Gordon Smith interview unedited text, archive only, don’t publish

Why does the NAB go to the IBC?

Broadcasting is a worldwide technology as a distribution platform. And being worldwide, it’s developing at different paces in different places, and it’s fascinating for us to see from the United States perspective, where others are leapfrogging us, and where we can make advances in broadcasting as well. The NAB show is where the whole world comes together. The IBC is hemispheric in that it is orientated to the European market and the Middle Eastern market, but people come from all over the world here too.

And so you have some differences in exhibitors, some different technologies being shown here, and it’s a way to stay up with the competition, to learn from others and figure out how we can always upgrade and improve the NAB show as the world’s destination for broadcast technology.

There’s room for both shows. I think they have 50,000 attendees here, we have nearly 100,000 in Vegas, so our show is twice the size of this, but we have great respect for IBC and the role that they play on the European continent and we’ve learned many good things about how to do better in our show by coming here.

Are there any big developments or themes that have jumped out at you so far?

I’ve been focused on the European receiver standards and broadcast standards that they’re using here, which give more capability to the mobile space for broadcasting – that’s where I think Europe is ahead of the United States, because Europe went second in the digital transition – they avoided some of the mistakes that we made. But nothing ever is stationary in technology, and broadcasting in the United States, having gone first, can catch up quickly too. So staying current on the latest and greatest of technology will I think preserve for the United States broadcasters a tremendous future for providing video content to American consumers. So those are the themes that I’ve been looking at – trying to look around the corner of the future, and to be able then to share that with my broadcast members in the United States, so that they can learn how to compete with it, invest in it, adapt to it, for whatever the future holds.

The NAB is keen to get radio broadcast capabilities into mobile phones. Why is this important, and what has been the progress with this?

It’s not easy to get Congress to mandate certain technology – it’s possible, it’s just difficult. And I think the marketplace is doing what the government is slow to do. The marketplace is beginning to adapt radio receivers in cellphones. The cellphone in many respects is the platform of the 21st century. The automobile dashboard is where the radio has always been king, but it’s crowded a bit now, with all the new technologies going into new cars, the radio’s still there but it’s competing with other devices. So we think as the competition on the dashboard gets greater, we need to also be on new platforms like cellphones. And that’s particularly important in emergencies, in situations where you have a hurricane, in a tornado, or an earthquake, a terrorist attack. If you’re just relying on cellphones for information, it’s going to crash, it’ll be congested, it becomes disabled when you need it most. But if a cellphone had a radio receiver that was enabled, you would have the lifesaving information that you needed, in the moment that you needed it. So broadcasting has a reason commercially to get on the cellphone because you increase your listener base and therefore your advertising sale. But there’s a public value in addition to that, which in emergencies can best be provided by radio broadcasting.

Is it difficult making a business case to phone manufacturers?

It’s [radio] free, so we’ve had to provide to them different revenue streams, whereby they get a percentage when you tag music and buy music online or you can do couponing, that they can get a cut of a coupon, when you get it over the radio and go into a store and get a discount, and the telephone company gets part of that action. So those are new revenue streams, but also we admit that when you can get radio for free, as opposed to a stream, which costs you money, free being better than a fee, terrestrial radio is seen as a threat to cellphones. So radio members are investing in an app that Sprint [a mobile provider in the US] has begun to put on their phones, and we think that that will spread because we think when the consumer comes to understand that a stream costs them money and a digital radio receiver is free to them, they will demand it. So we hope it will be adapted because the consumer will demand it over time.

Are there other countries working on enabling phones to receive radio?

Well I think in many countries it’s mandated. It’s not mandated in the US, but I’m told in Europe when you buy a cellphone you’re going to have a radio enabled already in it. I’m told in Europe and Asia it’s a common feature to have a cellphone already enabled with radio reception and not just streaming.

How has digital migration affected small broadcasters in the US?

I would say entirely for the good, because they’re delivering a better product, nicer picture and they’re able to do more within their 6MHz licence. They can have four channels instead of one, and that’s called multicasting. Digital gives them a chance to do mobile if they want to, and I think the public very much appreciates all the offerings that come from digital. And broadcasters are figuring out how to monetise digital content. So it’s been a good transition for us and a very successful one at virtually every level. So other countries that are still waiting to do it – I was part of the US senate when this was implemented, and we set a hard date, and we had to educate the public, we had to make sure the converter boxes were available, and the US government spent about $3bn making sure that people had converter boxes or could get them at a very nominal price, so they subsidised that. The deadline was extended for six months, but it worked – very seamlessly. People’s televisions stayed on, and they like the change.

Do you think there will be a shift in emphasis for broadcasters towards content creation?

I think the key to continued broadcast success is really two things. First is technological – and that is that the architecture of a broadcast signal is so efficient when it comes to video; one to everyone. And that’s irreplaceable. But to reinforce the value of the broadcast signal, coming up with the very best content keeps people’s eyeballs on broadcast and not necessarily alternative providers. And so when you look at the American viewer, the vast majority of what they watch is broadcasting content, not cable content, not satellite content – it’s broadcast, because it’s the best quality. People will always migrate to quality. So our technology is durable and valuable, and our content – if it remains the highest of quality, will have the highest viewership, and therefore the highest profitability. Content is expensive but content is king. People’s time is valuable and they don’t want to watch junk. There’s lots of choice and so people will still choose quality over quantity.

So how will this play out, what will broadcasters make more of, for instance?

It’s hard to predict, but I think clearly... in the United States the focus on localism and what’s happening in the local community becomes an important anchor for individual viewers to tie them to their city and their community. But the thing that drives the highest number of viewers is really good entertainment and sports. And amazingly the weather is a very popular thing to check in with as well. But those are the three things that seem to me to stand out, what keeps broadcasting important and relevant to people’s lives. So I remain very optimistic in the digital age with all the new offerings, the broadcasters have a very bright future, because they’re local, they’re free if you want to get them free. They cover large events, and they’re live. And often I’m asked by regulators or government officials, “Well don’t people want  to watch television when they want to watch it?” The answer is, yes they do. But I also believe they want to watch a lot of things live. So the future is for those who can provide both, who can have flexibility built into their content offering, but be able to accommodate large live events – like sporting events, or emergencies.

What would the CBA gain from visiting NAB?

I think the networking that occurs at NAB has no peer. The coming together of technical knowledge and influential people has no parallel. And I think after a long winter, Las Vegas is nice and warm. So we hope people will come, and Commonwealth Broadcasting specifically because it is a place where the world comes together to learn the latest and greatest in broadcasting technology and content. In fact I would say 40 per cent of our attendees are from different countries, from all over the world. And that’s the magic of Las Vegas as a destination, and at the time of year that we have it, it fits into the cycle of television.


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