Tuesday, August 21, 2007

It's a Spending Problem Too

We’ve covered this territory before but the renewed interest in listener annoyance with pledge drives makes it worth covering again.

Public radio doesn’t just have a fundraising problem. It has a spending problem. Pledge drives will never go away, let alone get better to the ears of the listeners, until some fundamental spending issues are resolved.

Costs continue to grow. Network programming is becoming less profitable as it takes up a larger share of station budgets than it did a decade ago and as stations fill that programming with more local content. Stations are being encouraged to spend more money on local programming, which often does not pay for itself, especially after the initial funders (foundations and major donors) turn their attention to the next new cause. Stations are spending on HD channels. That’s going to be a net revenue loss for the foreseeable future. Stations are spending more on their websites even though those sites can’t pay for themselves.

The typical station is spending around 36 cents in direct expense to raise a dollar in listener support. That’s astonishingly high given that the full costs of pledge drives are not included in that number. We like to think that public radio saves money by raising money on-air, but the numbers suggest that’s not the case.

It’s nice to think that we could address listener annoyance with on-air fundraising without considering the spending side of the equation. Experience suggests otherwise. Over the years several stations have cut way back on pledge drives only to have those gains undone by spending practices that outpaced improved fundraising efficiency.

In the end, station managers almost always decide that making budget is more important fundraising-free programming, even if those budgets are inappropriately high.

Spending too much money? Just add some on-air fundraising. That’s part of the public radio culture. It doesn’t get better for listeners until that part of the culture changes.

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