Friday, October 04, 2013

Transition for NPR Highlights Major Industry Issues - Part 2: The NPR-Member Station Relationship

A recent article at highlighted some of the financial and membership issues facing NPR as it looks for its next leader.  Our last post considered the financial side.  This post considers the membership issues.

Current reported on NPR's recent customer satisfaction survey among member stations.  NPR scored well when it came to representing stations on regulatory, legislative and legal matters.  NPR received very low satisfaction scores on engagement with member stations.

It's no secret that stations have felt for many years that NPR hasn't been looking out for their best interests. The surprise here is the depth of dissatisfaction.  NPR was hoping to score 7.5 out of 10 on the engagement portion of the survey -- that is, NPR aspired to a "C+" average -- and it scored a 5.9.  On attentiveness to small stations, NPR scored 5.1 out of 10.

The low customer satisfaction scores are an especially big deal because NPR's Board is controlled by member stations. Also worth noting is that the past three NPR Board Chairs have come from medium-sized stations, not large stations. 

There's a long history of tension between NPR and stations over financial, audience service, and governance issues.  That tension has grown in recent years as NPR's digital efforts allow more listeners to get content directly from NPR.  This "bypass" is a scary proposition for NPR member stations and most stations view their control of NPR's board as the last line of protection against NPR grabbing their listeners and donors. 

The thing is -- it's not working at that well.  Stations can wield their governance power to prevent NPR from doing some things but they can't seem to use it to get NPR to act in their best interests. The recent satisfaction survey is evidence of that.  Member stations control the Board. Through their votes they control which station managers sit on the Board,. Yet with all of this control at the top, NPR still gets an "F" on customer satisfaction among member stations.  Station control of the Board isn't translating into a better NPR-Member Station relationship. 

So where's the disconnect?  It's easy to blame the executives in charge at NPR but perhaps the issue still rests at the Board level.  Here are two factors to consider.

First, NPR's Mission and Vision statement doesn't embrace helping member stations succeed. Even though NPR is a membership organization, the Board has not charged the executive leadership with serving member stations.  The mission statement says NPR partners with member stations. It says NPR represents the member stations in matters of mutual interest.  But it is silent about NPR acting in ways to help stations succeed.

The second factor, and this is probably linked to the Mission/Vision statement, is the role of the CEO/President.  Recently, the NPR Board has taken to hiring leaders of NPR but not leaders of the NPR membership, and certainly not leaders of the public radio system. That has to change if the NPR Board wants to repair relationships between NPR and its member stations.

More in our next posting.

Thursday, October 03, 2013

Transition for NPR Highlights Major Industry Issues - Part 1: Financial has a good read on some of the financial and membership issues facing NPR as it looks for its next leader. 

On the financial side, Current reports that NPR had its best fundraising year ever in 2013, yet ended the year with a $3 million budget deficit.  It was a remarkable comeback given that the project budget deficit was $6.1 million. 

The lesson here is that public radio doesn't have a fundraising problem, it has a spending problem.  This is not only true for NPR, it is also true for many public radio stations.  Many stations are raising more money than ever, but struggling to make ends meet.  Additional investments in digital and local news aren't coming close to paying for themselves.

According to Mark Fuerst, who is leading the Public Media Futures Forums, this financial pressure is greatest on medium and smaller stations.  Revenues are growing for the largest 50 stations, but the smaller stations are struggling. That has to change soon or these stations will find themselves facing the same situation as NPR -- having to shed staff to make ends meet. 

How does it change?  Here are two necessary steps.

1.  Restructure how money changes hands in public radio.  After salaries, national program acquisitions are typically the largest line item in a station's budget.  The basis for those programming fees is an economic model rooted in 1990s media market dynamics not today's digital media marketplace. Restructuring the public radio's internal economic model could free up much needed resources for the smaller stations while ensuring that NPR and other national program producers have the resources needed to create high value programming, programming that generates loyal listeners and surplus revenues nationally and locally.

2.  Start applying financial success metrics to digital and local content efforts. Station managers need  to know how much public service these activities really provide.  They need to know if there are real returns in terms of public service provided and net revenues against direct expenses.  They need to know how close these activities come to breaking even.  And if they aren't at least breaking even, they need to know how much subsidization each activity requires. Having a handle on those metrics will help managers make smarter financial decisions whether there is a financial crunch or not.

In the next posting, thoughts on the troubled NPR-Member Station relationship.

Tuesday, October 01, 2013

Keep Hitting Listeners Right Between the Ears

Below is the original text from John Sutton’s acceptance speech after receiving the Don Otto Award from Audience Research Analysis and the Public Radio Program Directors association.  You can hear the speech here.  Just like live radio, what was written and what was said varied some.

It’s an honor to receive an award in the name of Don Otto, whose all-too brief career helped launch PRPD and professionalize the job of public radio program director. 

The first time I met Don was in 1987 at one the PD Bee workshops he helped to organize.  Those workshops were a critical beginning to the success and relevance public radio has today.

One of the key themes of those workshops was helping PDs understand what business they were in.  Many thought they were in the “be all things to all people” business.  Others thought they were in the museum business, that their stations existed as a place to preserve the failed programming of commercial radio.  Polka anyone?

What program directors learned during the PD Bees was that they were in the public service business… more specifically… public service delivered via the ears.  They learned that public service was NOT what they created… but what was consumed… what was heard. 

Here we are, a quarter century later, and as an industry public radio is again questioning what business it is in.  And by “business”I mean the activities that generate the money that pays the bills.  The value proposition. 

Is it the radio business?  The journalism business?  The content business. The public media business?  Honestly, do listeners even know that that even means?

How about none of the above?

The significant service public radio provides,  the market niche public radio owns, the one that keeps public radio in business is not radio.  Radio is a technology.  And it’s not journalism.  There are hundreds of places to find good journalism.

No, the service that you deliver, the service listeners voluntarily support with money is helping people find meaningfulness and joy in life while they are doing other, mundane things.

It's not just the content.  It's how and where the content gets to them, how it fits into their lives.  That's what listeners support with their money.

Again, the business you’re in today is helping people find meaningfulness and joy in life while they are doing other, mundane things.  And you are the best in the world at doing that.

I just started a new reserch company that measures the emotional connection public radio listeners have with NPR, and with their stations.  Let me tell you two things we’ve learned and reaffirmed.

First, your listeners believe that the act of listening to public radio is part of doing something good for society.  Think about that. For your audience listening is doing good for society.

Second, your listeners believe that listening to public radio makes them better people.  You make them feel smarter.  You contribute to their sense of happiness.  You help them connect to people and ideas that enrich their lives.

You help people lead more meaningful personal and civic lives while they are doing the mundane -- shaving, dressing, making coffee, sitting in traffic.

You don’t occupy their time.  You make the time they spend doing other things more valuable.

Sometimes you do that with journalism.  Sometimes you do it with music.  Sometimes you do it with entertainment.

That was the essential lesson Don Otto, and many others, were trying to help program directors learn in the 1980s.  That lesson still applies today.

You’re not a hospice for dying radio formats or, for that matter, local journalism.  And digital technology?   It’s just that –technology -- another means to the end.

The end game is the same today as it was in the 1980s. 

Keep hitting listeners right between the ears.

Keep getting better at turning the most mundane, routine activities into meaningful moments.  And when you think you are good as you can be, find ways to be even better.

That was what Don Otto brought to public radio.  It is an honor to receive this award in his name.  Thank you.