2018 Radio Show Expected to Focus on Digital Competition, Subcaps, Interference

Relaxing the subcaps as part of the 2018 ownership quadrennial review would change the whole radio industry, said Wilkinson Barker's David Oxenford. NAB proposed a plan that would relax the FM subcaps and eliminate the AM ones, but many AM broadcasters and iHeartMedia are considered opponents (see 1807050037). Many broadcasters see changes to the subcaps as a chance to either expand their groups or make money selling stations, said radio lawyer Dawn Sciarrino of Sciarrino and Associates. The FCC is expected to begin the quadrennial review toward the end of 2018, and the subcaps are expected to be the highest-profile piece.

Not everyone agrees changes to the subcaps are pivotal to industry. “I struggle to understand where owning more signals is beneficial” in top-50 markets, said Hubbard Radio President Drew Horowitz. With revenue flat and advertising competition heating up, owning more stations could cause groups to slice the pie too thin, Horowitz said. He conceded growth makes more sense in smaller markets. Other broadcasters said consolidation could lead to infusions of outside investment, but Horowitz is skeptical that radio generally shows enough steady growth to entice Wall Street.

The industry’s health and the bankruptcy proceedings involving its largest companies, Cumulus and iHeartMedia, are likely topics of interest in Orlando (see 1803150037). A federal bankruptcy court judge in Houston approved iHeart’s restructuring plan Thursday. Potential spinoffs from those companies’ restructuring effort are seen as possible merger and acquisition opportunities, said Sciarinno. An improved outlook for Cumulus and iHeart is important to the health of the entire radio industry, Horowitz said.

Many radio stations could be affected by several FCC proceedings involving radio interference, said broadcasters, attorneys and engineers. Interference claims among the growing number of FM translators and FM stations consume a great deal of time and resources for both broadcasters and the FCC, said broadcast engineer Tim Sawyer, senior partner at TZ Sawyer Technical Consultants. “It’s a horrible, horrible waste of time.”

Much of the radio industry lined up against an FCC proposal to restrict the distance at which FM stations are able to file interference complaints against translators (see 1809060051). The FCC must reach a solution that works for a wide swath of the industry, said broadcast attorney Michael Richards, who represents the LPFM Coalition. It does nobody any good for issues to be tied up in appeals and litigation for years, Richards said.

An NPRM expected soon on Class A interference protection is expected to be a focus for AM broadcasters, Sawyer said (see 1809200043). Though a proposal for a C4 Class of FM station is seen as on the back burner, it’s still a topic of interest for industry, lawyers said (see 1809110051).

Radio’s ability to handle ad competition from internet companies is extremely important for the industry, said Eagle Communications General Manager Gary Exline. Many radio groups have gone after digital ad dollars by packaging their broadcast ad offerings with complete digital ad services, effectively acting as online ad agencies, he said. Digital spots are “the gorilla in the room,” Exline said.

Digital platforms and tech offer possible additional revenue streams for radio groups, Horowitz said. He expects show attendees to be interested in the rise of smart speakers and digital outlets such as podcasts. The 2018 show has a focus on “big data” and using data to help sell ads, the NAB spokesman said. “It's time for the industry to wake up for come up with a digital solution,” said Press Communications CEO Robert McAllan: “We’re still sitting here as an analog industry.”