora, said at the hearing.
An FM analog chip could mean that radio would have a competitive advantage over Internet streaming services.
The NAB, however, argues that a large reason for requiring FM chips would be for emergency broadcasts during times of disaster. Their website states, “radio and television broadcasters have been the backbone of the public warning system and remain so today.”
Dennis Wharton, executive vice president of communications at the NAB, told TheDC, “a lot of stuff put out by the CEA is completely false.”
“We’re not seeking legislation; we’re seeking voluntary implementation,” he said. “We are asking Congress to study this issue. How can you be against that?” Wharton also points out that FEMA recommends a radio, not a cell phone network, during times of crisis.
In response to CEA’s charge that there was an economic motivation behind their actions, Wharton simply concluded, “We’re not against making a profit. But we are also invested in having ability to save lives.”
The arguments for safety, perhaps predictably, do not convince Petricone. He says, “Their argument keeps shifting. First they wanted [FM analog chips] because consumers want them and now it’s because of public safety. … They called for a ‘mandate’ in 2010 and 2011 and now they aren’t. The fact that they are asking for ‘voluntary implementation’ is simply an acknowledgment of political reality.”