Thursday, July 30, 2009

Everybody But NPR...

Just about everybody in public radio but NPR is raising money directly from listeners.

PRI is doing it. So is American Public Media. Independent producers are doing it. Stations that produce national programming are doing it, including a few that are adamant that NPR should stay out of their markets when it comes to raising money from listeners.

Some of these national appeals are a straight request to donate to a production such as The Splendid Table or The Kitchen Sisters or Marketplace. PRI takes contributions from listeners at its website and occasionally asks them to give there during PRI underwriting credits.

Some appeals are for money to cover new media costs. This American Life has raised hundreds of thousands of dollars using new media – emails, Facebook, and spots at the top of podcasts -- to support its podcasting service.

Good for them.

Public radio can only benefit from finding more ways to solicit listener contributions, including NPR asking for money directly from listeners. The business model, how NPR charges stations for programming, has to change to make this work. But it can be done and everyone can benefit.

This is not a popular position with stations but stay with this, please.

NPR Can Help Get Lapsed Donors Back

Public radio’s annual donor retention rate is only 60%. Put another way, the current approach to fundraising fails to retain 4 out of 10 givers each year. That’s 1,000,000 givers per year.

At an average annual gift of $80, public radio stations are failing to renew $80,000,000 in support annually. The number could be even higher when lost additional gifts are factored into the equation.

With direct fundraising NPR could help keep as much as 25% of that money in the system each year, with most of the money going back to stations along with the names of the renewing donors.

Remember, these are donors who did not to renew despite 4 to 10 direct mail letters from the station, maybe a telemarketing call, email appeals, and hearing numerous fund drives. This is found money.

NPR Can Help Get Additional Gifts

Research shows that public radio givers will support multiple stations in a market, provided they listen to and value both stations. Listeners who give to more than one station typically will give equal amounts to each station. They don’t want to hurt one to help the other. It’s one of the benefits of having a societally-conscious audience.

That behavior will play out nationally too. Many people who give to stations will gladly give to NPR without reducing their support to their station. If just one percent of NPR’s weekly Cume makes a contribution of $80 to NPR annually, in the form of an additional gift to public radio, then the industry has $24,000,000 million dollars in new gross revenues.

Yes, some givers, but not many, will choose to only give to NPR, but there are ways to compensate stations for that money and to help stations get even more donors.

NPR Can Help Stations Acquire New Donors

This is the obvious approach. NPR can leverage its brand and economies of scale to conduct direct mail and email acquisition campaigns. What seems cost-prohibitive to many local stations is very affordable on a national level. All that’s needed is a model for making sure that all boats rise together.

And that’s the crux of the matter. Public radio has the wrong discussion when it talks about who should be asking for money. That’s a no-brainer. Everyone who can ask efficiently and effectively should be asking. This American Life is proof of the power in national fundraising.

The harder part is figuring out how the network and stations work together to share in the growth. That requires new business models and trust and the new business models are actually pretty easy. It’s just math.

Trust will only come through experience. That’s why the industry must move forward with some experiments now. Any one of the above suggestions will do. Success for all will breed trust. Nothing less will.

Until then, public radio is muffling its single most powerful fundraising voice at a time when it is getting harder to be heard. There’s no sense in that.


Note: The This American Life national fundraising effort was through the program's producing station, WBEZ, not it's network, PRI. All contributions were to WBEZ.

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Blogger Mike Crane said...

John, you're right on the mark! It's a darn shame to be limiting our own potential for service by following our outdated trust-less habits!

4:21 PM  
Blogger Greg said...

I too agree. Our model has worked well for many years, but that was when there was no place else to get our content. Now there is, and increasingly people are seeking it online. Raise funds where the people are. Stations have been reluctant to allow NPR to fund-raise in the past because there was no "revenue sharing." If we can look far enough into the future, our model won't work if the cost of producing national content keeps going up and the number of people available from which to fund-raise keeps going down (radio). This needs much work, but we need to start considering an alternative business model sooner rather than later.

8:06 AM  
Anonymous bill said...

If your assumptions are on the mark. If people will continue to give equally to NPR and member stations, it could work provided a new revenue model is adopted.

Perhaps it would result in the demise of some member stations or perhaps member stations would evolve into a different form or platform. The aforementioned doesn't necessarily have to be viewed as a negative.

11:43 AM  

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