EOY Fundraising Update

Listeners continue to support their stations through the GiveToPublicRadio.org website. As of 1p today:

2,038 gifts totaling $166,729

It looks as though more than $35,000 was given through local station sites and phone numbers so the total is likely to exceed $200,000. We'll know more in a few days.

Best of Public Radio 2008 Update

The Best of 2008 fundraising special aired on more than 70 stations today. The overall response was good.

As of 6p (et), the special, hosted by Wait Wait Don't Tell Me's Peter Sagal and Performance Today's Fred Child, has generated 1,597 contributions and $130,006 for stations through a special website, www.givetopublicradio.org.

Many stations reported increased contributions at their local websites and some stations were receiving pledges over the phone. We do not yet know how much came in through other sources in response to the special, though it appears to be in the tens of thousands of dollars.

The special was part of a larger end of year campaign that included direct mail, eblasts, and on-air spots promoting web giving. Some stations reported increases in YTD end of year giving of up to $10,000 through these channels.

We didn't know what to expect from this experiment. The on-air fundraising special was very different from most pledge drives.

• All but 6 minutes of each hour was national content, with Peter and Fred doing most of the asking.
• The special preempted regular programming with "best of" moments from 2008.
• It's a holiday weekend.
• It was a web-based fundraiser, promoting on-line giving. On-line giving represents about 1/3 of revenues received during regular fund drives.
• The website was new to listeners.
• All gifts had to be made with a credit card. No invoice pledges were accepted. Today's totals represent money in the bank.
• There were no premiums, challenge grants, hourly goals, or sweepstakes.

Some stations did exceptionally well. Others received very little response at all from the same programming and fundraising messages.

The average gift, from the same on-air appeals, ranged from around $40 to $127. The overall average was just over $80, which is what we typically see at stations that don't use premiums.

Technically, the day went extremely well. There were very few glitches.

There's a lot to review and a lot to learn from today's special. We'll report back to you as we have more information.

I believe we can build on today's success to create better fundraising for stations in the future. Thanks to NPR, PRI, APM, Public Interactive, DEI, Peter Sagal, Fred Child, Ira Glass, the Car Guys, Matt Martinez (our producer), Jay Clayton, and Sonja Lee for their help.

And many thanks to the more than 70 stations willing to try something new.

Funding Content Not Programs

Weekend America and Day to Day were not the only recipients of large CPB grants over the past few years. Story Corps received several million dollars. This I Believe received nearly $1,000,000.

I can't speak to the budgets of these projects, I haven't seen them. But the overall model of funding and audience service is a good one.

Story Corps and This I Believe feed public radio with high quality content that reaches millions of listeners with a single broadcast thanks to the already built-in audience of the NPR News magazines.

The nature of the stories, including their length, makes them well-suited for distribution over the air, on the web, in podcasts, and in print. Lessons learned from This American Life's foray into television could help Story Corps and This I Believe develop video components.

Both projects can enhance a station's community outreach through local implementation. Story Corps coming to town is a big deal. WRNI's This I Believe Rhode Island is an excellent example of how to take the national concept and produce it locally.

It seems counter-intuitive that millions of dollars are better spent on 5 minute stories than on 1-hour or 2-hour programs. But perhaps the best way to succeed in the new media marketplace is to stop thinking about programs and start trying to find the next Story Corps or This I Believe.

More on Spending Less

The industry trade publication Current is starting a discussion on public radio spending and audience growth. You can find it here.

Here's a cross posting of a response I added to the discussion earlier today. The topic is what it will cost to reach new listeners under the current spending model.
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Under the current spending model, reaching 100,000 weekly listeners with an NPR News formatted station costs between $1,500,000 and $2,000,000 annually.

Embedded in those costs are the efficiencies of network programming. Stations get world class content at a fraction of its true cost.

Most of those efficiencies don't exist for content aimed at new audiences. It's not unreasonable to expect that it would cost 50% more, under the current way of doing business, to reach 100,000 new listeners whether they were Latino, African-American, or younger.

Reaching 100,000 new listeners could cost as much as $3,000,000 per year if the new service is structured the way public radio is structured today.

That level of expense won't be supported by the marketplace. Such a station would do well to generate $1.5 million in business and listener support.

The spending model must change to support new audience growth. Either that, or CPB is going to have to redirect current investments to audience growth efforts.

Here's an interesting question, will a station in Kansas accept a lower CSG to help grow the audience in LA?

Big Subsidies Required?

It's been a rough year for network programs. NPR recently announced it was pulling the plug on Day to Day and News and Notes. NPR's Bryant Park Project went silent in July. American Public Media just announced it is shutting down Weekend America. Public Radio International cancelled Fair Game back in June. CPRN, the Classical Public Radio Network, shut down earlier this year as well.

All of these programs have something in common besides being cancelled in 2008. All of them received subsidies from the Corporation for Public Broadcasting.

CPB's total investment in these programs from FY 2004 to FY 2007 was $8,200,000. FY 2008 is not included here since CPB's annual report with audited numbers is not yet available.

Subsidizing the start-up of network programs is usually a sound investment of CPB money. Successful network programs, even with budgets in the millions of dollars, deliver significant audience and revenue to stations for less expense than most locally produced programs.

Successful network programs are also supposed to sustain themselves when the subsidies go away. The failure of so many programs should serve as a warning to the entire public radio system that something is seriously wrong with the industry's spending model.

Here are the CPB subsidy numbers for the top two recently cancelled programs.

Weekend America: $4,200,000 (2005-2007)
Day to Day: $2,400,000 (2004-2007)

Day to Day produced five original hours of programing each week. Weekend America produced two original hours of programming each week. The millions of dollars provided by CPB were just a portion of each program's budget.

Both of these programs were designed to grow public radio's audience, attract new donors to stations, and attract new underwriting dollars to the industry. In short, they were supposed to succeed in the open marketplace and could not.

Day to Day was reported to have 2 million weekly listeners. Weekend America had 657,000 weekly listeners. We are now learning that those audiences were not big enough to sustain the costs of producing those programs.

This lesson must be applied to all efforts to attract new audiences. The current public radio spending model is not sustainable.

Getting new listeners is always more expensive than keeping the listeners you have. Getting new listeners requires making new investments in infrastructure and unproven content. Failure has to be funded in order to find what works. That's expensive.

On the revenue side, demographically and psychographically different audiences will not generate as much listener-sensitive revenue as the current audience. Public radio already has the audience most likely to make substantial donations to support programming and operations. The current audience is also probably the only audience for which the public radio underwriting model works well.

The working assumption for serving new audiences has to be "spend less and expect to earn less." Based on events of the last two weeks, it also appears that big subsidies might always be required to keep those new services on the air.

CPB's Annual Reports are here

Economic Realities, Again

From the radiosutton archives.

Economic Realities: September 26, 2005

This year’s Public Radio Program Director’s conference included several sessions and many hallway discussions about new media technologies and the development of local programming.
The conference issue of Current, public broadcasting’s trade publication, featured articles about reaching new audiences and becoming more than just a radio station.

“What’s your business model?” and “How are you going to ‘monetize’ that?” were two of the more popular questions of the week. Perhaps it is a measure of progress that public radio now actually thinks about how it will sustain new programming and other new initiatives before spending lots of money on them, but that shouldn’t be the first concern.

Public radio’s economics have not changed much since last year's CPB-funded Brody-Weiser-Burns study found that 56% of public radio stations are not fiscally sound.

If CPB funding were to go away in the next year or so, many stations wouldn’t be able sustain their current service. Local programs or hosts would go off-the air. News positions would be cut. Important, but expensive, network programs would be dropped. New initiatives would be dropped.

To use today’s technologically hip speak – most stations’ business models aren’t monetized for self-sufficiency.

Yes, public radio would survive the cut. And the loss of CPB money would galvanize fundraising for a while. But the industry would suffer some serious setbacks.

There’s no question audience growth and diversification are important goals. Public radio should, as many folks were saying at the PRPD, “occupy the new media space.” (Though just occupying it seems a relatively low ambition.)

Sustaining these new activities, however, will be impossible without first shoring up the financial foundation of our core service. That should be public radio’s top priority.