Here Lies NAB's David Rehr: RIP (Radio In Peril)

Here lies David Rehr. Just over three years running NAB, and today he "resigned." Did he jump, or was he pushed? This is a sad day for broadcasters.

When they hired the "beer lobbyist," I was not sure he was the right guy. After all, he had no knowledge or experience in radio or television, and could easily become a puppet of his executive committee to execute their initiatives like a good soldier. But a good, experienced soldier should be willing to look his superiors in the face and challenge their directives, should they be misdirected.

Though I think Rehr exhibited good management skills and good industry leadership, I've never had the confidence that he could "push back" against the directives of his board, should he have a differing opinion about what is best for our industry. Clearly, Rehr has the guts to push back, but -- unlike Eddie Fritts -- he lacks the industry experience to know what is best for broadcasters when his board is wrong.

This is the single reason NAB needs a BROADCASTER at its helm. Yet NAB is a lobbying organization, and most broadcasters cannot navigate Washington like a great lobbyist. What Rehr lacked in broadcast experience, he made up in lobbying ability. Rehr was the Tiger Woods of lobbying.

But can a lobby with deep Republican roots succeed in this new Congress after the election of President Obama? Perhaps Rehr realized his limitations and decided to bail while he could. Perhaps he will run for office. Or perhaps he realized he could not win the performance tax issue and his board did not want to hear suggestions about negotiating to avoid the coming bloodbath.

Herding Cattle

A couple of weeks ago, while lunching with a friend at NAB, I was asked for some of my predictions -- one of which was, "Sadly, Rehr will be gone soon." When asked why, I suggested that there are so many critical industry issues on the table that he is likely to be the fall guy if broadcasters lose, and that being the head of NAB is akin to herding cattle with differing agendas, resulting in high levels of frustration.

Though Rehr never lacked professionalism or alluded to any dissatisfaction in his job, it's clear that the industry is not following his leadership. (Will broadcasters follow a hired-gun lobbyist with no broadcast experience?) When you have issues on the table that could literally kill an industry, such as the performance tax and, more importantly, freedom of speech, industry participation is a must. Yet that participation is lacking. Insiders tell me that few broadcasters have contacted their congressional representatives to explain the danger of the performance tax, despite constant urging by NAB.

Consumed With Survival

Broadcasters are consumed with survival on the financial side and ignoring their critical role in addressing issues related to the performance tax and freedom of speech, which is going to be the BIG battle forthcoming. We, as an industry, are not playing the critical role in "working" the halls of Congress, and the NAB cannot do it alone. There was a day when every group head knew every Congressman and every FCC commissioner, but how many can take time away from their desperate survival issues to play that critical role today?

Has the NAB executive committee lost the fire in its belly, become overly impressed with its power and perks and increasingly out of touch with reality? Are they so consumed with financial issues to the detriment of free speech issues? Are they consumed with defensive actions to keep "new technologies" like satellite radio away (yeah, that worked) or promoting limp offerings like HD Radio rather than embracing change and finding ways to adapt? Is it time to revisit the succession from NAB and the return of the National Radio Broadcaster's Association because the agenda and directives from the powerful TV membership are in conflict with radio?

Serious Danger

It really does not matter if David Rehr was pushed or jumped. The end result is the same. We have lost a critically important leader at THE MOST DANGEROUS TIME IN HISTORY FOR RADIO. Momentum and leadership will be lost, no matter how good those who step in to fill his shoes are. The only person who could step in without momentum loss would be Rehr's predecessor, Eddie Fritts, but these are different times and even that might not work. Plus, why go back to the past? I can imagine our opposition at the record labels throwing a champagne party right now over Rehr's resignation. Does the NAB executive committee understand strategy and war?

Clinging To Our Turntables

To the radio industry: NAB and RAB can continue to seek out and hire thoroughbreds, but if we don't follow their direction, if we don't take their advice, if we fail to adhere to their visions, we will continue to play musical chairs with our future. We hire these people pretending to want change, yet when we're faced with taking action inside our stations, we resist it. This, more than anything, is why radio isn't morphing into the "future" (actually the present), which it has so deeply missed. We cling to our 1970's turntables and transmitters hoping things will get back to the "gravy" days when things were better. We talk about change, but our actions say loudly that we're set in our ways.

Our appointed leaders like Rehr and RAB's Jeff Haley can only do so much. At some point, they rely on the broadcasters to follow their lead. Instead, they receive different directives from many different directors who like to throw their membership weight and checkbooks around like cannonballs.

Marriages are two-way, and both parties must participate in the unified direction of the family. Unity is lacking, and as a result we're losing David Rehr, and I fear we could eventually lose Jeff Haley for the same reasons. After all, if you put thoroughbreds in a kiddie park and lead them around with a rope, they'll eventually break out to find a real race.

Radio's Biggest Boxing Match?

If there is a magic "control Z" in life like the undo command on our computers, allowing us to reverse stupid mistakes, we should hit it now, write a big check, get on our knees and beg, and do anything in our power to get David Rehr back. This is no time for bruised egos. There may be a time for Rehr's departure, but not when we're in the middle of the boxing ring in the most important tournament of our history. This action is unconscionable.

If Rehr resigned, shame on him for doing it at this moment in time. If he was pushed out, then the executive committee at NAB made the timing mistake of their careers, and it will cost radio for the rest of its days.

Eric Rhoads

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[Matt Hackett]

Clearly I don't know the reason for his departure, but from what I've seen of him, his writings and his speeches at broadcast conferences, he is not the man we need at the NAB. You are correct in calling him the Tiger Woods of lobbyists - but what skill-sets does that title entail? Taking an issue, translating it into the most emotional black and white terms possible and committing full and unrelenting focus on bashing everyone with any influence over the head repeatedly with the same talking points.

When it came to the performance royalty / tax issue, he was content to follow the usual lobbyist formula; demonize the opposition (a tax levied by foreign corporations?), make victims out of our constituents (this will kill radio) and shout these simplifications louder than anyone else.

Unfortunately all the issues that radio faces are many shades of gray and turning them into emotionally charged rights and wrongs not only misrepresents our industry, but damages our ability to solve our problems.

The NAB has missed a once-in-a-lifetime opportunity to use the obvious panic of the record companies to its advantage. Sure, performance royalties have been beaten back by radio before - but always in a time when the 'promotional value' of radio actually was tied directly to a measurable sale - a time when record companies and artists could actually rely on selling truck loads of stuff - real, live, tangible stuff like LP's and CD's at ridiculous mark-ups. In this new digital age, this kind of 'stuff' is not going to get sold. The new value chain is very simple, but it seems radio and even the record companies don't quite get it; anything you can hold or touch is a thing and can be bought and sold directly - anything you can't touch isn't a thing and must be bought and sold as a service instead.

In this new paradigm, the actual sale of individual songs, whether albums or singles, is only going to go down. Even today, most successful artists make their money from live performances and royalties from the use of their music in advertising, movies and public places. The 'songs' have become promotional vehicles, not for the subsequent albums, but for the tours and ringtone downloads and calendars and screensavers and T-shirts; and possibly even for paid access to the band's 'insider' webpages, blogs and twitter feeds. As new artists develop, their revenue streams are going to be tiny and getting revenue from airplay is going to figure as an important part o their income.

So we face a situation where radio's ability to tie its promotional value directly to measurable stuff like record sales is going to disappear and the record companies are losing traditional revenue hand over fist. The NAB's reaction? Call them dirty foreigners and refuse to negotiate.

The radio industry needs leaders who can see what's coming and use it to our best advantage. Instead of our lobbyist mentality "Just Say No" policy, how about reaching out to the record companies and using performance royalties to get something we actually need;

Like a deal brokered with Apple to create a technical interface which automatically puts a local station's playlist up on iTunes and allows that station to take a cut of each song sold?

Like including complete, unfettered Internet music streaming rights as part of the performance fee?

Like negotiating radio stations a cut of the ticket sales for concert tours or a cut of the tour sponsor's spend to go directly to radio airtime?

Like getting artist-related web content made by the record labels that's only available on radio station web sites?

Or, if that's all too hard, why not offer to have a separate agency set up to collect a flat-rate performance royalty and distribute it direct to artists in the same way that BMI and ASCAP do for songwriters, cutting out the labels altogether - and then see how willing they are to negotiate?

It is unbelievable that at the very same time time the RAB invites Chris Anderson to keynote its conference and talk about his 'Long Tail' theory, the NAB is ignoring every lesson there is to learn from that theory and trying to represent radio's interests the same way you would some old-fashioned, tangible consumer product like, oh I don't know, beer?

The 900 pound gorilla in the room is that the issues of the Performance Royalty Tax / Fee and even Free Speech aren't themselves the most important issues for radio's future - but the questions they bring up and the light that they shine on our industry are. These issues are not evils that have to be 'stopped'; they are opportunities for us to look at our industry, see what needs fixing and come up with creative solutions to do just that.

Performance Tax? Right now I'd rather the NAB tried to lobby for a bill that forced Yellow Pages to get consumers to opt-in before receiving the books (on environmental grounds, of course). Right now I'd like the NAB to be working with Google and Facebook to come up with a turnkey solution for turning station websites into Facebook pages. Right now I'd like to be represented by an organization that had radio's interests only at front and center.

Sure, radio's in peril. But it was never going to be fixed by David Rehr or the current setup at the NAB.

[Andrew Deal of CelleCast]

As bad as the timing is for this in regards to the faltering health of radio, what would be a better time?

I agree with other commenters that it might prove that the details surrounding the reason he is gone is more critical than the timing of it. My experience with David Rehr tells me that things can only get better if his replacement really looks to bring media innovators into the fold of the radio culture to create a needed transformation before it is too late.

http://fourthspeaker.com/

[Deb Kauffman]

"If Rehr resigned, shame on him for doing it at this moment in time. If he was pushed out, then the executive committee at NAB made the timing mistake of their careers, and it will cost radio for the rest of its days."

Eric, in lo these many years I've read your ramblings, this editorial is one of the few brilliant sets of words you've put together.

Radio is in complete crisis, now, more than ever. Radio is in danger of either totally dying, or being controlled, as print is, by the government. The Feds are considering a measure to allow newspapers to function as non-profits and therefore controlled by Federal regulations. Now, print is simply quietly agreeing to big government worship.

If Rehr wishes to keep his head, and SOME kind of job in media, he HAD to resign. Our current government regime is keeping tabs on those in the media who agree with it. Or don't. (I'd be happy to send you links on the media elite's "secret" meetings with the Chief of Staff Mr. Emmanuel).

If Mr. Rehr was pushed out, then whaddya expect from the same organization that gave Radio massive consolidation, de-localization of Radio.

I remember in 1999, speaking with an NAB big wig about consolidation and its inherent problems. "Well, in negotiation, you always ask for more than you expect to get. Wow, we got more than we ever expected."

NOW, more than ever, Radio needs to get the LISTENERS involved with keeping Radio, Radio, and local.

Radio is a business, and few outside of Radio realize it. It is also THE most powerful medium. The government knows it, we know it, and how can we keep it powerful?
How are we gonna keep it free of yet more government interference?

Eric, you are in a unique position. USE it.

Radio Guys know what yer saying, now spread it to the people....

Take it to the street.

[Paulette MacQuarrie]

From where I stand, I'm not convinced David Rehr’s departure is a total catastrophe.

It might give radio an opportunity to “get back to its roots” … a sentiment which seems fairly popular in this economy.

I'm also not convinced that "clinging to 1970s turntables" is necessarily a problem. These days 1970s turntables (and vinyl recordings) have considerable cachet amongst music aficionados. :-)

Then again, I'm probably not in a position to opine on industry developments in the U.S. ... being a small, independent Canadian niche broadcaster who has benefitted enormously from the internet, but hasn't yet been able to turn a profit. (Not that it makes me an anomoly in this industry!)

Still, what happens your country ends up impacting what happens in mine. And I certainly hope that the record labels won't get away with this latest blatant tax grab on your side of the border.

All the best, Eric. I really enjoy your writing. The broadcast industry is fortunate to have such an impassioned advocate.

[Frank Boyle]

Eric: Very well said-my compliments. My belief is that NAB's current structure may need to split back to Natl Radio Bureau & NABTV. They're different cultures. The heads of each have to know the history & culture of each. You can't learn enough from scratch. The NAB Boards have to be dysfunctional due to their unwieldy size.--Should be 9 on each. David Rehr is a dynamo who wanted change. He's faulted for being a Republcan. So-NAB appoints a Democrat--and Republicans hate that person. What's wrong with this picture?
Your editorial was right on the button, Eric.

Frank Boyle
may 7 2009

[Jim Schlichting]

Gosh Eric....

You almost said it all when you recalled that at one time every owner knew their local political "clout".

Radio is a local medium. As the current owners count their financial wounds what do they expect when they try to have some influence with their local politicos?

Owners are now so distant from the people their license is supposted to serve that the industry has asked to be ignored.

The industry will get what it has earned. It's too bad that what it has earned is a whole lot less influence where it matters.

[Lorrie]

I agree. BIG loss the NAB. Not sure where Rehr will end up, but I suspect broadcasters will soon be wishing he was back at the helm.

[Jeff Petersen]

A very good editorial Mr. Rhoads.
I wish Mr. Rehr would leave behind a note to someone other than the NAB board explaining -- in detail -- why he was leaving.
He's left broadcasters a lot of questions about his departure and how he feels as an "outsider" about dealing with the managers of the radio industry.
My personal view is that the radio industry is going to lose the battle over performance royalties until Congress and those on the Democratic/liberal side now in ascendancy feel that radio is doing something about the dreadful imbalance of the talk radio business. It's more than "freedom of speech" -- as you put it -- but also "fairness" and respect for those whose views are different than program hosts and the corporations that employ them.
Members of Congress I know think radio is an enemy to them because of the one-sided rhetoric being pushed by broadcasters who are refusing to develop -- and support -- alternative viewpoints and performers to provide balance to the Limbaughs, Becks and Hannitys.

[George A. Freeman]

When I worked for NAB as a regional manager I was able to kill the performers royalty bill in committee before it even reached the Senate floor for debate. This was 1980c. All it took was a letter from the widow of country/pop singer “Gentleman” Jim Reeves. She was the late, courageous Mary Reeves at Nashville, TN. Mary had owned four radio stations; AM/FM combinations in Murphreesboro, TN and in Henderson, TX (which I bought from her in 1973).
Her letter pointed out singers and piano players will see virtually nothing from a performers royalty fee. She pointed out that like ASCAP, BMI, and SESAC most of the income generated out of the hides of broadcasters will go to the new performers royalty organization’s lawyers, ex-football player enforcement types and executives and secretaries. She pointed out also that the broadcaster pays a percentage of his income whether or not he has any profits. She had owned KGRI AM/FM for a decade in TX without seeing a dime in profits so she was well aware of how serious this proposed tax will be.
The major market newspaper ads and flags hanging from the NAB building during Rehr’s tenure were stupid wastes of capital. And they called great attention to a battle that was lost. All it took was a persistent phone call every few weeks from one NAB staffer and Mary did the right thing. It was a target shot on my part. As I recall the bill had been introduced by Tennessee Senator Al Gore. Imagine his face when he saw that letter from his VIP constituent.

George A. Freeman

[Ronnie Rose]

I just finished reading this on David Rehr. It still amazes me at the time people choose to walk away. It's like the preacher that thinks Easter Sunday is a good time to resign his church. I guess the greater the audience, the greater the sense of loss in the departee's mind. With all the issues we face on a day-to-day basis, half the time I don't know whether to "wind the cat or put out the clock." I have stuck to my guns over the years in some pretty difficult situations, so I know that there always seems to be a good time to go, but it was never when my going would have been better for me. When you are where you need to be even when times are tough and you may not succeed, you are still where you need to be. It's called Loyalty!
So David if you don't mind, leave your slingshot for the next person.
Maybe they've got a few smooth stones we can use to knockout the giants we face. By the way, we are working on a Performance Tax and as soon as we figure out what this performance is worth, we'll get back to you.

[Leigh Ellis]

This couldn't happen at the worst time for broadcasters...the industry needs to change we need to be leading technoligy not letting it drive us...my opion...we need a new young blood, new idea people on the NAB Board...the problem starts in this case at the top...same old, same old...look at the board...same old same old...we need new blood like David...we need a David to beat the Goliaths...at the rate we are going our frequencies will be worth more then our recievables.

[Roger Coryell]

If you remember, the NAB was originally asleep at the switch on streaming performance tax issues until it was too late, allowing RIAA to establish this dangerous precedent because "the Internet isn't really our business." Yeah, right.
IMHO, radio and TV combined into one organization makes about as much sense as radio and newspapers combined into one. No sense at all. Our interests are different. Our challenges are different. Radio needs a strong radiocentric organization to tell our compelling stories, and provide leadership.
And the answer doesn't lie with RAB or ibiquity, either. collectively we have to do better amd be smarter than "Radio Heard Here" and lame lo-fi 48k HD Radio sub channels. Those emperors have no clothes, sorry..

[Daniel P Mitchell]

A timely editorial. It is always up to the broadcasters to defend our own turf. Not to contact every senator and congressman in this congress by every broadcaster in radio is just silly and self destructive. We have a lot of selling to do with both clients and congress, or we all will be looking for work. Dan mitchell KMRJ Palm Springs CA

[Ainsley Jarvis]

The radio station baths coming will take some vendors with them down that bloody drain.

Business is so bad that some will even sell to the largest troubled consolidators just to write a sale.

Net-never cash receivables are terms that are breaking out all over. Watch it!

It's time to consider one-easy- payment-terms when you sell to these near-future bankruptcies...

One easy payment,
"Cash with Order!"

[Greg]

I can't wait when the rIAA over-the-air royaltis kil HD Radio, and our airways are clear once again!