The single most import strategic decision facing NPR
When a fan of public radio gets into his car, pushes
the start button, and gets ready to pick something to hear through his
web-connected dashboard, does NPR want him to…
A. Choose to listen to content directly
from an NPR member station?
B. Choose to listen to content directly
Today, the entire public radio economy is based on
answer “A.” All of the money donated to
public radio stations by individuals is based on listeners choosing to hear
their public radio content directly from a member station. Almost all of the underwriting money is based
on answer “A” as well. Federal funding
is predicated on Community Service.
Foundations invest in being heard.
The single greatest potential disruption faced by
public radio is not that listeners will start to use digital technology. The single greatest disruption will be that
stations will not be able to aggregate listeners in significant enough numbers
to grow the industry’s revenue base.
This is public radio’s craigslist moment.
You’ve heard the story about how craigslist destroyed the newspaper
business revenue model by changing where and how people placed and viewed
classified ads. Just as classifieds were
the newspaper industry’s most profitable source of revenue, tune-ins to NPR
programs are a public radio station’s most profitable source of listening. Take the NPR program tune-ins away from
stations and the industry’s revenue model collapses.
This is especially true of NPR’s business
model. NPR collects $70,000,000 per year
from stations. An additional $40,000,000
to $50,000,000 in corporate support is directly linked to reaching tens of
millions of station listeners each week.
That’s up to $120,000,000 of NPR’s annual revenue directly linked to NPR
member station audiences.
Station audiences are built one listening choice at
a time. When a listener can choose between NPR and a member station on the
dashboard, NPR’s single most important strategic decision is if it wants that
listener to first choose listening to the member station or to first choose
listening directly to NPR. The entire
public radio economy rests on that choice.
There will be financial disruption in public radio no matter which strategic
choice NPR makes. The issue facing NPR
is the magnitude of that disruption and how to manage it. To do that, NPR needs to develop system-wide economic
policies that put the industry ahead of the audience/financial disruption
Unfortunately, NPR’s greatest weakness today is that it is ill-equipped to
develop policies that can simultaneously serve the best interests of NPR, its
member stations, and listeners.
NPR’s Board and Executive Management, while
pushing forward hard with NPR direct-to-listener strategies, have rolled out
nothing on what the public radio economy looks like when listeners begin
choosing NPR before member stations. It’s
as if NPR has become policy-adverse, which startling given the invaluable role
policy played in fostering the strong public radio system we have today.
While the NPR Audience was built through great
network content and great programming at local stations, the public radio
system was built through smart policy making. Policy was used to
professionalize stations, ensuring adequate staffing and skills training. Policy was used to set growth goals and
success metrics that increased public service and financial self-sufficiency
for stations, program producers, and NPR.
Policy was used to save NPR from its financial crisis. Policy was used to develop program pricing
models that fostered a more productive and less antagonistic relationship
between NPR and its member stations.
NPR needs a smart economic policy today more than it
needs the latest and greatest in digital technology. Technologies change. Adaptation will be slower than anyone
expects. In the meantime, NPR can make
its single most important strategic decision. NPR can imagine a healthy
economic future for NPR and its member stations. And NPR can start developing
an economic policy to create that future.
It is how the public radio system was built and it is how the public
radio system can grow more relevant through technological and economic change.