An interesting and controversial proposal arose from recent negotiations between the National Association of Broadcasters (NAB) and the recording industry.  With the government possibly soon mandating that radio stations pay a portion of their revenues to record companies and artists (laws already require that stations pay songwriters royalties), the NAB is seeking ways to expand the reach of FM radio stations, thus broadening listener bases in an effort to remain relevant and increase revenues to offset future royalty payments.

One proposal suggests that the government require cell phone manufacturers to include FM radio receivers in future phone designs so that users can tune into traditional radio broadcasts as easily as applications like Pandora or services like XM Satellite radio allow smart phone owners to access these modern alternatives to traditional broadcasts.  Although this proposal hasn’t been included in any draft House or Senate bills, its conception alone is alarming.

Government mandates for specific design features in cars is reasonably acceptable because these features vastly improve the safety of consumers.  But requiring specific features in consumer electronic devices simply to appease one party in what is essentially a private sector dispute is unacceptable and a clear case of the government overstepping its legislative bounds.

The NAB suggests that the “requirement would provide a valuable public service — particularly in emergencies, when consumers often tune into local stations seeking critical public safety information.”  While radio may have been the primary means of emergency communication 20 years ago, today social and real time media outlets like Twitter are far more efficient at disseminating information to large populations.

Traditional broadcast radio stations need to fundamentally change their business and operating models to survive, not just flood the market with more radios.  What worked for the last 75 years is not sustainable in the face of modern competitors.

[Via:  MSNBC.com]