Sunday, August 27, 2006

Will Listeners Voluntarily Support Web-based Services?

A recent, excellent article by Jake Shapiro asked whether public radio’s membership model could work with podcasts. To help answer that question, let’s turn to what we already know about turning listeners into donors.

The Stairway to Given is based on a statistical model that outlines the steps listeners go through to become contributors. Originally published as part of the Audience 98 project, it is a refinement of more than two decades of research on how listeners become contributors.

I’m pretty certain it will apply to public radio services delivered via the Internet, whether those services are from a station, a network, independent producers, or some new entity. But let’s travel the Stairway to Given and see.

The First Step: Someone must listen to a public radio station

This seems self-evident but it still needs to be applied to the web. People who don’t use podcasts or streaming media or public radio web sites aren’t going to donate money to keep them on the Internet. Non-users won’t give. Users might give.

The Second Step: The listener must rely on the programming

Reliance has a very specific meaning here, one that is useful when considering web-based content. Reliance is based on the listener’s use of public radio. It is a measurement of behavior and includes factors such as Loyalty, the number of weekly tune-in occasions, the number of different programs and dayparts used by the listeners, and years spent listening.

This is where we see the financial importance of converting Fringe listeners to Core listeners. This is where we see that it takes an average of 3-5 years of listening before someone will voluntarily contribute money to public radio.

Consider the implications for web-based content. Will listeners use public radio podcasts or streams more than any other source of Internet audio? Will they use them 10, 12, 15 times per week? Will they use them consistently over years, not just weeks or months? Can public radio create in listeners the same level of Reliance on its podcasts and streams as it does on its station broadcasts?

If so, it begs the question on whom is the listener relying? A station? A network? A producer? So far, public radio has looked at this mostly as a delivery question. Who delivers the service? In the end, it is really a branding and marketing question. More on this in a future posting.

The Third Step: The listener must find the programming personally important

Where Reliance measures listening behavior, Personal Importance measures how well the content connects with the listener’s personal values and beliefs. The specific research question is this, “The programming on WXXX is an important part of my life. If it went away I would miss it."

The more a listener agrees with that statement, the more likely he is to become a public radio contributor. Let’s try this with the Internet.

“The podcasts from _____ are an important part of my life. If they went away I would miss them."

“The _____ web site is an important part of my life. If it went away I would miss it.”

“The (classical, jazz, AAA, bluegrass, folk) music from (web site) is an important part of my life. If it went away I would miss it.”

Public radio’s on-line services – audio, print, social networking, you name it – will have to pass the Personal Importance test with users in order to earn their voluntary financial support. Users won’t give if what is offered won’t be missed.

Personal Importance and Sense of Community

One key aspect of Personal Importance is the concept of “Sense of Community.” This is the idea that public radio programming is one of the ties that bind together people with certain shared values. Their common listening experiences creates a Sense of Community.

Today, many public radio listeners hear the same news stories, talk shows, and entertainment programs in roughly the same time frame. They talk about what they heard and relive the experience together. That won’t be as common in an on-demand world. There will be more individual and fewer "communal" listening experiences.

The Internet provides opportunities to compensate for this. Listeners e-mailing audio links to one another is one example of this. Social networking is another. Not all listeners will do these things, but Sense of Community might become even more powerful in the decision to contribute among those who engage in on-line community activities.

The Fourth Step: Funding beliefs

Listeners must believe that listeners, and not the government, are the primarily source of income for public radio.

This is probably not as much of a problem for on-line services as it is for public broadcasting, which has a long history of federal and state support. That said, public radio has the chance to start educating web content users about how it is funded and the importance of listener contributions.

Audience 98 did not test the question of business support, so we cannot predict how that will factor in voluntary giving decisions regarding web content. That said, a parallel could be drawn between government support during the infancy of public radio and business support during the infancy of on-line content.

If users learn at the outset that someone else will pay for their web-based public radio, it will make it more difficult for public radio to get their voluntary support when it is needed. Public radio should start cultivating those future donations now with appropriate marketing and messaging.

The Fifth Step: Income

Audience 98 showed us that household income was a contributing factor in whether someone would give to public radio, but that it was not nearly as significant as the other steps of The Stairway to Given.

Not all donors are wealthy. Not all wealthy listeners are donors. Public radio is not just for those who can afford to pay. That’s a fundamental aspect of the business. No matter who pays for it, it is available to all. That’s what makes it a public service.

Summary

The Stairway to Given provides a wonderful listener focus for the question of whether listeners will voluntarily support public radio’s web-based content. Can you imagine hundreds of thousands of people donating if they do not rely on it, do not find it personally important, or do not believe their contributions are truly needed?

The doubters and skeptics will use that last question as ammunition for arguing that the voluntary support model is dead. I disagree.

I believe The Stairway to Given is a blueprint for designing public radio’s web-based services. Let’s start asking how users will rely on us in meaningful, measurable ways and then construct our service offerings accordingly. Let’s ask if our content resonates with users deeply enough that it becomes personally important. Let’s find ways to use the web to build Sense of Community around the values we share with our listeners. Let’s ensure that we don’t create misperceptions about our funding that we will have to undo down the road.

We know what we need to know to get users to voluntarily support public radio. If we successfully hold our new, web-based offerings to the Stairway to Given standard, they will financially support those too.

11 Comments:

Anonymous Anonymous said...

I have heard rumors that some content-creating stations (i.e. WHYY, KUT, WBUR, WNYC, etc) are making more money off of XM & Sirius syndicating their shows than they make in NPR affiliate fees.

That would seem to indicate one of two things...either the subscription model IS more viable than the voluntary donation model. Or XM & Sirius are based on non-viable business strategies, and eventually the money from satradio to content creators will dry up.

10:58 AM  
Blogger RadioSutton said...

If all you care about is making money, the subscription model is wonderful. If you're in the business of providing public service, you have to give the public free access to your content. It's not a public service if people have to pay for it.

I would imagine the CPB money would dry up fast in that situation. I doubt that Congress would allow content created with tax dollars to be available only through a subscription.

As for Sirius and XM, I don't see any of those stations lowering their fundraising goals because of the satellite income they get. None of their satellite program offerings, let alone their stations, could be sustained by satellite fee-income alone. In fact, WBUR now does something like 6 pledge drives a year. That's hardly moving from the voluntary support model.

12:49 PM  
Anonymous Anonymous said...

Actually WBUR scaled back their fundraising to 4 times a year ever since Paul La Camera came onboard as GM, but I digress. And I think your last paragraph is a bit reactionary...it's like you want to dismiss the point as quickly as possible. Let's put this in perspective. You're a public radio station pulling in $5 million a year in affiliate fees, $5 million in fundraising and $5 million in underwriting. Nice $15 million budget. I made those numbers up, of course, but that's irrelevant for this example.

Now XM or Sirius comes along, and wants to offer you $10 million for the right to air some of your shows. It will cost you nothing directly to do it, but you do risk losing listeners.

After careful analysis, you decide you will probably lose enough listeners that your fundraising and underwriting will take $1mil hit each. That's a net profit of $8mil. Sweet.

Do you suddenly decide - jeez, I really should "give this money back" to our listeners and run less fundraising and underwriting?

Hell no!

At the very least you'd put that money into making your shows better somehow, either more staff...better paid staff...or better facilities. But you wouldn't run less fundraising or underwriting; you've put a ton of effort into conditioning listeners to accept that much fundraising/underwriting. If you scale back, and the money from satradio goes away (which it could at any moment) then you're really hosed. It's just a bad business decision.

Congress already allows content created through tax dollars to be available only through a subscription. It's called satellite radio. Ever notice how big the subsidies were for them? Please. And a major tenant of HD Radio is that subscription services are coming sometime in 2007 (believe THAT when you see it...not before, but still - it's coming). And public radio is salivating over that opportunity.

And there are lots of public services that we pay for. Public transit comes immediately to mind. What about toll roads? Closer to broadcasting, everyone I know would consider Radio Reading Services to be considered a public service...but you've got to pay to get the subcarrier radio to hear it.

I think this also touches heavily on what mission of "public radio" is supposed to be. In the past, the idea of public radio being accessible to the public meant that any yahoo could come in and get a show. By the same token, it meant that public radio was supposed to tailor its programming to the most underserved audiences possible. This idea is all well and good when you've got a substantial subsidy to cover the costs. But the reality of the 1980's and 1990's (and today) is that subsidy is best treated as being nonexistant. Congress is always trying to kill it off entirely and it's barely there to begin with.

So the reality of today is that if public radio wants to survive, it's got to get money from the audience and that means it's got to have the mindset of "making money". I won't it's nice, or pleasant, or even "right". But it's what we're faced with. Especially since it takes years to build up a viable "subscriber" base (either through literal subscriptions or figuratively, meaning donations & underwritingers). Every year, Congress could kill off CPB next year. So it's too risky to wait until Congress finally succeeds.


And I think you might be dismissing my point too quickly...look at the Bob Edwards Show. Allegedly (I don't have satradio myself) it's a quality product in the public radio style, and it's supported solely by XM satradio subscription fees, is it not? Well, that and maybe advertisting?

12:32 PM  
Anonymous Anonymous said...

I'm not quite sure how this essay applies to this discussion...but somehow when I read it, I immediately thought of this discussion.

http://www.websnark.com/archives/2006/08/also_stick_figu.html

12:41 PM  
Blogger RadioSutton said...

BUR - four regular pledge drives (Early fall, December, March, June) plus two "flower campaigns" (Valentine’s Day and Mother’s Day) that include preemptive pitching (interrupting the programming). That's 6. And that’s about only half the listener support BUR gets. They raise roughly an equal amount of money through direct mail, telemarketing, and other off-air activities.

Affiliate fees and Sirius fees - nowhere close to 5 million dollars even if you combine them. Maybe not even one million. Besides, how is that a strategy for the industry? Every station, even half of them, will make $5 million this way?

Look, I’m happy to have these discussions, but one of our goals here is to base those discussions in verifiable research and data. You can't just make up numbers when proposing new business models. Reality is relevant.

8:41 PM  
Blogger RadioSutton said...

The websnark essay is interesting, especially when you go to the web site for the on-line comic strip that is the subject of the essay. Not only is the comic free (no subscription required), the site gives readers explicit permission to copy, reprint, and redistribute, or make derivatives the original work. The creator has enhanced the public service value of the work by eliminating in advance the financial and legal barriers to further distribution and public access. The only requirement -- remain non-commercial. Kind of supports the argument against a subscriber model.

9:00 PM  
Anonymous Anonymous said...

Financials - I hadn't thought affiliate fees & satradio fees would be quite that low. But then again, I don't study this stuff for a living so pardon me if my voice is muffled...there's a large foot in there at the moment. :-)

Websnark - touche, indeed. Upon reflection I was thinking more about how many proponents of public radio say it needs to be for "ALL the public" instead of the white, upper-middle class listeners it tends to be skewed towards now. Whereas this websnark essay is more that successful comics don't need to be "accessible" to all people. That is, not everyone reading has to "get the joke". I think public radio is similar - not everyone listening to a radio has to be able to "get" public radio. I see nothing wrong with programming to serve a smaller audience better vs. serving a wider audience poorly.

10:39 AM  
Blogger RadioSutton said...

You're right about the "all things to all people" problem in public radio. We con't have to do that. Trying without sufficient funds and radio signals has never worked. It's why every "younger, more diverse" audience tactics has failed.

And it is interesting to watch public radio boast of it's well-educated, wealthy audience to potential sponsors and play the "all of America" line to Congress and other media. It begs the question, would public radio become less attractive to potential underwriters if it succeeded at diversifying its audience?

1:06 PM  
Anonymous Anonymous said...

Great post and comments!

I started a response here and it got too long so it's become a post here.

- Jake

ps You've got "shapiro" spelled "shaprio" up top.

8:11 AM  
Blogger Rob said...

Hi John
I wonder if it is "Hosting" and "Convening" that might make the web "Sticky" and lead to enagagment.

I have been working a lot recently with "Commonses" Common Workplaces for Free Agents. It is clear that what makes them successful is not only the space and the price and the stuff but that the key has been in "Hosting".

I wonder - is this an idea that we should explore more as the "attractor" for the web based community? If it so essential to the face to face my bet is that we should.

Best wishes Rob

1:58 PM  
Blogger RadioSutton said...

I do think it will help to have a destinations for public radio listeners. I also think that industry-wide branding is essential. A destination will help with that but the public radio brand has to hold its own in other environments. I'm really interested in seeing how the CBS/Yahoo experiment pans out. CBS News is driving viewers to Yahoo for content rather than its own CBS News web site. Obviously, producers such as CBS and NPR have strong enough brand sot pull this off. Can we create a larger public radio brand that could do this as well? Branding and technology is the subject of a post in the very near future.

Jake -- fixed your name. Sorry. The curse of trusting spell-checkers.

3:16 PM  

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