S. HRG. 110–1117 THE FUTURE OF RADIO HEARING BEFORE THE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION UNITED STATES SENATE ONE HUNDRED TENTH CONGRESS FIRST SESSION OCTOBER 24, 2007 Printed for the use of the Committee on Commerce, Science, and Transportation ( U.S. GOVERNMENT PRINTING OFFICE 73–787 PDF WASHINGTON : 2012 For sale by the Superintendent of Documents, U.S. Government Printing Office Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800 Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001 VerDate Nov 24 2008 10:21 Apr 18, 2012 Jkt 073787 PO 00000 Frm 00001 Fmt 5011 Sfmt 5011 S:\GPO\DOCS\73787.TXT SCOM1 PsN: JACKIE SENATE COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION ONE HUNDRED TENTH CONGRESS FIRST SESSION DANIEL K. INOUYE, Hawaii, Chairman JOHN D. ROCKEFELLER IV, West Virginia TED STEVENS, Alaska, Vice Chairman JOHN F. KERRY, Massachusetts JOHN MCCAIN, Arizona BYRON L. DORGAN, North Dakota TRENT LOTT, Mississippi BARBARA BOXER, California KAY BAILEY HUTCHISON, Texas BILL NELSON, Florida OLYMPIA J. SNOWE, Maine MARIA CANTWELL, Washington GORDON H. SMITH, Oregon FRANK R. LAUTENBERG, New Jersey JOHN ENSIGN, Nevada MARK PRYOR, Arkansas JOHN E. SUNUNU, New Hampshire THOMAS R. CARPER, Delaware JIM DEMINT, South Carolina CLAIRE MCCASKILL, Missouri DAVID VITTER, Louisiana AMY KLOBUCHAR, Minnesota JOHN THUNE, South Dakota MARGARET L. CUMMISKY, Democratic Staff Director and Chief Counsel LILA HARPER HELMS, Democratic Deputy Staff Director and Policy Director CHRISTINE D. KURTH, Republican Staff Director and General Counsel PAUL NAGLE, Republican Chief Counsel (II) VerDate Nov 24 2008 10:21 Apr 18, 2012 Jkt 073787 PO 00000 Frm 00002 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\73787.TXT SCOM1 PsN: JACKIE C O N T E N T S Page Hearing held on October 24, 2007 .......................................................................... 1 Statement of Senator Cantwell .............................................................................. 1 Prepared statement .......................................................................................... 1 Statement of Senator Dorgan ................................................................................. 2 Statement of Senator Inouye .................................................................................. 15 Statement of Senator McCaskill ............................................................................. 3 Statement of Senator Snowe ................................................................................... 16 Prepared statement .......................................................................................... 16 Statement of Senator Sununu ................................................................................ 52 WITNESSES McCaughan, Mac, Co-Founder, Merge Records .................................................... 3 Prepared statement .......................................................................................... 6 Pierson, Carol, President and CEO, National Federation of Community Broadcasters ......................................................................................................... 38 Prepared statement .......................................................................................... 39 Rehm, Dana Davis, Senior Vice President, Strategy and Partnerships, Na- tional Public Radio ............................................................................................... 42 Prepared statement .......................................................................................... 44 Turner, S. Derek, Research Director, Free Press; on Behalf of Consumers Union, Consumer Federation of America ........................................................... 22 Prepared statement .......................................................................................... 24 Westergren, Tim, Founder and Chief Strategy Officer, Pandora Media on Behalf of the Digital Media Association ............................................................. 17 Prepared statement .......................................................................................... 18 Withers, Jr., W. Russell, Founder and Owner, Withers Broadcasting Compa- nies, on Behalf of the National Association of Broadcasters ............................ 8 Prepared statement .......................................................................................... 9 APPENDIX Letter, dated November 15, 2007 from the Future of Music Coalition to the Senate Committee on Commerce, Science, and Transportation ................ 59 Response to written questions submitted by Hon. Maria Cantwell to: Mac McCaughan ............................................................................................... 65 Carol Pierson .................................................................................................... 73 Dana Davis Rehm ............................................................................................. 75 S. Derek Turner ................................................................................................ 71 W. Russell Withers, Jr. .................................................................................... 67 Response to written questions submitted by Hon. Daniel K. Inouye to: Mac McCaughan ............................................................................................... 65 Carol Pierson .................................................................................................... 73 Dana Davis Rehm ............................................................................................. 75 S. Derek Turner ................................................................................................ 70 Tim Westergren ................................................................................................ 70 W. Russell Withers, Jr. .................................................................................... 66 Smith, Hon. Gordon H., U.S. Senator from Oregon, prepared statement .......... 59 (III) VerDate Nov 24 2008 10:21 Apr 18, 2012 Jkt 073787 PO 00000 Frm 00003 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\73787.TXT SCOM1 PsN: JACKIE VerDate Nov 24 2008 10:21 Apr 18, 2012 Jkt 073787 PO 00000 Frm 00004 Fmt 5904 Sfmt 5904 S:\GPO\DOCS\73787.TXT SCOM1 PsN: JACKIE THE FUTURE OF RADIO WEDNESDAY, OCTOBER 24, 2007 U.S. SENATE, COMMITTEE ON COMMERCE, SCIENCE, AND TRANSPORTATION, Washington, DC. The Committee met, pursuant to notice, at 10:02 a.m. in room SR–253, Russell Senate Office Building, Hon. Maria Cantwell, pre- siding. OPENING STATEMENT OF HON. MARIA CANTWELL, U.S. SENATOR FROM WASHINGTON Senator CANTWELL. Good morning, the Senate Committee on Commerce, Science, and Transportation will come to order, and we’re having a full Committee meeting this morning on the future of radio. We are joined by Carol Pierson, President and CEO of National Federation of Community Broadcasters, welcome. Ms. Dana Davis Rehm, Senior Vice President for Strategy and Partnerships from NPR, thank you for being here. Mr. S. Derek Turner, Research Di- rector for the Free Press, thank you very much. Mr. Tim Westergren, Chief Strategy Officer and Co-Founder of Pandora Media, I’m sure we’re going to hear more about what that is, thank you. And, Mr. Mac McCaughan, Founder of Merge Records, and member of Superchunk, and Mr. Russell Withers, Founder and Owner of Withers Broadcasting, on behalf of the National Associa- tion of Broadcasters. Welcome, all. This morning we are scheduled to have a vote at 11:00 which may be followed by a couple of votes, so I’m going to forego my opening statement and submit it to the record so that we might hear from you, and maybe even get to a question and an- swer period before that. But I’ll see if any of my colleagues wish to do the same, or to make an opening statement. [The prepared statement of Senator Cantwell follows:] PREPARED STATEMENT OF HON. MARIA CANTWELL, U.S. SENATOR FROM WASHINGTON I want to welcome everyone to the hearing on the future of radio. I want to thank Chairman Inouye and Vice Chairman Stevens for calling this important hearing. Radio remains a vital means to inform and educate listeners throughout the coun- try as well as serving to entertain them. Today, consumers have an overwhelming number of choices on how to spend their leisure time. Radio is but one among many choices consumers have and over-the-air radio broadcast is but only one means for distributing audio programming to listeners. There is also satellite radio, Internet radio, podcasts on iPods and MP3 players, as well as downloads on wireless phones. Consumers also can receive audio channels (1) VerDate Nov 24 2008 10:21 Apr 18, 2012 Jkt 073787 PO 00000 Frm 00005 Fmt 6633 Sfmt 6621 S:\GPO\DOCS\73787.TXT SCOM1 PsN: JACKIE 2 with subscriptions to cable or satellite television service. And they can always listen to CDs or old cassettes and albums. As the lines of traditional radio get blurred and the digital delivery of audio pro- gramming occurs over an increasing number of platforms, consumers will have more choices than they know what to do with as to what they listen to, how they listen to it, when they listen to it, and where they listen to it. But it is not going to all happen overnight. Unlike the transition to digital tele- vision, the transition to digital radio is voluntary. And there are still critical details that need to be worked through. For that reason alone, terrestrial radio will continue to play an essential role for