Monday, March 06, 2006

Time To Consider All Things

Could NPR Executive VP Ken Stern, if given permission, negotiate the same deal for NPR that Howard Stern got with Sirius satellite radio? How about half the deal -- given that NPR's programs would remain on terrestrial radio?

Stern (Howard) is worth a half-billion dollars to Sirius over five years. Perhaps Stern (NPR) could make the case that Morning Edition and All Things Considered are worth $250,000,000 over five years.

To cover the NPR fee, Sirius would need just over 350,000 new annual subscriptions at the $142 annual rate. More subscriptions are needed, of course, in order to make a profit. Roughly triple that to 1,000,000 new subscribers (huge news when H. Stern did it) and you still have not dented the public radio weekly Cume by 5 percent.

I'm certain the math would get a bit more complicated than what's presented above, but it's probably not off by much.

Suppose it could happen. NPR could make its programming, put it on the satellite, and give it to stations. That would be one of the conditions of the deal.

Free, or even almost free, programs to stations would free up lots of cash to create all those new services, local or otherwise, that are supposed to strengthen public radio.

I'm not the first one to make this suggestion. But every other time it has come up, it has been dismissed out-of-hand. This is an idea that could radically restructure public radio for innovation and growth. It's worth thinking about. After all, we are the industry that boasts of considering all things.

6 Comments:

Anonymous Todd Mundt said...

You're an evil man, John Sutton. :) This is worthy of serious discussion, in the spirit of thinking more carefully and strategically about our assets. I don't have a strong opinion either way, but I'd love to hear a vigorous discussion where the defense isn't "this is how we've done it before" and the discussion doesn't just involve myopic station managers.

4:45 PM  
Blogger RadioSutton said...

Thanks Todd. Much of my thinking these days has to do with how we would form public radio's business model if we could create it from scratch knowing what we know today. It's probably a bit pie-in-the-sky to think we could just reinvent ourselves, BUT public radio did exactly that after the NPR financial crisis in the 80s. If we've done it once...

7:44 PM  
Anonymous Steve Spencer said...

John, I certainly would not be among those to dismiss such an idea out of hand. However, what'd scare the bejesus outta me would be the day the deal went south; or the day that Sirius is acquired by another company less interested in the deal; or, maybe even, the day Sirius is no longer around.

What could be interesting here is if the math and the deal were calculated on, shall we say, a worst case scenario platform. In other words, yeah, forge the best darn arrangement with Sirius possible and see if you couldn't buy the system perhaps 7 years worth of this financial freedom.

Even if all went awry thereafter, stations would have had a lot of time and resources to create new things.

Given this, I still would want the stations to be paying something for programming (possibly even as much as 50% of the current burden).

Why?

Because the idea you posit is nifty in a perfect world. I believe that it presumes the liberated dollars would be used to best effect. It's more likely that some stations WILL do amazing, compelling things with their new gold. Others will try and fail (that's the b'cast biz, for ya). And still more may not really know what to do or how.

And all of this presumes a level of financial planning that may not be sensible within our system, which is, after all, not centralized, but rather a confederated system of autonomous entities.

Would the extra cash inspire some stations to take it a little easier on listeners and decrease on-air fund drives or the goals set for said?

And what if this satellite deal really did go kablooey and stations suddenly had to revert back to the old model (or one created as a fall back plan)? Could stations (some, most, all) do it? What amount of institutional memory and experience with current fiscal and revenue generation realities might be lost during the "free years." What impacts might that have on the system's ability to recover?

Even given the existence of a fall back plan, what would IT look like? How would one test its assumptions? What reasonable assurances would anyone have that it would be workable?

As long as we're considering all things, I'll just keep on keepin' on that the real dream plan ought still to be the one the Carnegie Commission put together...a trust fund.

Pie in the sky? Crazy idealist? Maybe.

But like anyone else, I heard the news today and, oh boy, someone's gonna tell me that with billions unaccounted for in Iraq, let alone the billions more spent on lots of other nonsense, there does not exist the means to put together a cogent campaign to make a pubcasting trust fund a reasonable sell to the public?

Now, I didn't say do it today or tomorrow. Such an idea certainly ain't goin' nowheres anytime soon. But like anything worth doing, THIS is worth doing right. Putting together the right coalition, the best strategy for action, and the optimal timetable.

I will go to my grave believing the last window of opportunity to seriously TRY for a trust came and went during the early Clinton years. The Gingrich assault allowed us to galvanize public attention in a way that would have given us THEIR support for congressional action to protect the system (as opposed to don't-hurt-'em-too-much). I humbly believe our collective approach was, ultimately, too timid.

No matter how hard the side that wants the federal rug pulled out from under us tries, they can neither prove their false claims that public broadcasting has a liberal bias or say very much of anything when confronted with opinion poll after opinion poll that validates and re-validates the public's positive view of the service public broadcasting provides.

THAT'S money in the bank and, goodness knows, the worthy foundation upon which we ought to make our own federal case of this matter.

7:23 AM  
Anonymous Man Lacking a Tan said...

I'm a bit confused, you're basically suggesting that instead of charging carriage fees, NPR will give its content to affiliate AM & FM stations...and charge Sirius for it instead?

Yeah, I'd dismiss that out-of-hand, too. The ONLY reason Sirius made that $500 million deal for Stern was because of exclusivity. Stern has loyal fans. These fans can't get Stern unless they pony up for Sirius. Ergo, Sirius makes money (assuming there's enough loyal fans).

If Stern were still available on all his AM&FM affiliates, which are FREE to listeners, why would they pay for Sirius? What's in this idea for Sirius?

Or am I missing something here?

11:19 AM  
Anonymous Anonymous said...

The point about exclusivity is a good one... another issue to consider: what happens to all that extra money when listeners realize that stations don't have to pay for NPR any more? That would be quite a land mine on the giving path.

1:27 PM  
Blogger RadioSutton said...

Let's take these one at a time. Not everything on Sirius is exclusive. Sirius would pay a greatly reduced rate for NPR programming because there is no exclusivity. Look at the growth trends Sirius needs to be a successful business. Those numbers barely dent the public radio Cume.
Plenty of listeners and listening left over plus audience growth as new programs are developed locally. At least that's the theory. Are you arguing that local isn't up to the task? As for the fundraising, every year more stations are getting half of their net development income from underwriting. That doesn't go away. On the membership side, NPR dues are only a part of the fundraising case message. Again, I ask, is the local case for giving so weak that membership is undermined by this? If so, then all the talk about the value of localism is nothing more than rhetoric. In the meantime, a request. Even if you disagree with the idea put forward, plesae put some thought into why it jsut might work. It's always easy to shoot something down than build it up. Give it a try.

2:40 PM  

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