A movement in Congress to mandate FM radio tuners in all cell phones could give a big boost to local radio stations.
Emmis Communications Corp. Chairman Jeff Smulyan, who has been the radio industry point person for the mandate for three years, expects Congress to begin debating the issue in earnest this fall and thinks it could end up in a bill before year’s end.
Including tuners in cell phones would make radio accessible through 286 million U.S. cell phones, about 2 million of which are in central Indiana. Smulyan thinks tuners in cell phones could boost radio listening as much as 15 percent.
“People simply don’t want to carry two hand-held electronic devices, and the cell phone is what they’re carrying,” said Smulyan, whose company operates local stations WLHK-FM 97.1, WYXB-FM 105.7, WIBC-FM 93.1 and WFNI-AM 1070, as well as stations in six other U.S. markets.
“It puts us into a new environment, outside of the car, home and office, and I think that opens a lot of opportunities for the radio industry.”
Rick Green, market manager for the Indianapolis stations of San Antonio-based Clear Channel Radio, thinks radio-cell phones could have an immediate impact.
“We think if radio is available through cell phones, it will pretty quickly have an impact on [listener] ratings,” Green said. “That will make a difference with advertisers.”
With the growth of cable and satellite television and the development of such devices as the iPod and satellite radio, over-the-air radio stations have seen ad revenue declines between 15 percent and 25 percent in the last three years, according to New York-based BIA Financial Network Inc.
Smulyan said he has talked to more than 100 congressmen about the issue, and the response has been overwhelmingly supportive. The selling point is radio’s ability to communicate emergency information—via the Emergency Broadcasting System—to cell phone users, he added.
“The cell phone has become a lifeline, and the inclusion of a radio tuner can be a part of that,” Smulyan said. “There’s a lot of momentum for this. It’s an idea whose time has come.”
Scott Uecker, general manager of WICR-FM 88.7 and a University of Indianapolis communications instructor, said there are several reasons the mandate is a good idea.
Uecker points out the inclusion of an FM tuner on certain iPod models over the last year has been surprisingly popular with young audiences. Uecker points out that an FM tuner chip costs only about 30 cents. A chip that would allow an AM-FM tuner is too expensive, but Uecker said it could be improved and become cost-effective within a few years.
Of course, there are commercial applications, too. Not only do radio stations have the opportunity to grow their audience, there are possibilities to add functions that allow cell phone—and iPod—users to download songs instantly.
The commercial potential is great enough that the idea of an FM tuner in cell phones has gained the support of the musicFirst Coalition, which includes musician unions and the recording industry’s major trade groups.
Electronics manufacturers, however, say the idea is loaded with static.
“Forced inclusion of an additional antenna, processor and radio receiver will compromise features that consumers truly desire, such as long battery life and light weight,” said Consumer Electronics Association President Gary Shapiro.
Robert Unmacht, principal of iN3 Partners, a Nashville, Tenn.-based media and investment banking consultancy, thinks free-market principles, not a congressional mandate, should dictate cell phone and radio developments.
“This is a good marketing story for Jeff Smulyan and the rest of the radio operators, but I just don’t think the consumer demand for this is there,” Unmacht said. “If the consumer demand is there, the products will be developed.”
“How many times have you not wanted a technology until it’s there, then you realize how nice it is?” Uecker said. “The inclusion of [FM] tuners in cell phones and iPods has the ability to make radio cool again for the young audience.”
Smulyan thinks demand for cell phones with tuners already exists.
“Many cell phones already have the chip available, but cell phone companies turn them off,” Smulyan said, adding they do that because listening to free radio takes away from time consumers might spend using billable minutes on cell phone calls or text messaging.
Green said there’s clear proof cell phone users want radio through their devices. In the last two years, Clear Channel, which operates WFBQ-FM 94.7, WRZX-FM 103.3 and WNDE-AM 1260, developed the iheartradio software program for cell phones that allows users to tune in Clear Channel stations.
“Clear Channel has seen millions and millions of downloads of our app in less than two years,” Green said. “There’s unquestioned demand. And a tuner just makes it easier for cell phone users to get local radio.”•