What is Public Radio’s Next Surplus (Profit) Center?
There’s no question having 5 or 6 revenue streams is better than having one or two. Despite all of those revenue streams, public radio’s business model still depends on significant revenue surpluses, or profits, from some of its programming. Today those surpluses come from the drive time news programs and one or two specialty programs such as Wait Wait Don’t Tell Me.
Neither NPR nor stations can run their operations, let alone take on new efforts that don't pay for themselvers, if those surpluses shrink or go away. That's a real threat as listening spreads across terrestrial and web-platforms. And make no mistake about this, replacing newspapers as the place for serious local journalism will require subsidies or supplemental income beyond donations and underwriting. Tom Thomas of the SRG has been preaching this for at least five years.
It’s nice to think that major donors and foundations will always provide the funds needed to subsidize activities that can’t pay for themselves. They won’t. They never do. Major donors and foundations eventually want to fund the next new, big thing. And it’s highly unlikely that government funds will fill the gap. NPR CEO Vivian Schiller pretty much said so herself at last week’s PMDMC.
Public radio can probably make a pretty good push into the local news business over the next few years by tapping into new, philanthropic dollars. Sustaining that effort, however, will require increased surpluses from its profitable activities.
NPR's current newsmagazine pricing model doesn't lend itself to that. And NPR is talking about charging stations even more as they increase their NPR offerings on the web. If anything, surpluses from the newsmagazines will shrink in the coming decade. That means public radio needs new surplus centers. Unfortunately, no one seems to be developing those.
Public radio is currently in love with projects that draw on surpluses rather than increases them. The industry needs both or public radio's local news efforts will eventually find themselves in the same financial boat the newspaper industry finds itself in today.