NAB Opposes Zone Casting

The National Association of Broadcasters has come out strongly against the idea of changing the FM booster rule to allow geo-targeting. It says such a change could undermine the very business model of U.S. radio.

The NAB filed comments to the Federal Communications Commission on the proposal from GeoBroadcast Solutions.

The Notice advances a Petition for Rulemaking, which has developed technology to enable FM radio broadcasters to use boosters to air geo-targeted content, independent of a broadcaster's primary signal, within different portions of a station's market (aka ZoneCasting). After a review of the Notice, NAB wrote it strongly opposes revising the booster rule.

NAB wrote that a close review of the Notice suggests that rather than bolster the industry's economic outlook, GBS's proposal would instead "undermine the industry's fundamental business model." "The vast majority of broadcasters -- from a wide array of perspectives -- agree that permitting program origination on boosters will almost certainly drive both advertising rates and revenues down even further as advertisers push to purchase geo-targeted ads," writes the trade group.

The outcome is unavoidable, given the obvious business incentives for advertisers to purchase spots that cherry-pick what they view to be their most desirable customersand at a lower cost.Further inspection also leads to the inevitable conclusion that broadcasterswill not be able to recoupsuch lossesthrough sales of any additional spot inventory that is created on boosters.

"Based on their considerable advertising expertise, most station owners predict that existing advertising customers will likely substitute, rather than supplement, market-wide ads with cheaper, geo-targeted ads. They also agree that potential sales of geo-targeted ads to new customers are purely speculative. Broadcasters do not by and large see pent-up demand by small businesses in their local markets that have not previously purchased advertising time, and even if such demand exists, it would not be economical to undertake the substantial investment to capture the additional business.

"Stations would be forced to hire and retrain sales staff and implement sophisticated systems for managing ad inventory and maximizing revenues. Revising the booster rule could therefore devastate radio net revenues, hampering stations'ability to serve listeners. Moreover, this proposal comes at a time when broadcasters are already reeling from the financial impact of the COVID-19 pandemic and competing in a slowing advertising market against a growing array of digital outlets. It is far too risky at this point to introduce a new product that could further destabilize a critical industry," wrote NAB.

"Today's filing of comments marks the beginning of an active debate on innovation in the radio industry," said Robert Udowitz, a spokesperson for GeoBroadcast Solutions. "Some parties oppose new technologies and innovation, and that is a familiar story for those who have watched broadcast media evolve over the decades. However, a broad range of large and small stations and broadcast groups, the advertising community, and minority coalitions, have indicated their desire to embrace innovation and the future by using broadcast airwaves for a more personal and localized experience."

"The proposed rule change will enable those broadcasters who want to use technology to pursue radio geo-targeting, which we see as the entryway to a potential trove of economic improvement and business opportunities for each broadcaster. We recognize that some parties see only complexities and challenges with this new technology, but we see potential and the ability for the radio industry to finally join other media in the 21st Century to bring more targeted content and enable advertisers to reach specific audiences. The net result has great potential to promote localism and to improve the balance sheet of the industry and we are excited to work closely with the industry to address the benefits and concerns," added Udowitz.