Thursday, May 31, 2012

The Ship Still Sails, NPR's Revenue Woes

I received a comment the other day pointing out that it's been two months since the last posting on the blog.  The question was whether this blog has been abandoned.

The answer, of course, is no.

But a considerable uptick in business simply puts blogging at the bottom of each day's to-do list.  Client results come first. But that doesn't mean we haven't been thinking about public radio as a whole.

There are a considerable number of important issues to address in the industry.  Among them is NPR's revenue shortfall due to less business underwriting, as reported by Paul Farhi in the Washington Post.

Revenue shortfalls, by themselves, are not news.  What makes NPR's shortfall noteworthy is that it comes on the heels of mandatory station payments for digital services.  While those payments are being phased in -- they don't represent significant income for NPR this year -- it reinforces that stations, not advertising support, are NPR's most important source of revenue.  NPR's Core radio service and it's digital services are dependent on the success of member stations.

Farhi reports that NPR is considering budget cuts, including possibly killing the program Tell Me More.  This raises the issue as to where the pain of budget cuts might be felt.

NPR now has two main routes to listeners' ears.  This first, largest, and most profitable route is through stations.  The second route is through and related web services.  In a budget shortfall, where will NPR cut?  Will it reduce services to stations?  Will it reduce the budgets of its direct-to-listener services?  Will it do both?

If NPR CEO and President Gary Knell cuts station services and spares NPR's direct-to-listener services, then he will signal that little has changed at NPR since the departure of former chief Vivian Schiller.

The message will be that NPR sees more of a future on its own, reaching listeners directly, instead of as a membership organization that serve stations and the tens of millions of people who listen to them.   That would be bad financial news for NPR and the stations that keep it afloat.