Tuesday, June 28, 2005

Will All Boats Rise Together?

There was a time when a primary goal of NPR's pricing models was to strengthen the audience and economic performance of both NPR and its member stations. The idea was that all boats would rise together.

That goal is no longer being met, at least not for every station. Since 2001, at one major market licensee, NPR fees have grown four times faster than listening to NPR News, and twice as fast as the station's total revenue base. An extreme example? Perhaps, but there is other evidence of a disconnect between what NPR wants to charge and stations’ ability to pay.

NPR has repeatedly capped its price increases to soften the financial blow for some stations. Most recently, it had to tap Kroc money to ease the pricing burden.

Is the NPR pricing system broken? That subject calls for a full examination, and is too complex for one article. But the question itself and its implications are pretty serious. NPR's newsmagazines air during drive times, the dayparts that must be the most profitable on a station's broadcast schedule. Because listening to radio is usually greatest then, drive time programming must generate sufficient surplus revenue to fund large chunks of the station's indirect costs. That's the overhead that supports broadcasts and includes items such as engineering, administration, marketing, and innovation. If it can't cover its overhead the station cannot function nor can it compete.

We're starting to see stations with shrinking surplus revenue of drive time revenue. A reduction of that "profit” makes it likely that there are stations running in the red during drive time. If drive time doesn't carry other essential costs the station's entire operation is threatened. That is not a recipe for self-sufficiency.

For all boats to rise together, NPR needs to come up with a pricing model that buoys audience growth and economic self-sufficiency, both at member stations and at NPR.

To stay afloat, station managers must budget appropriately, fundraise well, spend wisely, and continue to strengthen their audience service by making necessary programming changes. They must also help NPR create a pricing model that allows it to grow.

Two years ago, CPB studied station financial health and found financial problems on the rise. We believe part of the problem might be that current newsmagazine program prices are cutting the surplus drive time revenues too thin. It is a topic worthy of additional research. With the right actions, public radio could continue to ride wave after wave of success.

Friday, June 24, 2005

Let The Big Stick Carry You

Yesterday, the House voted to restore $100 million in funding for public broadcasting. The vote was in response to overwhelming public support for this funding. This outcome is a good reminder of the value public broadcasting delivers in just about every community in this country.

That value would not exist without our transmitters. Our big sticks, if you will.

While that seems like an obvious statement, it's a fact that seems to get lost every time a new delivery technology comes along. First, Internet streaming. Then, satellite radio. Now, podcasting. Each comes in with the promise of changing everything. Each settles in to being a nice supplement to our primary service.

The problem is, the main service is often ignored during the honeymoon phase. It's easy to see why that happens. Our broadcast services are mature. Success is achieved through maintenance rather than constant innovation. That's not as exciting as creating something new.

But we have to resist the temptation to go into cruise control on-the-air while we're playing with podcasting, Internet streaming, and satellite radio because collectively, these new technologies will never deliver the reach and impact of our current broadcast signals.

Our big sticks will always carry us as long as their importance is reflected in how we budget our time, creative resources, and dollars. The day we forget this is the day we give Congress a reason to eliminate our funding.

Tuesday, June 21, 2005


With the lobbying effort to protect public radio's federal funding gearing up, now is a good time to remember that public radio's core services should not be dependent on the whims and inconsistencies of Congressional politics. For every hour invested in lobbying, one hundred should be invested in figuring out how to make public radio's core services in every community financially self-sufficient. We owe that to the millions of listeners who count on public radio every day.