Dumb Fight of the Day: Media, Tech Industries War Over Mandatory Cell Phone FM

A National Association of Broadcasters proposal to mandate FM radios in mobile devices, including cell phone handsets, got a chilly reception from the Consumer Electronics Association, whose members would presumably foot the implementation bill.

The NAB has tried to spin this as a pro-consumer "public safety" issue, but it's not. In fact, it's amazing that the NAB can say that with a straight face. Then again, the CEA's fear mongering criticisms have also been so many attempts to put publicly-acceptable lipstick on a commercial pig.

Like the recent secret telecom meetings, the NAB's meetings with the Recording Industry Association of America to get backing for the FM everywhere plan is another industry back room deal. The NAB wants to trade mandatory FM chips in devices to offset the royalty payments to performers that the broadcast industry is about to face, finally joining the ranks of webcasters and satellite radio, which have long had higher royalty payments.

From a purely business sense, you are witnessing horse trading paired with smart negotiating. The NAB has pushed for a trade-off, accepting performance right payments but getting a chance at additional revenue. Its members figure that if everything mobile has an FM radio, there's a chance to claim that at least some people actually use it and, thus, get more money from advertisers. However, that doesn't make the industry sound noble, which, for some reason, many companies assume is necessary for success. As though consumers actually believe it.

The electronics industry, which literally counts fractions of pennies in the cost of parts for something like a cellphone, came out swinging. That's why the NAB has tried to ratchet up its PR campaign with a "fact-based response" to the criticism. As often happens with such documents, its logic is highly questionable. But then, the CEA made some spurious claims as well.

The first criticism is that the NAB wanted to "[prop] up a business which consumers are abandoning as they avail themselves of new, more consumer-friendly options." The NAB fired back that FM radio audience is growing, according to Arbitron. Both sides are right and wrong.

Many people have clearly reduced their time with FM radios and turned to downloaded music, Web-streaming services like Pandora, podcasts, and other Internet-enabled choices. But to pretend that radio is the equivalent of buggy whips after the introduction of the automobile is silly. This is still big business.

And yet, the Arbitron study raises a lot of questions. It claims that radio reaches 93.1 percent of the entire population of the country age 12 or older on a weekly basis:

Despite the adoption of MP3 players and the growth of mobile and Internet-only stations, radio reaches 93.1 percent of Persons aged 12+ each week. Even 91 percent of the youngest radio audience, teens aged 12-17, who are most accustomed to using new technologies and forms of media, continue to tune in each week.

Network radio reaches 87 percent of Adults aged 18-34 who are ad elusive and media multi-taskers, up from 85 percent from one year ago.

This doesn't pass the smell test, particularly if you spend any time around kids. In my experience, they simply don't sit around and listen to the radio. Arbitron doesn't list the questions it asks or bother to define what "reach" means. My guess is that the term must include "Well, we're pretty sure the kids walked by a radio that was on at some point," and "Don't they pay riveted attention to what they're parents play on the car radio while taking them to school?" And let's not forget this important qualifier:
PPM ratings are based on audience estimates and are the opinion of Arbitron and should not be relied on for precise accuracy or precise representativeness of a demographic or radio market.
Fee-paying radio stations use Arbitron to help justify ad rates. The companies studies have an inherent interest in the outcomes they report.

The CEA tries to stir consumer fears, saying that folks would have to "pay more for a function that they may not desire or ever use." Oh, come on, folks, high tech companies regularly add features in the oneupsmanship dance with competitors and as a way to justify higher prices. What would FM reception add? Maybe a few cents to the cost of a device? How much more could it be, given the number of devices that already feature it? But manufacturers know that they couldn't suddenly jack up prices, claiming that radio was the culprit, so they'd be out, and a few cents a unit adds up when you sell tens of millions of products.

The NAB makes the laughable claim that, "when given the choice, consumers like radio-capable cell phones." If that were true, the manufacturers would have already figured it out and made the feature a de facto standard because of customer demands.

Another ridiculous NAB point is that FM radios would increase public safety. True enough, radio can carry emergency information. But the NAB ignores how similar information is available online. Virtually all handsets have browsing capabilities, and there are other sources, like television. If you're out and about, you probably can't help but run into the information you'll need.

This become doubly funny because the NAB pointed to an April tornado incident in Alabama. A picture of a roadside electronic sign directing people to listen to an FM station was supposed to be proof of radio's efficacy. But the sign was for drivers who had radios in their cars and didn't need one in their cellphones, and the station in question -- WQSB, 105.1 FM -- streams its programming online.

Back to the CEA, which claims that mandatory FM isn't needed because "[d]evelopment by the technology industry and government of a mobile broadcast emergency alerting system makes the requirement unnecessary." Of course, the system has been in discussion for years and will only see the first pilot program this fall. In other words, better hope that disasters are scheduled well in advance.

Wouldn't it be refreshing if the two sides could actually say what was on their minds instead of playing transparent positioning games? But then, a precedent like that could turn the entire business world upside down. Truth and honesty? I shudder to think of it.


Image: Flickr user dan taylor, CC 2.0.

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