RadioSutton

RadioSutton Blog: 7th Anniversary

2011-12-28T23:05:00.000-05:00

This is the 7th anniversary of the RadioSutton blog. Thanks for reading and writing back over that time. Your support and participation has been invaluable.

We blogged a bit less in the past year than usual due to so many client commitments. It's a good problem to have but I hope to post more in 2012.

The first posting, other than our welcome message, can be found here. In that posting, I wrote that the blog would " consider how we might better tap public radio’s vast knowledge of its listeners, fundraising, and finances. We’ll look at opportunities for individual stations and the industry as a whole. We’ll tackle tough issues including the competing priorities of public radio stations and national entities such as CPB and NPR."

More so than any other time we see 2012 as a year when competing priorities among CPB, the networks and stations will define the future of public radio. A couple of examples:

CPB will again be fighting for its life. As has been the case over the past years, it's funding decisions will be heavily influenced by what plays well on Capitol Hill, not necessarily what best serves stations or their listeners.

NPR will continue to pursue digital strategies that discourage listeners from getting NPR content on-demand via member stations.

Stations will continue to be encouraged to make unsustainable investments in local content creation based on flawed assumptions about the audience.

The entire industry will continue to leave its revenue potential unfulfilled by hanging on to old fundraising models.

We will take on these issues and many others in the coming months. They won't be easy issues to discuss, but they will be important discussions to have. We invite your participation in the discussion.

Another Misguided Effort to Attract a Younger Audience to Public Radio?

2011-11-20T19:15:00.000-05:00

Is Triple A Music Becoming the Soundtrack of Our Lives?

2011-11-03T18:15:00.000-04:00

Triple A isn’t just for Starbucks anymore.

Coldplay can be found in your grocer’s freezer section
Tom Petty & the Heartbreakers pump it out at the cardiologist's office
The locksmith grooves to The Black Keys while waiting on customers
White Stripes are what’s hot in the home decorating department
My Morning Jacket now available for all sizes at the Gap
Train tracks play in Grand Central Station

You hear it in your local grocery store, almost any neighborhood bar without a jukebox and at your chain restaurants. From TGI Friday’s to Chili’s to Outback Steakhouse the speakers bleed Triple A .

It makes us wonder. Public radio news stations thrive by offering a valuable public service that isn’t available anywhere else.With Triple A turning up everywhere, is it making it more difficult to raise money around this music?

Where were you surprised to hear Triple A? Let us know.

Radio Camp for Kids

2011-10-27T19:44:00.000-04:00

Great idea from WFDD in Greensboro/Winston-Salem, NC. Radio camp for middle school kids. Something many stations could put together for next summer.

Good Fundraising

2011-10-11T10:15:00.001-04:00

The Fall fundraising season is off to a very strong start with most stations we've worked with meeting or exceeding goals. Some stations have exceeded last Fall's results by a lot.

It is especially important right now to remember that programming is the cause of giving, not the premiums or sweepstakes prizes. The news over the past 10 months has been extraordinary and public radio's coverage of it has been exceptional. Any fundraising message helping listeners recognize the value they've received from listening is fundraising time well spent.

The fundraising tactics -- premiums and giveaways and challenge grants -- help motivate listeners to give at specific times and in certain ways. That's important, but don't lose sight of the value of programming.

It is also important to again note the excellent work on sustaining giving by MPR. Today, sustaining giver plans are one of the most powerful approaches to attracting new members and reducing dependency on pledge drives.

Fundraising messages that link public radio's extraordinary news coverage to monthly giving are particularly effective right now. Arbitron data show that Core listeners engage with their stations 40 to 60 times per month. In that context, $5 or $10 is an exceptional investment.

Good fundraising to you.

Apparently, Calm is Not Normal

2011-09-09T11:41:00.000-04:00

A client of ours keeps this handy Tension Tester (TM) nearby during pledge drives.

RadioSutton Goes Tweet

2011-08-31T14:25:00.000-04:00

We've added Twitter to RadioSutton offerings.

@RadioSutton is where you will find fundraising tips and other thoughts for people in public radio.

The first tweet goes out on Thursday 9/1. We intend to post at least one fundraising tip per week, sometimes more. The tips will usually be specific to the fundraising season, offering reminders and specific ideas to help public radio stations get more givers in the next few days, weeks or months.

We're also updating our website RadioSutton.com over the next few months. Look for announcements about new features and free stuff to help with pledge drives and more.

John Sutton and Sonja Lee

Digital Revenues and Localism

2011-08-06T08:26:00.007-04:00

Years ago, public radio researcher, innovator, and winner of the industry’s Edward R. Murrow award David Giovannoni made the point that “programming causes audience.” To those new to public radio, particularly in those working in digital services, this point might seem so obvious that it isn’t worthy of the industry highest award, but it is.

The entire body of knowledge behind “programming causes audience” helps us understand the relationships among listeners, their listening, and the revenues listeners create for public radio. That knowledge and understanding still applies today, even in the digital space. It is summed up in the Top 10 Truths About Public Radio from Audience Research Analysis (ARA).

ARA’s Top 10 Truths About Public Radio

1. Programming causes audience.
2. Listeners choose programming that resonates with their values, interests, and beliefs.
3. Listeners develop loyalty to a station with consistent appeal.
4. Appeal can transcend program genres and format types.
5. The programming most often chosen by public broadcasters appeals most strongly to well-educated Americans.
6. Public radio listeners generally perceive themselves to be citizens of the world.
7. Public service begets public support.
8. Fundraising is the catalyst that triggers giving, but personal importance and reliance are their primary causes.
9. Listeners trust public radio to be their sanctuary from commercialism.
10. Public support begets public service.

Truths 2, 6 and 7 are particularly important as public radio pursues a digital strategy. The current audience base comes to local public radio stations for their global perspective and their breadth of programming. This is the foundation of stations’ public service and the listener support stations receive.

Local programming, on the other hand, does not generate as much audience loyalty or listening as the top network news and entertainment programs. Listeners place a lower financial value on local programming than the top network news and entertainment programs. This has been researched and verified in multiple studies including Audience 98.

Local programming might make a respectable enhancement to a station’s public service and revenue portfolios. It will never be a substitute or replacement for lost listening to national programming.

That’s why it is vital for stations to offer all of their current content across all media platforms - over air, on-line, mobile, streaming, on-demand - under the same branding model that exists today.

Stations need to be just as important to listeners on the web as they are over the air. That only happens through the programming stations offer today.

- Programming causes audience.
- Listeners choose programming that resonates with their values, interests, and
beliefs.
- Public radio listeners generally perceive themselves to be citizens of the world.
- Public service begets public support.

Any strategy that moves listening to network programming away from stations will harm stations, and ultimately, the networks. Any strategy that assumes local content is the future for public radio stations is a strategy that assumes stations will raise less money in the future. Not only does that mean less money for stations, it ultimately means less money for the networks.

Miscellaneous Thoughts on NPR Digital

2011-07-11T11:20:00.000-04:00

It’s difficult to find anyone who disagrees with the notion that public radio listeners would benefit from a truly collaborative NPR/Member Station digital network. At issue is how that network comes together.

I've written that this is a significant membership issue and more work needs to go into this before the NPR Board decides how to fund Digital Services. Mandatory fees are generally bad policy and implementing such a policy without a permanent President/CEO in place is a bad idea.

Here are some additional thoughts on the situation.

Mandatory fees don’t mean universal participation. Even if economies of scale can be realized on the NPR expense side of the ledger, NPR Digital Services could still fail to generate enough station participation to leverage significant revenue opportunities. We’ve already heard that several major market stations will opt out of some revenue options.

Once NPR starts collecting mandatory fees from stations, there is no going back. Even if the service fails to live up to its promise, future NPR Boards will never vote to give up at least $5 million per year in station revenues. Stations will be stuck giving this money to NPR pretty much forever.

If it chooses to collect mandatory Digital Services fees from Member Stations, then isn’t this NPR Board obligated to do so with a policy that requires management and future Boards to protect the best interests of the stations? For example, it is very likely that the cost delivering digital services will go up and the Board will be asked to tax the stations even further. How will the Board protect stations from being asked to pony up another $1,000,000 in the fourth or fifth year of this?

The revenue discussion has been woefully inadequate. It’s hard to believe that NPR, with access to the best minds in digital media including the folks at the Harvard’s Nieman Journalism Lab, haven’t been able to put forward even one hypothetical revenue model showing station income potential by revenue stream over the next 3 to 5 years.

More on the revenue piece of the equation in the next posting.

NPR Digital: After All These Years, What's the Hurry?

2011-07-05T19:15:00.004-04:00

A recent article published by Harvard University's Nieman Journalism Lab touted the great potential of NPR's Digital Service plan, saying the time is right for NPR to create a massive digital network with its stations. The author, Ken Doctor, gets it half right.

NPR and stations should collaborate on a digital network. Public radio’s success is built on the economies of scale created by NPR/station relationship. Mr. Doctor contends the time for such collaboration is now. Well, yes, but not necessarily this month or in the next few months.

The time was really several years ago, but NPR President Vivian Schiller and NPR VP for Digital Services Kinsey Wilson weren’t interested in collaboration when they first arrived at NPR. In fact, they made a concerted effort to separate NPR and stations in the digital space. So stations started coming up with their own digital solutions.

NPR’s executive leadership is now sounding an alarm about this fracturing of the system, as though it could not have been anticipated. It is, in fact, a circumstance largely of NPR’s own making. The solution on the table is also of NPR’s own making. Stations weren’t consulted in the creation of the plan and it shows. There is so much missing from the plan, conceptually and operationally, that could make it stronger for stations and NPR.

Collaboration on a digital network is a great idea, but it has to be true collaboration and not NPR forcing a top-down plan on stations.

It’s worth noting, as Kinsey Wilson has during NPR’s road shows, the current Digital Services plan was conceived under Vivian Schiller's leadership. It really begs the question, why would the NPR Board potentially saddle its next President with a plan that was conceived by a past-President who never really understood the NPR/station relationship?

The Great NPR/Station Digital Network has waited years to happen. It can wait a little longer for a better plan than current one.

NPR Digital Services: Show Stations the Money

2011-06-30T13:20:00.001-04:00

Word from the NPR Orlando road show is that the Digital Services revenue estimates for the first few years aren't quite solid yet. That makes sense given that the Digital Services team hasn't been able to deliver a revenue plan to stations.

Further, it sounds like NPR's $15 million first-year revenue estimates included what they expected stations to earn locally.

At the Charlotte road show, stations were told that 20% of those $15 million would come from national underwriting. That explains $3 million and leaves unexplained the sources of $12 million.

To borrow a concept from the Internet-boom days, these are vapor dollars. There's lots of talk about potential but no concrete plans to show.

It appears that NPR is counting on stations to bring in up to $12 million in new revenues through its Digital Services offerings. That number could be reduced if NPR received some foundation money to support this initiative but so far there is no news of that.

These new financial numbers don't kill the Digital Services business model proposed in this blog. NPR can still take all of the financial risk here. Two components change. First, it takes a few more years for NPR to break even. Until then, the Board can subsidize the project as it was planning to do in its mandatory fee model. Second, stations get less direct money from NPR in out years since NPR expects them to be making more money locally.

How Will Stations Make Money?

Those who follow public radio finances know that the two primary sources of station income are listener contributions and underwriting (business support). At many stations, those two sources of income are nearly equal.

Using that model -- where donations and underwriting bring in equal revenue -- NPR's Digital Services offerings would have to generate $6 million from each source in new revenues for stations.

The word new is highlighted because we've encountered stations that try to count web contributions during fund drives as web income, not fund drive income. As accounting tricks go, it's pretty lame.

So the question is how does NPR Digital Services help stations generate 60,000 brand new $100 contributions, outside of pledge drives, in its first year? A similar question can be asked on the underwriting side. How does NPR Digital Services help stations generate 2,000 brand new $3,000 underwriting contracts in its first year? The numbers and ratios can vary but you get the idea.

Apparently no one at NPR is asking these questions. Or, if they are, they aren't willing to commit to answers.

Stations deserve better than that if NPR is going to impose mandatory fees for its services. These are not difficult problems to solve. All they require is a passion for station success and a little creativity. So far both have been absent in this process.

In the next posting on this topic, we're going to look at an article on NPR Digital Services published by Harvard University's Nieman Journalism Lab and why the author got it half right.

An Alternative Revenue Model for NPR Digital

2011-06-06T10:15:00.000-04:00

The NPR Digital Services road show rolls on with NPR telling stations that it will consider alternative revenue models. However, station folks at the latest road show were told the "mandatory fee" model was the best idea NPR could come up with.

Here's a better idea.

NPR covers all of the costs of the new Digital Services, offers them to all stations for free, and takes a piece of all new revenues to cover the costs.

NPR's revenue projections for these new Digital Services peak at $50 million annually after five years. The first year is supposed to generate $15 million. Its costs appear to be around $5 million annually.

The business model is simple. NPR Digital Services gets the first $5 million of all digital underwriting and merchandise sales annually to cover its costs. After the first $5 million, NPR Digital gets 1% to 2% of the remaining revenues. NPR also gets a small transaction fee on all member pledges generated by the new service from the outset. Plus, NPR would have revenue from any foundation grants it secures to launch and sustain the service.

The payment system to stations would work like an inversion of the current fee structure for the NPR Newsmagazines. Every participating station would receive a base payment. That's incentive to participate. The remaining revenues would be distributed to stations based on digital audiences, digital ad placements, merchandise purchases, etc.

It's a very fair model. NPR takes the initial financial risk but is first in line for revenues. NPR has great incentive to get stations to participate. And once it earns its costs back, NPR even makes a little extra money that can be used for R&D, to cover cost increases, and implement a bonus structure for Digital Services staff. There's even more incentive to serve stations well.

Stations get all services for free. That creates instant cost-savings. They start making money once NPR is reimbursed. Stations that aggressively implement, promote, and service their digital offerings will have larger digital audiences and earn more money.

One key to this plan, of course, is NPR's revenue projections. If $15 million is a reliable floor, then there's enough money for stations to create incentives to participate. If $15 million is not a reliable floor, then no plan is worth implementing. It wouldn't even make sense to implement mandatory fees for so little gain.

The other key to this plan is a paradigm shift on the part of NPR's Board. Right now, the Board believes NPR's direct-to-listener digital offerings are so important it is willing to subsidize them to the tune of $6 million per year. That's how much money NPR's current digital offerings are losing at this point. The Board is so committed to NPR Inc's digital future it is willing to make this extraordinary investment.

Right now, the NPR Board's commitment to the digital future of stations is not nearly as strong. It is willing to offer some subsidies at the outset, but it wants to wash its hands of any financial obligation to stations' digital success by FY 2015.

There's an old saying that, "budgets reflect priorities." Through its digital proposals and budgeting process, the NPR Board is saying NPR Inc's direct-to-listeners digital services are a greater priority than those of its member stations.

That thinking must change for any station digital services proposal to succeed. If the Board can't find money for this proposal until it pays for itself, then stations' digital success must not be a priority. And if the NPR isn't willing to take the long-term financial risk on this, how can it justify imposing that risk on stations?

Granted, this proposal probably still needs a lot of work, but it's better than taxing stations in perpetuity for services they might not want or use.

Context for NPR's Proposed Digital Revenue

2011-06-03T12:34:00.000-04:00

NPR is telling stations its proposed mandatory digital service could bring in as much as $50 million in new revenues five years from now. The revenue floor is projected at $15 million annually.

Now $50 million is a lot of money, but it is not as much as you might think.

Currently, public radio stations bring in around $500,000 million dollars in listener-sensitive income. That's listener donations and underwriting.

So NPR believes that new digital revenues will be somewhere 3% to 10% of what stations currently raise from their communities.

If you add in public radio's tax-based funding, foundation support, and other income, then the $50 million per year in new digital revenues is just 5.5% of all public radio revenues.

All of a sudden, $50 million isn't so much especially if digital audiences and revenues are supposed to replace current revenues as audiences disperse to web-based listening.

$50 million is basically growing the current annual listener-sensitive revenues by two percent per year over the next five years. That's assuming things go really well and the majority of stations buy in to the plan. And for this the NPR Board wants to impose a mandatory tax on stations.

Really?

Nationally, $50 million annually is small thinking. Really small thinking. Stations deserve better than this.

NPR’s Digital Services Proposal is Really a Membership Issue

2011-05-26T14:40:00.000-04:00

The crosstalk about NPR’s Digital Services proposal ranges from practical to apocalyptic, with some parties taking a Harold Camping-like approach to inaction on the part of stations – only the date of doomsday keeps getting pushed into the future. It was supposed to be when podcasting hit, right? Or was it streaming that was going to kill public radio? No, it was television.

Anyway, the world is changing and NPR proposed imposing mandatory* fees on stations to pay for new digital services.At least that’s what it looks like on the surface. In reality, NPR is proposing a major overhaul of its membership model.

NPR’s current membership model is a very democratic approach to membership pricing and it was put in place to eliminate some inequalities that were developing among NPR member stations in the late 1980s and early 1990s.

Currently, all stations pay the same modest fee to become members of NPR. This gets each station equal representation and voting rights within NPR’s governance structure, it offsets the costs of NPR’s National Affairs Department, and covers some other shared costs of operating a membership organization. Stations are also required to pay the membership fee to have access to NPR’s programs.

NPR’s program prices are separate from membership dues. Program prices are variable based on each station’s ability to pay, and in the case of the newsmagazines, the audience they attract. There is a relationship between the value received from broadcasting the programs and what stations pay. Since all programs could be purchased a la carte, a station could pick and choose programs that created the best value for its mission.

It wasn’t always this way. A portion of the programming costs were wrapped up in the membership dues and the dues were based on total station revenues. In the 1980s and early 1990s, there was considerable concern among member stations about having the true costs and revenues of programs buried in this business model. Stations did not want their membership dues to subsidize programs they did not want.

The NPR Board adopted this principle and approved the current pricing structure. Additionally, the Board intended to develop clear boundaries between NPR’s Membership functions and its program offerings. They wanted a firewall between money collected for lobbying and more collected for programming.

The proposed Digital Services business plan erases those boundaries. If mandatory fees for Digital Services are implemented, then the NPR Board is reversing, or at least suspending, the most fundamental principles of its current pricing model.

NPR’s Digital Services proposal is not a fee-for-value proposition. NPR isn’t trying to create digital services that can survive in the open marketplace. NPR wants stations to subsidize the creation of what amount to an entirely new member services division by reverting back to the old membership pricing model. Stations must pay for all of NPR’s Digital Services whether they want them or not. Stations with more money pay more, not because they are receiving greater value, but simply because they have more money. And the budget for this new member services division inside NPR will end up being more than twice what NPR currently spends on membership. It will be as large, or larger, than the old Cultural Programming Division budget.

Kind of amazing, isn’t it? After years of trying to break free of the membership model, NPR management is turning to that model to pay for its digital offerings to stations. Not only that, it’s an open-ended subsidy model. It’s an admission that Digital Services cannot survive in the open marketplace for the foreseeable future.

The argument for making Digital Services a part of membership is that such a start-up requires subsidies and full station participation to survive its infancy. That’s a valid argument. The problem with making Digital Services a part of membership is that they will become the equivalent of an entitlement program.

The costs will rise over time. Station usage of services will wane. Like NPR’s program offerings, a few components of the service might become essential, but most will not. There will come a time when half the stations will be using only a third of the offerings. Or something like that. However, just like marginal radio programs, there will be enough stations using each component of the service that their champions will argue to keep them around.

The other problem with the mandatory-fee membership model is that there is no incentive for Digital Services to super-serve the stations. There’s no reason to embrace station success when the station has no leverage in the business relationship. There’s already evidence of this from NPR’s proposal to stations, which didn’t offer a single example of their revenue potential under the Digital Services umbrella. The effort wasn’t even made.

If NPR’s management and Board believe overhauling the membership model to support Digital Services is the way to go, then there’s still a lot of work to do. The idea itself is a major shift in the nature of the membership organization. Such shifts always require a careful reexamination of policies, governance and oversight, lines of accountability and measures of success.

For example, will the Membership Committee of the board have any oversight of Digital Services? Can member stations have direct input on the budget for Digital Services since they are now paying mandatory fees for those services? Should member stations vote on the budget or have to approve budget increases beyond the current business plan? These are legitimate questions once the membership model is invoked.

The thing is there are other, more effective ways to go about accomplishing the objectives of NPR’s digital proposal. There are other approaches that pool resources and encourage broad participation without the draconian steps of overhauling the membership model and imposing mandatory fees. They are not as simple as forcing everyone to pay, whether they want to or not, but they will foster a better working relationship with stations and result in a more robust set of services.

Hopefully, NPR’s leadership will step back and realize that while their objectives might be the right ones, the approach is all wrong. You don’t start a partnership with member stations by forcing radical changes and cost increases on their backs. The membership should be consulted on how to make this work. There are a lot of creative and smart people at stations. As partners, they can help NPR find a way.

*Mandatory - a synonym for ‘required’ but not as apologetic

NPR Still Lacks Champions of Station Success

2011-05-23T17:15:00.001-04:00

NPR now says that the station fees for its new digital services might not be mandatory. According to NPR Board Chair Dave Edwards, the presentation and emails calling the fees mandatory were poorly worded and the pricing model is open for discussion. The news was delivered directly to stations and reported by the industry news service Current.

Current also quotes NPR VP for Digital Services Kinsey Wilson as wanting stations to contribute to the development of new digital services “while they’re still strong in radio.” It is yet another indication that NPR’s senior management believes public radio is, or soon will be, in decline.

Stations deserve better than this. Station audiences and revenues have proved to be resilient, even robust, over the past few years in the face of tough economic times and growing competition from new distribution outlets. It could very well be that public radio terrestrial audiences will not suffer, but be enhanced by offering listeners more ways to find content.

This is the “Both/And” mentality. It looks for opportunity to grow in all possible markets, never conceding ground it owns. Instead, NPR management has adopted the “Either/Or” mentality. It is very limiting. It assumes that one action will cannibalize another. It assumes less market potential for public radio. It would be one thing if the data showed this happening to public radio. But it is not.

NPR is a membership organization. Stations send NPR around $70 million per year in membership fees and dues and directly help NPR raise another $30 million per year by creating audiences for national sponsorships. How can it be that there are no champions of station success at the executive level?

The fuss over NPR’s digital services proposal isn’t about poorly worded presentations or emails. It’s about NPR management lacking a passion for the success of its member stations. You don’t get these kinds of mistakes when that passion is there. In fact, you don’t need mandatory fees when that kind of passion is obvious to the membership.

NPR Digital Update

2011-05-16T22:15:00.003-04:00

--- this post was updated Tuesday May 17th at 7:35a --

Several private emails in response to the last two postings on NPR's Digital Services have said NPR's mandatory fees are for new station services and not to offset the costs of NPR's direct-to-listener digital efforts.

The emails went on to explain that NPR is trying to take a leadership role in advancing station use of digital media. The idea is that stations are expected to forgo immediate return on investment in exchange for advancing their digital capacity.

Let's take that at face value.

First, it should be pointed out that NPR's mandatory fee structure does not apply to stations with Total Revenues under $1,000,000. That will be about 70-75 stations and they get the services for free.

NPR says it is subsidizing the start-up costs for the remaining stations in FY 12 and FY 13 and that those stations will pay full freight -- $4.2 million -- in FY 2014.*

In other words, NPR is taking a leadership role now by subsidizing large portions of the initial costs and spending political capital with stations over mandatory fees. Over three years, NPR is reducing its financial risk to zero, leaving that burden to stations whether they want it or not.

What's missing from this scenario?

Accountability for results.

The business model, as proposed by NPR, shows no accountability to stations for results. The plan, as presented to stations, creates a new services division inside NPR that can be funded in perpetuity without ever delivering sufficient value to stations. That's just wrong.

At a minimum, meaningful and transparent benchmarks for Digital services should be set. Those could include product usage by stations, content consumption by listeners, and revenues earned by stations.

On the revenue side, the Digital services team should be given and held to revenue goals that lead to sustainability for the greatest number of stations. Otherwise, where's the incentive do more than just make cool stuff for the web? It's kind of like the old days, when making the radio program was enough and it didn't matter if it was heard. We're smarter than that now.

A better plan, and one that would demonstrate more leadership on the part of NPR's board and management, would be for NPR to subsidize the project at 100% for the first three years. Take all of the risk and don't force any of it on stations. Give the digital team three years to create value for stations, and then put it on the market for stations to support. If stations don't see the value after three years, then then project can go away.

$4.2 million in the third year might seem like a big risk for NPR by itself, but it's not. NPR leadership has already decided to subsidize its own digital effort to the tune of millions of dollars per year.

Surely NPR can find that kind of money to invest back in the stations that deliver nearly 30 million weekly listeners and more than than $100 million in annual revenue.

If not, perhaps NPR can adopt a true public radio funding model. Create the service, give it to stations for free, and then ask stations to voluntarily support it with a contribution. Hey, it works!

---------

* That $4.2 million includes "digital content fees." It's not clear what those are, but they might be a second charge for the programming stations are already broadcasting on-air. This is an option NPR's digital team has raised in the past. If so, the cost of these new digital services could be reduced by eliminating the double billing.

NPR’s New Digital Strategy Relies on Old, and Reviled, Budgeting Practices

2011-05-16T19:35:00.000-04:00

The NPR budgeting process throughout the 1980s could best be described as torturous. The annual budget had to be approved by stations in a vote at each Spring’s Annual Membership meeting.

Member stations, usually through the regional organizations, weighed in on specific spending items and whether they really belonged in the budget. The proceedings were time consuming and often contentious as stations and NPR managers wrestled over expenses as small as a few thousand dollars.

NPR adopted a new budgeting process in the early 1990s called “the lockdown.” It was designed to take confrontation out of the budgeting process. Its goal was to provide NPR with stable income and stations a predictable fee structure that allowed for better budget planning.

Proposed by the Station Resource Group (SRG) on behalf of its member stations, “the lockdown” business model was built on a very simple idea. Stations would pay a fixed percentage of their revenue to NPR – 10.1% for the Newsmagazines – and NPR would have to live within that budget. It was revenue-based budgeting. If station revenues grew, NPR’s budget grew. If NPR signed up more stations, its budget grew.

In exchange for a predictable dues structure, stations conceded their right to haggle over every budget item. In exchange for budgeting freedom, NPR gave up its right to dramatically increase its spending and then lay that burden on stations. It was a change that significantly improved NPR-Station relations.

There was a second important change to NPR’s pricing policies in the 1990s. That was the unbundling of program packages. It used to be that if a station wanted to buy Car Talk, it was forced to buy the entire package of Cultural and Arts programs from NPR. It didn’t matter if a News station didn’t want to buy World of Opera, it came with the package. Deciding this wasn’t fair to stations, the Board required NPR to change that pricing practice and allow individual program purchases

With its new digital strategy, NPR management is trying to selectively suspend the principles of revenue based budgeting and unbundling. The proposed digital strategy is a throwback to a late 1980s business model. Actually, it’s a 50% throwback. NPR wants the luxury of laying the financial burden of fledgling projects on stations without station oversight of its spending.

And what exactly is that burden? It’s hard to tell. This year, the budget for NPR Digital is around $16.5 million. Corporate sponsorships for digital are estimated to be $9.1 million. That’s a $7 million shortfall. Foundation grants, major gifts, and sales income make up some of that shortfall, but NPR must be filling the gap with surpluses from programming sales to stations and broadcast program sponsorships, which is exactly the right way to go about it.

It appears from the digital tax proposal that NPR cannot or is no longer willing to use those surpluses to cover the entire revenue gap. That’s likely to be millions of dollars annually. It raises an important question. If NPR doesn’t want to subsidize digital with the money its earned, why does it believe stations should bear that burden?

As has been noted many times before on this blog, public radio’s revenue issues are often not fundraising problems, they are spending problems. Everyone believes it is important to invest in digital, but at what price? Perhaps some belt tightening at NPR digital is in order before bringing back the toxic budgeting practices that caused so much damage to the NPR-Station relationship in the past.

NPR Plans Mandatory Digital Tax on Stations

2011-05-14T11:21:00.000-04:00

NPR is unveiling an expansive network-station digital strategy at a series of meetings around the country. NPR is promising the moon to stations and ending the presentation with a “business model” that is nothing more than a mandatory tax on all stations for NPR digital services, whether the station uses the services or not.

That’s right, NPR management wants to force stations to buy its digital services package for up to $99,500 per year even if the station doesn’t want to use those digital services.

The presentation suggests that stations will earn revenue by using NPR’s digital services, but no revenue projections are given. A station paying nearly $100,000 per year has to take it on faith that it will see a return on its mandatory investment in NPR services.

It’s clear that NPR’s primary goal behind this strategy is to raise cash for its national digital services, which continue to lose money. NPR wants stations to believe, without showing revenue potential, that they can profit through NPR’s digital services even though NPR itself cannot.

When the NPR board adopted listener-hour pricing for the newsmagazines, it established the principle that the return on investment for stations should be at least 100%.* That same principle should apply to NPR’s digital services.

A true business model would show stations a meaningful financial return on their investment through new revenues, not cost-savings. Heck, a true business model would require NPR digital services to compete for a piece of the station’s budget. Instead, the “business model” taxes the revenues stations raise from their broadcast operations to fund NPR’s money losing, direct-to-listeners programming service.

None of this should be surprising, however, given NPR’s approach to digital in the past 24 months. Every time NPR has talked about partnering with stations on digital, it has talked about charging stations money.

That’s not partnership talk. Think about it. How many businesses talk publicly about taking money out of their partner’s wallet? Even fewer talk about forcing their partners to give them money when the partner doesn't want to participate in the venture.

It looks as though the Vivian Schiller station-relations philosophy has yet to leave the building.

* Stations currently derive a larger gross return on investment on the newsmagazines. The 100% return rate is actually too low on a gross-revenue basis to sustain stations so the pricing model never reached that threshold. If NPR ever pushed rates that far, many stations would have to drop All Things Considered and maybe even Morning Edition.

Disclosure: JSA provides consulting services to Sky Blue Technologies which offers Listener Interactive mobile apps and web streaming services to public radio stations.

Are On-Line Listeners Even More "Elite?"

2011-04-19T10:11:00.000-04:00

Among the comments AIR Executive Director Sue Schardt made to the NPR board is that NPR has attracted an audience that was "predominately white, liberal, highly educated, elite."

Elite is such an interesting word to use to describe public radio listeners, especially in the context of diversifying the audience.

What make them elite?

Certainly not being white. What about being liberal?

NPR refutes the claim that the audience skews liberal, showing a relatively even distribution of political orientation among its listeners. What about age?

It turns out that the median age of the NPR listener is 50, just 5 years older than the national average. Does being slightly older make one elite? Probably not.

What about education level? Does being well-educated make one elite?

NPR Podcast users are much younger than public radio users (33 vs 50), yet are more likely to have a college degree (83% vs. 68%).

If elitism and education go together, then public radio's on-line audience is shaping up to be more elite than its radio audience.

Maybe it's money that makes public radio listeners elite. The median household income in the U.S. is $53,600. For public radio users its $90,000 per year. For NPR Podcast users its $76,000. 33 years old and making $76,000 per year. Imagine how much money they will be making when they are 50.

If elitism and income go together, then public radio's on-line audience is shaping up to be more elite than its radio audience.

All of this runs counter to the rhetoric in public radio that on-line services are the answer to diversifying the audience. If anything, the current trend is for on-line to attract a younger, more educated, and wealthier version of the current audience.

NPR hasn't released data on the ethnicity of on-line listeners, it might not have that data, but that doesn't really matter. Even if the skin color of on-line listeners is more diverse, it doesn't mean those listeners will be less elite.

If the goal to diversify public radio by making it less elite, then the public radio's on-line efforts might be hurting rather than helping the cause.

Wittingly Growing the Audience We Have

2011-04-13T12:20:00.000-04:00

What happened … is that we unwittingly cultivated a core audience that is predominately white, liberal, highly educated, elite. "Super-serve the core" — that was the mantra, for many, many years. This focus has, in large part, brought us to our success today. It was never anyone's intention to exclude anyone. -- Excerpt from comments by AIR Executive Director Sue Schardt to the NPR Board of Directors.

Actually, it was intentional.

It is an indisputable truth that every programming decision is a decision to serve a specific segment of the population. Every choice rules out far more people as potential listeners than it includes. That is how radio works. That is how all media work. To believe it could be otherwise is naïve. To spend as if it could be otherwise is folly.

By focusing on the building the core audience public radio programmers, managers and funders perfectly understood they were choosing to serve some listeners and exclude most others. After all, the majority of people in this country are not interested in hearing 8 minutes on credit default swaps or spending a few hours on a Saturday afternoon listening for the F-bomb to drop during the Met Opera’s broadcast premiere of Nixon in China.

Some history. In the late 1970s and early 1980s public radio attracted a very small and unique audience. Those listeners turned out to be knowledge-seeking global citizens who were curious about science, had a strong interest in art and culture, possessed diverse tastes in music, were concerned about community and committed to social causes.

Those listeners came from population segments now known as Innovators and Thinkers, as described by VALS research from SRI. Innovators and Thinkers are mostly white, highly-educated, and have above average household incomes. Today, they represent about 25% of the U.S. adult population and the overwhelming majority of public radio’s weekly audience.*

Beginning in the mid-1980s, public radio wittingly chose to use research and good radio practices to serve Innovators and Thinkers better. In doing so, public radio chose to exclude from its audience most of the other 75% of the U.S. adult population, people who didn’t necessarily have Innovator/Thinker traits or at least a high enough concentration of them to find public radio’s content of personal value.

There are several reasons this was a good choice. First, there were not enough resources to serve 100% of the population, or even 50% of it, well. There still aren’t enough today. It’s taken hundreds of radio stations, billions of dollars, and decades of work for public radio to build the audience it has. Second, public radio’s federal funding came under attack in the early 1980s. Industry leaders correctly recognized that the audience it had could help support public radio financially, especially if that audience grew. Third, the people in public radio, with a few exceptions, weren't capable of making programming for people who weren’t like them. That’s still true today.

By concentrating resources on the listeners it naturally attracted, and choosing to not serve most of the population, public radio efficiently and effectively grew a sustainable audience. It’s an audience that has grown in the face of strong competition from new media and a serious decline in overall radio usage.

The path public radio followed to achieve its current audience success is still the right path to follow if public radio wants to serve a different segment of the population. That segment has to be identified by its interests and values (not the color of its skin) and it has to be super-served by people who share those same interests and values.

Anything less would be a waste of time and money.

* Source: Audience 98. SRI changed VALS segmentation slightly over the years. Innovators and Thinkers used to be Actualizers and Fulfilleds.

Failure to Diversify is a Leadership Issue

2011-04-12T10:30:00.007-04:00

There's nothing like a Federal Funding crisis to send public radio into fits of guilt over the size and diversity of its audience. The latest wave seems to be started by Sue Schardt, Executive Director of the Association of Independents in Public Radio (AIR). She spoke to the NPR Board about rethinking public radio's programming strategies and who public radio serves. Her comments appeared in the industry newspaper Current.

For Schardt, it's not enough to have 11% of the U-S population listen to public radio weekly and more than 20% listen monthly. That's right. 20% of Americans listen to public radio each month according to the audience estimates created by Station Resource Group (SRG) for 170 Million Americans campaign. Twenty percent!

And Schardt is let down by that.

Her disappointment is due largely to the demographics of public radio's audience, which despite more than two decades of major efforts to diversify, remains predominately well-educated, upper middle class white people.

Schardt attributes this to public radio's focus on growing the Core audience over the past two decades. There's a lot of truth to that. We’ll cover that topic in the next posting and why it’s not a bad thing, even though it is now being positioned as such.

There's also one other essential fact that Schardt leaves out of her public radio audience overview.

Public radio's demographics look almost exactly like the demographics of public radio's executive leadership, including her.

It turns out that the predominately well-educated, upper middle class white people in charge of public radio policy, funding, and programming are very, very good at making radio for their demographic peers and no one else.

The leadership talks a good game when funding is on the line, but the track record shows a different story. After two decades of trying, public radio’s white leadership is incapable of diversifying the audience in any meaningful, measurable way. Just try and find an audience report from CPB or NPR that shows a diversity initiative that yielded audience growth among minority listeners.

Or, look at Grow the Audience, public radio’s current “effort” to diversify listenership. Here’s a CPB-funded project that listed Inclusiveness (the new “diversity”) as its primary goal, yet the project was managed exclusively by white people and its Task Force was initially formed without a single Black or Hispanic station manager, program director or program producer. After public criticism, the project added one Hispanic station manager/programmer.

Here was an opportunity to diversify from within the industry, to bring new people to the seats of public radio power, and CPB fumbled it. Remarkably, this happened around the same time CPB Radio VP Bruce Theriault challenged public radio to “throw open its doors to new people.”

It also turns out that the Grow the Audience Task Force was formed almost exclusively from members or partners of the SRG. That’s not exactly throwing the doors open to new people, especially at the executive level. And finally, there is CPB radio management. There’s no new blood there either -- the executive team is made up of white, public radio veterans -- even after Theriault’s challenge to the rest of the industry.

CPB isn’t alone in talking diversity while failing to implement it at the highest levels of public radio power. Programming executives and major program hosts at all three major networks are predominately white. Even the Association of Independents in Radio chose a white, 20+ year veteran of public radio to be its leader – Sue Schardt.

You know the saying, “insanity is doing the same thing over and over and expecting different results.” It applies here. For two decades, public radio policy-makers and executives have viewed diversity as a problem to be solved outside its predominately white, veteran power structure through the distribution of money and top-down management. But that’s failed too many times to believe it could ever succeed.

As an industry, we are extremely good at serving listeners like us and no one else. The only way for public media to realize Sue Schardt’s vision of reaching more and different Americans is to hand power and money over to more and different Americans and let them take a shot at it. The question is, do we believe in the mission of public media strongly enough to do that or are we keeping the money and power for ourselves?

Grow the Audience: A Disappointing First Year

2011-03-21T14:36:00.000-04:00

The SRG has issued a one-year update on the CPB/SRG Grow the Audience project. The report, to say the least, is rather disappointing.

It's largely a technical explanation about why national audiences are difficult to measure given Arbitron's conversion from diary measurement to PPM measurement. It offers no reports or updates on specific efforts nationally, regionally, or locally to actually affect audience growth.

In fact, since the initial Grow the Audience report was published a year ago, the project has released nothing about CPB's investments in meeting the project goals. There's nothing on the CPB site about the Grow the Audience project and its efforts to affect audience growth. This report appears to be an update on nothing but the hope that the audience might be growing.

On a larger scale, there's no system buzz around the Grow the Audience project. The project was absent at the Public Radio Programming Conference. It has little or no buy-in at the station level.

What started out as an attempt to pull the system together with a common goal has failed to do that in its first year. Grow the Audience has no champions. It has no cheerleaders, not even among the people who conceived of and funded the project. And that's the biggest disappointment of all.

Trust the Listeners

2011-03-13T22:20:00.000-04:00

In an e-mail to NPR station managers this weekend, Interim NPR CEO Joyce Slocum said last week was a "bad week for public radio."

It probably felt that way to many people who work in the industry, but it is unlikely listeners think of it that way.

Listeners' perceptions of public radio are shaped almost exclusively by what they hear on the radio. They are further shaped by their experiences with public radio web sites, mobile apps, emails, and direct mail letters. Lastly, and in minuscule amounts, listeners' perceptions are shaped by what they read or hear about public radio's inner-workings.

Last week, while public radio employees rightfully fretted over Schiller Theater, listeners were hearing exceptional international news coverage from Egypt, Tunisia, and Japan. Listeners stayed informed of the battle over collective bargaining rights for public employees. They heard about Supreme Court rulings, discovered new authors and artists, laughed with the Car Guys and Keillor, yelled out the answers to Peter Sagal, and sat transfixed at the stories spun by the folks at This American Life.

Last week was a very good week for public radio listeners. As most weeks are.

And it was a good week for stations doing pledge drives, at least the ones we know about. Our company had a few clients finishing up pledge drives and The Schiller (times two) news had no discernable effect on the results.

Why should it? Imagine the listener who hears that some NPR executives screwed up and were subsequently terminated from their positions. Listeners hold the entire organization to the standard of excellence set by the programs. If some execs failed to meet that standard, then it makes sense that they had to go. It's not like NPR fired Bob Edwards again.

That brings us back to the programming. It remains exceptional. Listeners know that. and they will remain listeners even when we practically beg them to go away -- like during pledge drives or when we suddenly fire the person they woke up with for more than a decade.

Nearly 30 million strong, public radio listeners are the foundation of our industry. They ultimately hold the cards when it comes to public radio's financial future. That's true whether the revenue source is donations, underwriting, or tax-based funding. It wasn't a bad week for them. And everything will work out as long as public radio keeps on delivering good weeks of listening.

Trust the listeners. They will not let you down.

Thank You Ellen Weiss

2011-01-09T20:40:00.000-05:00

By now you probably know that NPR's Senior News VP Ellen Weiss resigned her post as part of the fallout from firing Juan Williams.

The Washington Post has a follow-up article on industry reaction to her resignation and there are several references to her many significant contributions to public radio. Not listed was her role in expanding All Things Considered to two hours each evening and, more importantly, moving the start time of the program an hour earlier, to 4pm.

In the mid-1980s, it was obvious that East coast stations were losing audience by not having All Things Considered on at 4pm. Stations in the Central time zone and west enjoyed good success with the earlier broadcast. For years, NPR News leadership and the staff at All Things Considered turned down frequent requests from stations to start the program an hour earlier. It was All Things But That Considered.

That changed when Ellen was Executive Director of the program and Bill Buzenberg was the News VP. Ellen thoroughly researched the stations' needs, NPR's capacity to make the change, and the cultural shift it required in the newsroom. Though the move would be unpopular with her direct staff and other newsroom colleagues, she came down on the side of... the listeners, and as a result, stations.

The move to a 4pm (et) All Things Considered was one of the most significant steps in public radio's growth as a national news outlet. Hundreds of thousands of new listeners could now hear the program at a time convenient to them. Those listeners then found other programs on local stations and eventually became donors. Today millions of people get their news during this hour. If you're one of them, then you have Ellen Weiss to thank.

I worked directly with Ellen Weiss for several years at NPR and that was how she operated -- in the best interest of the listeners. It is NPR's loss that she will no longer be there to offer her insights.

NPR's loss does not have to be public radio's loss. Significant investments are being made at many public radio stations as they seek to become major players in local and regional news. One of those investments should be in the experience and wisdom of Ellen Weiss.

Turns Out People DO Know About Public Radio

2010-12-22T12:05:00.000-05:00

One of the great myths around public radio is that audiences would be bigger if only more people knew about it. If only public radio could advertise with the big boys...

Researcher David Giovannoni challenged this thinking beginning in the 1980s. His point, which is proven once again by the 170 Million Americans project, is that public radio's total audience is much bigger than the Weekly Cume audience.

Giovannoni pointed out that Weekly Cume audience estimates are a necessary, but artificial snapshot of the audience. The Weekly Cume is necessary for advertising and public relations. People need a number they can wrap their heads around and compare to other stations and media outlets. The Weekly Cume is artificial because it stops counting new listeners to the station after seven days -- as if everyone who might listen to a station absolutely will listen within a seven day period.

Giovannoni called this the Cume Trap. The concept is simple. Public radio leadership could get trapped in its thinking about its public service potential if it gave too much weight to the Weekly Cume versus other, more useful public service metrics.

In one of his Radio Intelligence* reports for the industry newspaper Current, Giovannoni showed how public radio's audience was likely to grow if measure by the month or even the year. The Monthly Cume, based on Arbitron's diary measurement system, would be somewhere around 42% larger than the Weekly Cume.

Fast forward to today. The Station Resource Group (SRG) just put together a monthly audience estimate for all of Public Media as part of the effort to defend Federal Funding. Using Arbitron PPM and diary measurements, the SRG puts the monthly audience for public radio at 64.7 million listeners. That's more than double the current weekly audience of 30 millions listeners.

Imagine! There are twice as many people who know about public radio than reported in the Weekly Cume. Some of those are passive listeners. They are exposed to public radio through someone else's listening in a car or at work. But most of those listeners know about public radio and where to find it on the dial. They simply choose to listen less than once per week.

This group of people, they represent growth potential. Public radio just has to give them reasons to listen more frequently. This is not a new concept.

These very fringe listeners have always been the source of public radio's audience growth. They knew about public radio before the first Gulf War and when it broke, they turned to public radio for the news. They knew about public radio before 9/11 and when their understanding of the world was shaken apart, they knew where to turn to piece it together again.

They come when they need public radio and, unlike audiences for many of the cable news networks, many stay in the Weekly Cume. They value the news. They get hooked on the entertainment programs. They become Core listeners. They give.

Some don't stay. But they will listen on occasion. Right now, the SRG is saying that there more than than 30 million of these very fringe listeners who are only partially served by public radio. Who are these listeners? Are they older? Younger? From different ethnic groups? What brings them to public radio? What keeps them from listening more?

As the industry ponders how to Grow the Audience, they seem like a very good place to focus the effort.

* Read Radio Intelligence at ARA's website. Click this link then scroll down to and click on the the PDF for Radio Intelligence. Page 27

Public Radio News Still Under the Radar?

2010-12-21T11:24:00.003-05:00

Interesting article on Mashable.com -- 10 Predictions for the News Business in 2011. But not a mention of public radio news.

And We're Back...

2010-12-21T11:10:00.001-05:00

It was an extremely busy fundraising season and the blog didn't get any attention for a few months. Yes, it was that busy in November and December. The era of two pledges drives per year is long gone. Most stations do three. Some do four. Others more.

Expenses are rising faster than stations can create fundraising efficiencies. We expect to see even greater pressure on pledge drives in the coming years as stations continue spend on web and local news activities that are not fully paying for themselves.

December is turning out to be a very good fundraising season for stations, those doing pledge drives and those just increasing the amount of snail mail, on-air spots, and email appeals. There is growth potential here.

We expect 2011 to be a another good year for membership fundraising, especially if the battle over federal funding for public radio spills into the general media. The more publicity the issue gets outside of public radio, the better it will be for fundraising.

Conversely, if the issue fizzles publicly, then its impact on membership fundraising will be minimal. This happened about five years ago when several stations tried to turn an effort to cut CPB funding into a fundraising theme. The threat was real but the issue never popped on TV news, on the cable networks, or with the major newspapers. The whole thing sounded like stations crying wolf to make a few bucks. It was highly ineffective.

The fact is, more listeners will start giving and current donors will give more without prompting once they see a threat that's real. They get it. And we do think the issue will pop. After all, Fox's Roger Ailes seems eager to play the role of Next Gingrich this go around.

Our advice to stations -- don't rush into fundraising around federal funding until it plays out a bit more. This is a serious issue and you don't want to sound like you're happy to exploit it for fundraising purposes.

Fox Reports, Public Radio Listeners Decide

2010-10-22T10:05:00.000-04:00

Day Two of the Juan Williams predicament. We've heard from about a dozen stations holding pledge drives. All of them are fielding lots of complaints about NPR's firing of Juan Williams. But they still are meeting or exceeding pledge drive goals. New member results appear to be as strong as usual.

What's up with that, you ask?

It turns out there are two types of complaint calls -- those coming from thoughtful, calm people who express their disappointment at NPR's handling of the situation and those coming from people who were incited to call by watching Fox News.

A large number of callers are claiming to be donors but their names do not appear in the station's donor database. Very few current donors are asking for refunds on contributions.

We're also starting to hear about people giving additional gifts to the station. That's not surprising given the calls to eliminate federal funding for public radio. Loud opposition to federal funding always motivates listeners to give.

Juan Williams and the Opinions of Journalists

2010-10-21T12:13:00.001-04:00

NPR terminated the contract of Juan Williams yesterday in response to a comment he made on Fox's Bill O'Reilly Show. Here's what he said, according to FoxNews.com:

"I mean, look, Bill, I'm not a bigot. You know the kind of books I've written about the civil rights movement in this country," Williams told host Bill O'Reilly during a discussion on the dilemma between fighting jihadists and fears about average Muslims.

"But when I get on a plane, I got to tell you, if I see people who are in Muslim garb and I think, you know, they're identifying themselves first and foremost as Muslims, I get worried. I get nervous," Williams said.

This incident comes at an interesting time for public radio. There is a movement in the industry towards having journalists do more of their work in the first person. The idea is that reporters also have to have some personality and let the listeners know who they are and that will attract a bigger audience. Sometimes that means including the reporter's laugh in the final edit. Sometimes that's injecting the reporter's personal anecdote into a story. Sometimes that's allowing the reporters to share an opinion on the topic or subject of the report.

It was suggested twice on the closing day of last month's Public Radio Programming Conference that it's okay for a reporter's opinion, even bias, to show as long as the report itself is balanced. The concept even has a name -- "opinionated journalism."

That seems to be a slippery slope, one that leads straight to the current situation with Juan Williams. Once personal opinions become part of the on-air equation, who gets to decide which reporter opinions are appropriate for air -- the reporter, the editor, the supervisor, the Board of Directors, a corporate funder, a major donor? Even more to the point, who gets to decide which opinions are appropriate for employment in the newsroom in the first place?

Everyone has an opinion. Everyone is biased. Public radio news listeners expect that bias to be put aside in the name of honest, accurate journalism. It is one of the most treasured standards of professionalism in our industry. It's one of our Core Values.

There's room in public radio for opinions. There's room in public radio for journalism. But as the Juan Williams story unfolds, it's pretty clear they don't mix. "Opinionated journalism" is not only a bad idea, it's an oxymoron.

New Study Shows I Was Wrong

2010-10-18T18:30:00.000-04:00

A new study from the Peyou Research Center overwhelming shows that I was wrong in everything I believed about public radio. The study, conducted among 2,426 public radio listeners around the country, shows that everything I thought I knew about pledge drives, programming, and audience response was, in fact, wrong. The margin of error is four percent.

For decades, everything I’ve blogged about and presented at conferences – wrong. Every single recommendation as NPR Research Director and as a station consultant – you might as well just believe the opposite. Some highlights from the study:

Pledge Drives

Listeners actually love pledge drives. Foremost, they treasure the break from regular programming, especially when the news is hard to take. Survey comments show that nothing relieves the tension of ongoing wars and economic woes more than hearing about a new stainless steel travel mug. As one 44 year old female respondent put it, “I often turn the radio up during the pledge break because the announcers are so entertaining as they debate the hue of the station logo. You need that after hearing the tragic stories of tiny children in war-torn countries.” The study also shows that 98% of donors do believe the sweatshirt alone is worth the $150 they spent on it.

Programming

Contradictory to everything I thought I knew, listeners, including most young listeners, love opera and any other broadcast aimed at the highest common denominator. In fact, they value and commend public radio for raising the common denominator to record levels. It keeps the low-lifes out of the audience. This point was especially strong among listeners with at least 3 post-graduate degrees whose parents forced them to take singing lessons through high school.

Audience

Listeners also like self-indulgent correspondents and hosts who talk in the first person, inject personal references into their stories and use the phrase “If you’re like me.” The study shows that most listeners (83%) really do want to be just like the person they are listening to at that exact moment, even though they’ve never seen them. And that bring us to the most stunning finding of all, the one where I was most wrong.

There are way more Black and Hispanics listening to public radio than I ever thought. Tons more. It turns out that listening to public radio’s elite and highbrow announcers make minority listeners feel “just like them” – White! So when Arbitron asks about their ethnicity...

Who knew?

Not me. I was wrong.

Sorry.

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Looking ahead to future posts -- why trying to attract more public radio listeners using first person reporting and satire might be a bad idea.

It's the Steak, Not the Sizzle

2010-10-11T22:37:00.001-04:00

Last month’s Public Radio Programming Conference was heavy on new technology and the changing media landscape. There was also a lot of discussion about how public radio programming must change to get new listeners.

On the last day, NPR presented new research defining audience segments that represent growth opportunities. There’s a lot to like about this research but there are some findings and conclusions that generate concern. You can read more about it at Current.org.

On the up side, NPR’s new research provides audience insights that will help with promotion, marketing, and fundraising. There are also good insights on how listeners are using public radio and other news outlets across media platforms. This should be useful to programmers as they consider how to serve listeners over the air, on-line, and through mobile devices.

Once again, however, public radio is confronted with a study that says a key to future radio audience growth is an issue of style over substance. Public radio’s “eilte” and “highbrow” sound have again been targeted as a barrier to entry for non-listeners, especially minorities and younger adults. This is an over-simplification that public radio cannot afford to accept. Here are some reasons why:

1. It Ain’t Broke. Public radio’s current style is growing audiences in the face of declining radio usage. If “style” is in play as a barrier to listening, then it must also be considered a factor in attracting and keeping listeners. Changing it will have a negative impact on the current audience.

2. All Content Helps Determine Who Listens. Imagine a young and hip sounding story or interview on Morning Edition immediately followed by a local announcement asking listeners to remember public radio in their wills. Increasingly, the underwriting announcements on public radio are aimed at the medical, retirement, and on luxury item interests of listeners ages 50 and older. A quick tour through the NPR program rundowns this year reveals many interviews with people who are culturally significant to Baby Boomers but not to younger Gen Xers and older Millennials.

The NPR newsmagazines represent less than half of all listening done to the public radio stations that carry them. It is folly to believe that minor changes to NPR’s style will result in major changes in program or station audience composition. Public radio makes this mistake again and again. Significantly different results require a significantly different effort, not just tweaks to the core programs.

3. Demographic segmentation, not aggregation, is a four decade long trend in media. Audiences are becoming more niche. They are not broadening. There’s a great saying for this, “25 to 54 is not a demographic, it’s a family reunion.” Public radio might be able to attract younger listeners with different content on new media platforms, but it’s not going to grow the younger audience among broadcast listeners without losing Core listeners, and donors, among the 50+ audience.

In the past decade NPR replaced Bob Edwards with Steve Inskeep and Renee Montagne. The program is more conversational, moves at a quicker pace, and lets the hosts interject first person references and laugh out loud. The Takeaway was specifically designed to address the “problem” of public radio’s style. In the past two years, This American Life and Planet Money have reinvented economics reporting making tough issues easier to understand by “talking the way normal people talk.”

Yet the latest research once again shows that public radio’s elite and highbrow sound remains a barrier to growth. Changing hosts and presentation style hasn’t changed the perception. Public radio’s audience has grown despite the perception among non-listeners that it is elite and highbrow. That doesn’t add up, unless the objections to public radio’s style are not the true barrier to listening.

It could very well be that public radio’s audience has grown, in part, because of its style. No one is asking new listeners why they have come to public radio and how they became core listeners. Unfortunately, there seems to be little interest in researching and understanding public radio’s ongoing success. And that could turn out to be quite harmful to public radio’s audience growth in the future.

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Digital idea: Radio presents barriers to growth because the formats are becoming more niche and because of limited bandwidth. Decades ago, research David Giovannoni suggested public radio could develop two news networks -- NPR "old" and NPR "young," if you will.

The industry might not have enough radio stations to pull off two separate networks but there is sufficient bandwidth on the web to do that. What if there was a separate "program director" of an NPR web service (web site plus social media) aimed at younger listeners? Imagine being able to pull from NPR content plus PRX and other resources to target an under-40 crowd on the web. All of the content, including ads and promotions could be aimed at that audience. That would be an important and worthwhile experiment in attracting a demographically different audience.

What is Public Radio’s Next Surplus (Profit) Center?

2010-07-15T10:20:00.001-04:00

Public radio is embracing its non-profitness these days. Driven by the collapse of the for-profit newspaper model, the industry’s leaders point to public radio’s multiple revenue streams as a way to save serious journalism in America.

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.

The Best Fundraising News in Years

2010-07-12T07:39:00.000-04:00

Public radio stations have a strong tradition of sharing innovative and proven practices. It’s one of the industry’s best traits and it was on full display at this year’s Public Media Marketing and Development Conference.

That’s where Minnesota Public Radio (MPR), WBEZ Chicago, and WNYC/WQXR New York shared their success in developing sustainer fundraising programs. “Sustainers” donate to the station on an open-ended, monthly basis via credit card or an electronic funds transfer from a checking account.

Sustained monthly giving has been somewhat of a holy grail in public radio fundraising and while some stations had some success with it, these stations have unlocked to route to it. MPR has dramatically increased its annual donors in the past two years through sustainer programs while reducing on-air fundraising days by 25%. You can read about it in Current, the trade publication for public radio and TV.

Nearly 40% of WBEZ’s donors are Sustainers and they account for half of the station’s membership revenue each year. Having more than $300,000 in monthly revenue has helped the station’s cash flow and allowed WBEZ to become less-dependent on traditional pledge drives.

Consumer acceptance of automatically paying for services such as Netflix probably played a big role in the success of these sustainer programs but that success was no accident. The folks at WNYC made a concerted effort to introduce monthly giving at the outset of converting WQXR from a commercial to a public radio station and they were very successful. WBEZ has developed some excellent donor-service practices to make the sustainer experience a rewarding one for the listener.

Best of all is that these organizations came to the conference as evangelists for the Sustainer approach. They backed their enthusiasm with free support materials and advice to help other stations jumpstart Sustainer programs. NPR is also making a significant contribution to the Sustainer revolution by providing listener and donor research on Sustainers.

Many thank to Valerie Arganbright from MPR, Andrew Arganbirght (yes, they are related) and Jill Shepherd from WBEZ, Lisa Torres from WNYC/WQXR, Lori Kaplan from NPR, and Barbara Appleby (formerly NPR and now MPR) for providing this leadership.

It all adds up to the best news in year in public radio membership fundraising – more donors, net revenue, less on-air fundraising, and new possibilities for creating a more positive experience for those who give to public radio. This is something every station can benefit from in the next few years.

PMDMC 2010

2010-07-08T11:12:00.000-04:00

The gathering formerly known as the Public Radio Marketing and Development Conference is underway in Fort Worth. The word "Radio" has been replaced with "Media" in the conference title this year. This is the PMDMC not the PRDMC.

This sort of makes it official that the industry its abandoning its brand as the leading provider of radio programming. The industry's marketing mindset is that we are not radio anymore. It will be interesting to see what effect that has on radio audiences over time.

Most of the people here are in radio jobs at their public media outlets. The new conference name does raise the question, "why do we need separate public TV and public radio conferences anymore since we're all in public media now?"

Attendance is up 22% over last year and the state of the economy seems to be less of a concern among the folks I've met so far. It seems most public media outlets here had good Winter and Spring fundraising seasons.

NPR's new CFO hire has generated a little buzz given her commercial radio background. Having come from commercial radio, albeit a different era, I think it could be a good thing.

It raises some really interesting and valid questions about the spending side of the industry's business model. Commercial broadcasters, of course, try to minimize the cost of content creation. It will be interesting to see if and how that value is applied at NPR.

Here's one way to think about the difference between the commercial radio spending model and the public radio -- excuse me -- public media spending model:

In public media we have 5 hosts for 2 programs. In commercial radio they have 2 hosts for 5 programs.

Steve Inskeep voicetracking All Things Considered before he leaves each day? Nah....

Is it Really Your Pleasure?

2010-07-01T20:25:00.000-04:00

This blog rarely delves into the content of public radio programming. This is an exception.

Public radio is known for its relative politeness compared to other electronic media, sometimes to a fault. My colleague Sonja Lee refers to this as “public radio nice.” That’s when strong words and images would be more effective but they are softened because it wouldn’t sound as pleasant. It wouldn't sound public radio. It happens in news programs, in talk programs, and in fundraising.

A component of “public radio nice” is the phrase “my pleasure.” It shows up a lot in interviews, usually at the end when the program host thanks a guest for being on the air. It’s amazing what some guests get pleasure from talking about. A few examples:

14% unemployment in Racine, WI… “My pleasure.”
The Koreas moving closer to war… “My pleasure.”
Convicted sniper to be executed… “My pleasure.”
Top Kill fails, oil still gushes into Gulf… “My pleasure.”
Failed nation-building in Afghanistan… “My pleasure.”

Maybe these guests really do find it a pleasure to be discussing such issues. After all, they are getting national exposure for being experts in their fields.

I’d like to think that the use of the phrase “My pleasure” in these situations is no more than the guests’ automatic response to the host thanking them for their time, that it doesn't reflect a true sentiment. If so, there’s not much a producer can do when that happens in a live talk show. But why is it left on the back end of edited interviews where it is entirely inappropriate?

Have the editors thought this through? Do they really believe the guest is deriving pleasure from talking about difficult and sometimes tragic situations? Or is this just another example of trying to sweeten the air sound with a spoonful of “public radio nice?”

Financial Adversaries or Financial Allies?

2010-06-28T07:57:00.000-04:00

We've heard that NPR management and the NPR board are starting a new conversation about public radio's financial future in the digital age. That's a good thing.

We think one of the critical questions to be answered is this, "are NPR and its member stations financial adversaries or financial allies?"

The obvious answer should be "allies" but that's not how it's been. Decades ago, NPR's budgeting process was extremely contentious, and often adversarial, as NPR tried to grow and stations tried to keep their NPR dues to a minimum. Tensions were reduced, but not eliminated, when NPR's fee-setting procedures were largely linked to revenue or audience performance. Tension is on the rise as NPR builds an audience and revenue base independent of stations.

Many station managers see this as a threat and NPR often fuels their fears through its actions, or inaction, regarding the future public radio business model.

But NPR is not solely to blame here. Public radio station managers have to accept that the business model is changing and that clinging to the policies and practices of the past could severely damage their futures.

The problem is that there's not enough trust between NPR and its stations to fully implement the types of changes needed to help stations thrive in the digital marketplace. We covered the trust issue in a previous RadioSutton post.

Even if NPR made all of the right moves (and it hasn't), it has developed fundraising initiatives and floated ideas that could greatly benefit stations and NPR. Many of those ideas never gain traction because of a lack of trust on the part of stations.

For public radio to move forward, more station managers have to show some leadership and take some risk by trusting NPR. No matter what NPR does, it cannot function as a financial ally to stations if station managers have already decided NPR is a financial adversary.

Then a Miracle Occurs

2010-06-18T17:48:00.000-04:00

The current plan for public radio's financial future reminds me of this classic Sidney Harris cartoon.

DeadRadio 2020: The Financial Implications

2010-06-10T16:01:00.000-04:00

During her interview at the D8 conference, NPR’s President and CEO Vivian Schiller talked about the death of radio broadcasting in the next decade. She referred to it as the end of the monopoly of the broadcast tower.

This posting is about how today’s public radio economy depends almost entirely on the monopoly of the broadcast tower. It is not a debate about the death of broadcasting. We disagree with Schiller's assessment. This posting further plays out the “end of monopoly” scenario.

For decades, the tower was the exclusive source of public radio’s most valuable network programs including NPR News, Marketplace, Garrison Keillor, and the Car Guys. And more recently This American Life and Wait Wait Don’t Tell Me.

Listeners donated money to preserve their stations because they would miss the programming if it were to go away. Businesses sponsored the programming because it was the only way to reach a highly desirable audience. CPB awarded community service grants to stations because they were providing public service programming on a scarce, protected public service broadcast channel.

All three of those revenue sources will be severely disrupted as stations’ monopoly on public radio content weakens. There is no way today’s public radio economy survives as it is today if, as Vivian Schiller suggests, radio broadcasting is dead in the next decade.

Listeners

It is folly to believe that, once radio towers are gone, all listeners will simply transfer their listening to a stream from their local public radio station. Based on current Arbitron AQH data, major market stations would have to support 30,000 to 50,000 simultaneous streams of programming all day long, every day for a single service. Station groups such as WNYC and Minnesota Public Radio might have to support more than 100,000. Stations in medium-sized markets would have to support up to 12,000 simultaneous streams.

That’s not going to happen. Station audiences will fragment once all listening is on the web, once the number of competitors goes from a few dozen, at most, to thousands. Some listeners will stream local stations. Some will listen exclusively to on-demand. Some will listen to out-of-market stations. Many will engage in a combination of the above.

In an all-Internet world, stations will no longer be full participants in the distribution of NPR programming. NPR’s mobile strategy is designed to corner the market for on-demand listening to NPR and minimize that listening through station sites. In fact, NPR has actively worked against stations offering NPR content on-demand.

This fragmentation will significantly reduce the number of listeners to local public media websites and listener loyalty to those outlets. It will decrease the number of core listeners to each outlet. Core listeners are the life blood of a station donor base. Fewer Core listeners on the web, combined with listeners’ ability to access the network programs in the absence of the local station, will result in fewer contributions. We touched on this in a RadioSutton posting some time ago.

Some people believe that providing local news will make-up for the loss of listening to national programs. It won’t. Local news has less drawing power, is more expensive to produce, and has proven to have less fundraising power that the network news. The combination of less audience, fewer pledges, and greater expense will not help the budgets of local public media outlets. The network programs, cheap to acquire on a cost-per-listener hour basis, provide the greatest revenue surplus to stations. Diminish those hours of listening and stations’ net revenues diminish. That will, in turn, diminish revenue to the networks.

Businesses

Radio’s ability to aggregate local audiences at any given moment will never be matched on-line. In many markets, the NPR News programs generate average audiences in the in the tens of thousands. The audience demographics are superb and businesses pay a premium to reach all of these listeners in a relatively uncluttered environment.

Annual contracts in medium to medium-large markets can exceed five figures. Six figure underwriting agreements are not unusual in large markets. Increasing the number of those contracts as the broadcast audience fragments and diminishes won’t happen. Unlike a public radio station, a local public media provider will have more competition for local ad dollars. And local public media outlet’ will be doubly hurt if they cannot put local underwriters adjacent to network content as they can today.

This brings us back to the on-demand piece. If listeners are getting their network on-demand content directly from NPR and not through local outlets, then local audiences will be smaller and much of the cache of local underwriting goes away.

The net effect is less revenue for the local outlet. Among DEI Benchmark stations, local underwriting makes up on average 39 percent of all revenues. Underwriting exceeds membership support at several stations. Major shifts in listening from the radio to the web will reduce business support at most local outlets and the trickle up effect means less revenue for the networks too.

CPB

CPB Community Service Grants exist because of the monopoly of the broadcast tower. Federal funding will come under attack as broadcast towers become less relevant. If federal funding doesn’t go away all together, CPB will be under enormous pressure to fund a wider-range of non-profit media websites that claim to fulfill the same mission currently served by public radio and public TV. Not only will station revenues go down, and network revenues with them, but public radio is also likely to get embroiled in new debates over objectivity and perceived bias in programming.

New Revenues

An argument can be made that the shift from broadcast to web-only service presents new revenue opportunities, especially from major donors and foundations. That might be true but neither of these sources should be considered long-term operations revenue. Financial sustainability doesn’t rest on a few large benefactors.

Back to the Original Point

The original RadioSutton post the death of radio stated that NPR had to be thinking about direct listener fundraising as part of its future revenue mix. We continue to believe this despite Vivian Schiller’s statement that these contributions are the domain of stations.

This year stations will pay some $68 million to NPR for programming services. Local public media outlets won’t have that kind of money to send NPR in 10 years if the radio towers are gone. It would be foolish to believe otherwise. And since NPR is unlikely to slash budgets as stations dollars shrink, there’s only one place to get the revenue -- listeners.

That day might not come soon, but it will come. NPR will accelerate the process if acts as though the towers will be gone in a decade. In that scenario, NPR cuts back or ceases to invest in radio programming , promotion, and fundraising services for stations. In that scenario, NPR continues to develop an on-line strategy that considers stations minor affiliates rather than full partners. In that scenario, NPR is unconcerned with a business model that advances the financial health of NPR and its member stations.

Or, NPR could take the posture that radio is still worthy of investment, that there is growth potential in radio. It could take the position that NPR and stations are better off if listeners can get all programming, streaming and on-demand, from every NPR-affiliated web site. It could take the position that the current public radio business model is a liability today and start working to improve it.

Imagine how much progress could be made on the difficult financial issues facing public radio if NPR put as much effort into that as it puts into developing its own on-line services.

A Leadership Crisis in Public Radio?

2010-06-07T10:14:00.003-04:00

NPR CEO and President Vivian Schiller thinks that broadcast towers will be gone in 10 years.

The CPB/SRG Grow the Audience project calls for increasing by 50% in public radio's average audience in the next 10 years, doubling the weekly Cume, and tripling the number of weekly listeners of color. Central to that plan is acquiring more broadcast signals.

Which way are we going folks?

Note to those following this thread: The posting on financial implications of radio being dead in 10 years will go up on Wednesday.

Will Radio Really Be Dead in 10 Years?

2010-06-06T20:31:00.000-04:00

The Internet will change radio. It already has and it will change it even more in the coming decade. NPR President and CEO Vivian Schiller thinks the change will be so rapid that traditional terrestrial radio will be dead by 2020.

The implications for public radio are staggering whether she is right or not. NPR is the 800 pound gorilla in public radio. Its corporate position and planning dramatically affect policy, funding, spending, and partnerships throughout public radio. NPR itself won’t cause traditional radio to go away but this new posture could accelerate the process and damage member stations and NPR along the way.

The next few RadioSutton postings will explore the implications of NPR’s new position and will test some of the assumptions being made by NPR and others on the future of public radio.

Today -- will radio really be dead in 10 years?

A large part of Schiller’s logic rests on the assumption that bringing the mobile Internet to cars will kill the need for broadcast towers. Built into that assumption:

• By 2010 every vehicle – or at least the vast majority -- will be equipped with the technology to receive mobile web services, even if it’s just a mini jack for a mobile phone
• A vast majority of vehicle users will be willing to pay fees to access the those services in every vehicle
• A vast majority of people will replace the 3 to 5 radios they have in their homes with wireless Internet audio devices
• Portable radio use – such as listening on a walk, at the beach, or at a ball game – will occur completely on mobile Internet devices or go away all together

Let’s do some numbers.

There are 254 million passenger vehicles registered in the U-S today. The median age of cars on the road today is 9.4 years. The trend is for people to hold on to cars longer these days but let’s assume the median age of cars doesn’t change in the next decade.

In 2020, half of all cars on the road will be from model year 2011 or older. Put another way, almost half of all cars expected to be on the road in 2020 are on the road today.

A small fraction of cars in 2011 will come with pre-installed mobile Internet devices. All of them will come equipped with radios. That trend will continue for several, if not many, years.

Implicit in Schiller’s vision is that cars will eventually come without radios at all. Why put a radio in a car if there are no towers? That argument assumes there will be a tipping point when listeners across almost all demographics and all radio formats, commercial and non-commercial, will abandon the free radio on the dashboard for mobile content that costs money in the form of data usage. The argument assumes the same behavior will simultaneously occur in the home over data networks and personal wireless networks.

Based on Arbitron data*, some 228,000,000 people age 12 and older use broadcast radio each week. Billions of time each week, they choose to turn on the radio. They spend more than 3.8 billion hours listening to broadcast radio each week.

How much of that behavior has to change and how much of that consumption has to go away to kill the entire radio broadcasting industry? Technology itself won’t be enough to drive the change. Certainly not in just 10 years. The listening experience has to be better too, worth paying for with at least data costs. That’s not going to happen in the next decade either. The overall marketplace will change some, but not that fast. Radio will still be around.

Public radio stations will still operate their transmitters in 10 years. The question now is whether it will be economically viable to broadcast NPR News over those signals. That is in Vivian Schiller’s hands today. More in the next posting.

* Source: Arbitron Radio Today 2009

Vivian Schiller: Public Radio Over in a Decade

2010-06-03T10:11:00.001-04:00

NPR President Vivian Schiller must know that the 34 million people who tune to NPR stations each week do so by listening to radio waves. She must know that the 27 million people who hear NPR programming each week are not really a single "national" audience but an aggregation of local station audiences. She must know that the $68 million in station revenue NPR receives annually is dependent on the quality of station broadcasts and fundraising. She must know all of these things.

And Vivian Schiller believes all of that will be gone in 10 years.

Yesterday at the D8, the Wall Street Journal's All Things Digital conference, Vivian Schiller stated that radio towers will be gone in the next decade and that listening will move on-line, with mobile playing a key role. She also said that stations' roles will be to do what NPR can't -- provide local, regional and state coverage.

It's an incredible statement given that Schiller also said NPR is not trying to do an end run on stations.

How can that be?

NPR's strategic thinking clearly does not include radio audiences or radio revenues in 10 years. It can't. Not if the towers are gone. So what replaces the $68 million NPR now gets in station revenues? It's not all business support.

That kind of money comes from listener contributions.

With member stations out of the way, NPR has to be thinking about direct listener fundraising. There's no other model.

The implications for strategic planning are incredible. Most stations believe they still have a few good decades left in them. Vivian Schiller is betting against that.

It will be interesting to see how the NPR Board balances the interests of NPR's member stations against a corporate vision that financially requires the near-extinction of those stations and the migration of their listeners to NPR platforms.

This American Life and Direct iPhone Fundraising

2010-06-01T14:12:00.000-04:00

This American Life is generating some buzz with by fundraising with its iPhone app. At issue, TAL is pushing fundraising appeals to iPhones when users are not even listening.

Read more at artstechnica.com.

As noted in a recent posting, NPR is outpromoting most stations on their own airwaves. Is this the beginning of networks and program producers outfundraising stations on the web as well?

Hope for the Newspaper Industry?

2010-05-24T07:15:00.000-04:00

The NPR-Station Business Model Must Live Up to Its Original Intent or Change

2010-05-20T17:50:00.000-04:00

In the discussion about new media, too little attention is paid to new revenue models. Even less attention (almost none, in fact) is paid to the expense side of the equation. That has to change if stations are going to come close to reaching just one or two of the goals laid out by the Grow the Audience project. It has to change for many stations to survive the turbulence of shifting media consumption patterns.

Outside of personnel costs, the fees for NPR newsmagazines are often the biggest chunk of a station's budget. As noted in our last posting, those costs are a bigger burden than ever.

NPR charges stations for Morning Edition, All Things Considered, and Weekend Edition based on how much listening those programs generate for each station. There are three key concepts behind that pricing model.

1. Every hour of listening to NPR News has a financial value to the station. More listening creates more revenue potential for the station from listeners and business underwriters.

2. NPR has an incentive to help stations increase listening and local revenue potential. More listening to NPR Newsmagazines means more money for NPR.

3. NPR has a disincentive to cause listening to go away from stations. Causing stations to lose audience means less money for NPR.

On the surface, this pricing model is ideal for the new media marketplace. Here's why:

NPR is now aggressively trying to get listeners to use its mobile apps. A mobile app is, in essence, a radio station. So NPR is asking listeners to bypass local stations.

We've covered the bypass issue before. Ultimately, bypass is about listener choice. Listeners will gravitate towards the best listening experience. If NPR is offering a better experience than stations, they will go.

If NPR sticks to the original intent of the current pricing model and audience for the newsmagazines at stations goes down, then NPR would collect less money from stations. That's the way it should work but history suggests it won't happen.

The pricing model was never properly implemented and the adjustments made by NPR over the years -- from capping station prices that were too high to changing the price points on listening -- have not been true to the intent of the model. NPR just toyed with the numbers until everyone was reasonably happy or at least willing to live with their program fees.

It is still not a given that more listening to NPR apps will result in less listening to stations. If it does cause station audiences to drop, then stations are going to have to pay NPR less money. Otherwise NPR will drive many stations out of business. Those that survive will have very few resources to invest in local programming and other goals laid out by the Grow the Audience project.

It will be interesting to see if NPR will actually live up to the intent of its current policy -- that it will trade cash from stations for listening through its apps -- or whether it will change the rules of the game when the current rules are no longer convenient.

The Financial Burden on Stations Grows

2010-05-17T19:43:00.000-04:00

Fifteen years ago, the cost of NPR Newsmagazines was capped at 10.2% of a station's total revenue. Today, under a different pricing model, the NPR Newsmagazines eat up as much as 19% of a station's total revenue.

That's gross revenue. A more instructive story is told when the price of the NPR Newsmagazines is compared to the station's net cash revenue -- the revenue left after the cost of fundraising is accounted for. That number varies by station but is typically around 25%. One out of every four dollars an NPR News station spends each year is on the NPR Newsmagazines.

This is an extraordinary investment for stations especially when they are trying to find money to produce more local programming and expand to new platforms. It also reminds us that the financial issues facing public radio are as much on the spending side as on the fundraising side.

In our next posting, the financial implications of listeners leaving stations to hear NPR direct through mobile apps.

NPR Out-Promotes Stations on Their Own Airwaves

2010-05-16T22:57:00.000-04:00

For years, NPR has used millions of dollars of member station airtime to promote the NPR.org website. Now NPR is using millions of dollars of member station air time to promote its own mobile apps.

If only there were a comprehensive network plan for helping stations carve out their own space on-line and in the mobile marketplace. If only there were some sort of revenue plan to compensate stations for the station airtime NPR is using to build its direct audience.

But there are no such plans. NPR -- and the other networks -- are driving listeners directly to their sites. That's good for network on-line advertising sales but not necessarily good for station sales or listener contributions.

It doesn't have to be this way. Stations can offer players and apps that are competitive with any of the individual networks. Stations can offer listeners a greater range of programming options by helping listeners access content from all of the networks carried by the station plus locally produced programming.

And stations have to be as aggressive, if not more aggressive, than the networks in promoting web-based services.

We're advising clients to promote their website or mobile app immediately after NPR embeds one of its promos in the news. The same holds true for web-services promos from any other network. Every time listeners hear a promo for a network app or website, they should hear about an even better app or website experience from the station.

To the listeners, this might sound as if the station and NPR are in competition with one another for the their attention. That would be unfortunate but, from the station perspective, it is unavoidable. On-air promotion is one of the best ways to create new mobile and web listeners. NPR understands that. So should stations. And stations should never concede those new listeners to NPR on their own airwaves.

Sound Quaility Less Valued Today

2010-05-12T09:28:00.000-04:00

Interesting read from Joseph Plambeck in the New York Times about declining interest in high quality audio.

Of note, the idea that few people today sit and listen to music they way they listened to HiFi in the 60s, 70s. and 80s. It's a good reminder that radio's portability is one of its greatest assets.

Public Radio and the iPad

2010-04-03T22:57:00.000-04:00

I stopped in my local Apple store to see the iPad today. It's a pretty slick device. In the hands, it feels like an iTouch on steroids. The larger display is a sight for sore, or at least older, eyes.

What stands out most, however, is that the iPad is designed for interaction. It's not all that special as an audio-only device. The speaker is louder than the iTouch, but the quality isn't as good as the speakers on most computers or as standard iPod headphones. Given the size of the iTouch, it's not something most users will want to be tethered to with a pair of headphones.

I'm sure public radio will develop some terrific apps to take advantage of the iPad's interactive features. It would also be a mistake to think that the iPad and similar technology is the key to public radio's future.

Public radio, particularly NPR, excels at delivering content via audio. Our industry might very well have the greatest concentration of worthwhile audio content in the world.

Our audio is our competitive advantage in the new media marketplace. Public radio is valuable not only for the content it delivers but also because it makes efficient use of listeners' time. A listener can learn or laugh and have good companionship all while doing something else like driving, cooking, cleaning, doing the bills, or gardening. Multi-tasking is not a new concept to radio listeners!

Public radio can't afford to lose sight of this competitive advantage as it seeks to serve listeners on new platforms such as the iPad. While there will be opportunities to serve listeners with print, images, video, and social media, public radio doesn't want to compromise what it does best -- audio. Give that up and we accomplish nothing more than making ourselves like everyone else.

Grow the Audience: Entrepreneurship is Key

2010-03-29T22:22:00.001-04:00

The Grow the Audience report Proposals for New Media Investment includes the following goal:

"Create a universal Public Radio Player, an embeddable slideshow and playlist-enabled web player for station and other websites, allowing access to all public radio streams, on-demand content, and localized choices from stations."

The report also says public radio should be spending up to two million dollars a year to develop such players. It shouldn't cost that much.

For public radio to succeed in the open marketplace, it has to stop spending like the subsidies will always be here. The industry overspends on projects because of these subsidies. Continuing that practice will only hinder, not help, public radio when the subsidies dry up. Building budgets and spending money based on the old business model doesn't make sense in the new marketplace.

Read what the universal public radio player is supposed to do. 90% of it is already available in the Listener-Interactive web player, which was created by a few entrepreneurs for far, far less than the numbers in the Grow the Audience report.

You can see a demo of the Listener-Interactive web player here. There is a companion iPhone app with the same functionality. This user interface will transfer to dashboards when cars start coming with mobile broadband functionality.

JSA has been working with Listener-Interactive to develop this listener-focused tool so there will be revenue opportunities for stations. There are also collaborative revenue possibilities that could benefit program producers and networks as well.

More on that in a future posting.

The Power of Sound

2010-03-03T08:05:00.000-05:00

Martin Lindstrom writes in Fast Company about the 10 most addictive sounds in our lives.

The power of sound... something we shouldn't lose sight of as public "radio" morphs into public "media."

Kevin Smith, Southwest, and Twitter

2010-02-15T20:00:00.003-05:00

The first thought I had when I heard that movie director Kevin Smith sent angry Tweets over being kicked off a Southwest Airlines flight this week for being too fat was,

"Did he see our picture in the February edition of Southwest's Spirit Magazine? "

Then I started to think about what great publicity Kevin Smith is getting for his new movie "Cop Out." Sure, bloggers and tweeters and even established news organizations, including NPR, are writing about Smith's tweets and Southwest's response and what it all means.

Many of those articles include a reference to the new movie. You can't buy that kind of publicity. I'd be surprised if Smith accepted an apology from Southwest for at least another week. The movie opens on February 26th. The longer this stays in the news, the better it is for Smith. Smart man.

The Kevin Smith/Southwest incident isn't the only big Twitter incident this week. Musician John Mayer tweeted his apologies for some inappropriate comments in a recent Playboy interview. It seems that controversy and Twitter equal massive publicity.

It's just another example of how social media tools fragment along the same lines at radio, print, and television. The tool will be altered to match the existing uses of media -- good and bad -- no matter how idealistic the new technology seems when it first arrives. Remember when the Internet wasn't going to be commercialized?

This, of course, is good news for our industry. Public radio thrives because of how it contrasts with commercial radio. The more commercial values seep into social media, the more opportunity public media has to stand out and provide value.

Listen to Kevin Smith play Not My Job on NPR's Wait Wait Don't Tell Me

New PPM and Fund Drive Study in the Works

2010-02-08T21:00:00.000-05:00

DEI, NPR, and John Sutton & Associates (JSA) are conducting a study in PPM markets of audience response to fund drives.

This is the first comprehensive study on listening patterns before, during, and after fund drives. JSA conducted the first PPM and Fund Drive analysis along with Paragon Media Strategies in December 1997. That study was limited to just a few stations and analyzed top-line audience response only.

The new study also aims to establish on-air fundraising benchmarks for PPM stations. These benchmarks will help stations you evaluate the efficiency and effectiveness of their fund drives.

Stations subscribing to PPM data in Fall 2009 are being asked to participate. We plan to release our reports in two parts later this Spring.

Part One will study listening patterns and overall fund drive results. The objective is to quantify audience loss (if any) around fund drives, determine how quickly listening levels recover, find out if certain demographics or dayparts are affected more than others, and if there is a relationship between overall fund drive results and audience gain or loss during fund drives.

Part Two analyzes contributions and dollars received by dayparts and hours during the fund drive. The results are analyzed against the actual listening in those dayparts and hours. This information will be used to calculate each station's efficiency at turning listening into contributions. National benchmarks will be established and stations will be able to analyze their results against the national benchmarks. This is very practical research that will help stations develop better strategies and tactics for getting more listeners to give more quickly.

DEI is contacting potential participants about the study. Please forward any questions to John Sutton, john@radiosutton.com or Jay Clayton, jayclayton@comcast.net.

JSA Featured in Southwest Airline's Spirit Magazine

2010-02-05T14:38:00.002-05:00

We travel a lot. And when we travel we almost always fly Southwest Airlines.

Southwest took notice and wrote a feature on us for the February 2010 issue of their in-flight magazine, Spirit. You can see it here (pdf).

Working with Southwest got us to thinking about what we like about the travel we do beyond working with our clients. We've listed a few of our favorite things here in case you're ever visiting one of our many client cities.

Grow the Audience: Accountability Begins at CPB

2010-02-05T09:49:00.001-05:00

Accountability is perhaps this biggest challenge for the Grow the Audience project. We wrote about this last year. The project will not meet its goals without strong, mutual accountability among stations, the networks, program providers, and CPB, which will provide significant funding for Grow the Audience initiatives.

The nature of the industry requires that much of that accountability will be voluntary. CPB can, and does, require some accountability from grantees, but those requirements – such as the Audience Service Criteria – are minimal.

It is extremely important that CPB takes a leadership role in accountability. That not only means supporting mechanisms of accountability, it also means that CPB should lead by example. How? By publishing its own goals, regularly reporting on its results, and when necessary, outlining steps it might take to improve its results.

This isn’t as simple as it sounds. CPB is not held accountable by its board or Congress for the audience performance of its programming investments. It never has been and it probably never will be.

Read the annual reports from CPB from the past several years and you will note that CPB reports on how it spent tax payer dollars on radio, but not on the results of that spending. For several years, CPB listed absolutely no audience numbers for radio in its annual reports. That improved a bit in the 2008, but not enough.

For example, there is no report on CPB’s site or in its annual reports showing the number of minority listeners to public radio over the years even though that has been a CPB funding priority. It’s no wonder the minority audience hasn’t grown. No one is actually held responsible for it.

There is one ironic twist to CPB's reporting of audience numbers. The 2008 annual report does tout audience growth for one CPB-funded program -- Weekend America. That program was cancelled by its producer, APM, at the end of 2008 due to budget cuts and "weak prospects for carriage... foundation... and corporate support."

CPB is evaluated based on whether it spends its funding the way it says it will. It is highly unlikely that its board will adopt new evaluation criteria unless dictated by Congress. To create the type of mutual accountability necessary to make Grow the Audience a success, CPB must embrace results-based evaluation criteria and it must make those criteria public. Here’s one possibility.

CPB could help establish an industry website that aggregates information on system-wide diversification efforts. One section could be on audience and another section could house information on diversification of staff.

On the audience side, CPB would publish the goals of its diversity initiatives, the programs or stations it is funding to reach those goals, and regular reports on the audience performance of those programs. All stations and programs receiving CPB funding would be required to participate. Producers and stations not receiving CPB funding could post their activities and results as well.

The key here is CPB’s full participation. Without it, it’s simply business as usual in public radio. This is CPB’s Grow the Audience project. CPB is championing these goals. If CPB doesn’t take the lead on full, mutual accountability, who will?

Grow the Audience: By the Numbers

2010-01-31T21:36:00.000-05:00

The Grow the Audience project set three broad audience growth goals for public radio. Over the next decade, the project aspires to:

1. Increase the average audience – the number of people using public radio at any given moment – to half again as large as it is today.

2. Double the number of people who use public radio every week – on-air, online, and on other platforms.

3. Triple the amount of listening by people of color.

The numbers are intentionally vague at this time because of Arbitron's transition from diaries to PPM measurement, and that's appropriate. Still, the concepts adopted by the project leaders point to very specific actions required to meet the goals.

The first goal, increasing the average audience, validates public radio's multi-decade strategy of increasing audience loyalty through strengthening programming. Average audience grows when the current audience chooses to listen to public radio more times per week.

To meet this goal, stations are going to have to jettison underperforming programs. The challenge facing the SRG and CPB is developing a compelling case for change at stations that have chosen to ignore best programming practices for the last decade or more. Additionally, the networks have to improve or discard programs that are average or below average performers. There is no room for "good enough" on the network level.

The second goal, doubling the weekly audience across all platforms, will prove tricky to measure. Currently, there is no measurement of unduplicated broadcast, streaming, and time-shifted audience. The weekly broadcast broadcast audience will increase significantly if the "average audience" goal is achieved, but it will not double.

The on-line audience, streaming or time-shifted (on-demand or podcasting), will most certainly double in the next decade. That won't be difficult to achieve. Determining how many of these on-line listeners are new to public radio will prove difficult. It might require proprietary, and expensive, research to measure this.

The third goal is tripling the amount of listening by people of color. For the first time on a national level, a diversity goal is properly stated. The non-white audience must grow faster than the white audience for public radio to diversify. Anything less is status quo.

As we've written before on this blog, that will be extremely expensive. The cost to create an hour of listening from a new target audience is always more expensive than the cost of creating an hour of listening from the current audience.

Tripling the number of minority listeners to public radio stations will cost hundreds of millions of dollars over the ten years envisioned by SRG and CPB. The costs could be lower if most of that new listening is on-line or through media partners with existing minority audiences. Still, the cost of growing the minority audience faster than the white audience will be great.

CPB's past investments in minority audience growth have been too little to make a measurable difference in minority audience growth. Projects such as Talent Quest are a move in the right direction, but fall far short of the amount of content needed to meet the growth goals.

On the whole, the Grow the Audience goals are spot on. There aren't enough resources to meet them all so priority-setting becomes critical. And the Grow the Audience report was a bit vague on the lines of accountability for meeting these goals. That will be the topic of our next post.

Grow the Audience: Inclusiveness

2010-01-27T22:48:00.000-05:00

Inclusiveness is so important to the Grow the Audience project that it is the number one item in the report. The report prominently includes this passage:

“We challenge public radio to commit to a greater inclusiveness of people of color in every dimension – the governance of stations and national organizations, the hiring of management and programming staff, and the voices, views, stories, and music of day-to-day programming.”

It is a worthy goal and with that in mind, I offer the following:

Public radio’s national leadership – at CPB and the major networks -- is less diverse than ever despite nearly two decades of talking about the importance of diversity.

In fact, all of the key decision-making power in the Grow the Audience project, including the ultimate control of the tax dollars that will be spent on this initiative, is in the hands of White Baby Boomers.

It is incumbent upon on CPB and the project leaders at SRG to meet their own challenge if public radio is to break its pattern of talking about diversity but failing to affect real change.

Grow the Audience: Priorities

2010-01-13T19:08:00.000-05:00

There’s pretty much something for everybody in the Grow the Audience report from the Station Resource Group (SRG) and CPB. According to the report, public radio must:

• Strengthen its current national news programs
• Increase the amount of local news programming and reporting
• Build new and improved classical, jazz and AAA music services locally and nationally
• Build new services to attract Black and Hispanic listeners to public radio
• Do all of the above on the radio and on-line

“Do everything” is not a strategy. And this is partially acknowledged deep inside the Grow the Audience report. Section Six, Develop Market by Market Strategies for Audience Growth, rules out investing resources in growing the audience at stations in markets 51 or smaller.

Even if smaller markets are not included in project, the reality is that there aren’t enough resources to serve the objectives listed above. It would be a waste to spread limited funds across such a large swath of activities. Further prioritization is necessary to make smart, effective investments in audience growth.

The Grow the Audience report is silent on that prioritization process. We believe the difficult decisions about who gets help and who gets left behind should be fully transparent. Hopefully, CPB and the SRG will address this in future reports.

2010: A Defining Year for Public Radio

2010-01-12T13:44:00.000-05:00

What happens in 2010 will have a significant impact on what public radio looks like in 2019.

This year, more than any other, will define the future relationships among stations, program producers, networks, and the audience. This is the year where the actions of the networks, particularly NPR, will determine whether the majority of stations will thrive or languish in the new media marketplace. This is the year when CPB, through the Grow the Audience project, will set funding priorities that determine which markets and public radio entities will be targeted for growth and which ones will not.

If the events of 2009 were any indication of what’s to come in 2010, then public radio can expect a further fracturing of the industry between the current “haves” and “have-nots.” Here are two examples:

NPR’s current revenue strategy for the mobile web excludes stations. In fact, NPR is considering charging stations for the right to offer newsmagazine content on-demand. Put another way, NPR is eyeing station fees as a possible source of revenue for its own mobile strategy. You can read more about it in Current.

CPB’s Grow the Audience project, which on the surface looks like the “No Public Radio Child Left Behind” program, will out of necessity have to fund relatively few, high impact projects. There’s not enough money to create incentives to get everything done.

We’ll explore these and other industry-defining challenges in upcoming posts. In the meantime, stations not wishing to be left behind need to start thinking aggressively if they want to stay competitive on-line and in the public radio industry.

It's Not About Us

2009-11-14T23:25:00.002-05:00

This weekend I'm selecting stories for the Best of Public Radio 2009 and one thing is very clear. Public radio is at its best when it tells other people's stories. It's not nearly as good when we turn the spotlight on ourselves.

Reinventing Pledge Drives

2009-11-12T18:56:00.000-05:00

It's looks like a very successful fall fundraising season in public radio. Most of the stations we worked with matched or exceeded last Fall's results. A few stations had record-breaking drives for dollar raised and number of givers. Direct mail and other off-air fundraising appears to be strong as well.

A few more stations conducted one-day pledge drives including WRKF in Baton Rouge and WFDD in Greensboro/Winston-Salem.

Several stations -- WSHU in Fairfield CT, and KBSX in Boise, WBHM in Birmingham -- are trying to reinvent their fundraising by conducting nothing but 1-Day drives. They are following the lead of KBBI in Homer, Alaska and more recently, KUNC in Greeley. WSHU even published its plan to do nothing but 1-Day drives. You can see that here.

One big question we had about 1-Day drives is what happens when the station doesn't meet the goal? We now know the answer as a few stations have missed their goals.

First, the station typically makes at least two-thirds of the goal. For example, a station that usually raises $150,000 in seven days raises $100,000 in one day.

Not surprisingly, there is a let-down among station staff members. That's followed by a recognition that the station just raised $100,000 in one day, blowing away any previous level of fundraising performance without having to use any premiums, sweepstakes, or challenge grants.

A series of on-air spots and eblasts over the next week further reduces the balance of the remaining goal. Then the station comes on the air to mop up. Most stations hit goal with another day of fundraising. Instead of interrupting programming for seven days, the goal is met with just two days of preemptive pitching.

Audience response to this is quite good. Listeners appreciate the transparency of the process. In time we will learn if they appreciate it enough to make future 1-Day drives successful enough to abandon longer drives for good.

No matter what happens, it's great to see so many stations trying to address that old listener question, "Can't you do something about those long, annoying pledge drives?" These stations are trying and the lessons learned will benefit all of public radio.

Best of Public Radio 2009 in the Works

2009-11-04T00:01:00.003-05:00

John Sutton & Associates and Jay Clayton Associates, in collaboration with NPR, APM, PRI, DEI, and Public Interactive, are once again creating an end-of-year fundraising campaign for public radio stations. Last year's integrated campaign was very successful with the majority of stations earning more revenue than over the same period the previous year.

The campaign will include direct mail, on-air spots, eblasts, and of course, the three-hour turnkey fundraising special. New this year, a national toll-free number and the option for stations to do more of the pitching.

More details are here.

Questions? Please contact me at john@radiosutton.com

Fundraising Mystery

2009-10-15T09:59:00.004-04:00

It's public radio pledge drive season and it appears to be going quite well for most stations across the country.

We know a lot about why listeners contribute to public radio, why the give when they do, and why the give certain gift amounts.

One of the great mysteries that remains, however, is why some stations get lots of contributions while offering few or no premiums while others can't meet their goals without selling a laundry list of mugs, t-shirts, gift certificates, and other stuff.

Is it that well-educated, societally-conscious listeners in some cities need more inducement than similar listeners in other cities? Is so, why would that be? Do they value the station less than their peers in other cities? Or is the difference on the station side of the microphone?

Web Giving, Interrupted

2009-10-08T18:53:00.000-04:00

Here's a tip for public radio stations getting ready to do their fall fund drives.

When sending eblasts, it is important to put the phone number in body copy using a format that let's the user dial the number by clicking on it.

Why?

Because more people are reading emails on their smartphones, but not pledging through those devices. The opportunity to get people to act is as they are reading the email. You just can't count on them remembering to reopen the email at a later time.

Until giving via a mobile device is as easy and common as over a computer, you'll want to extend the recipient's giving options by making it easy to call in a contribution when the email is first opened.

Update: Best of Public Radio and Fall Drives

2009-10-05T21:39:00.000-04:00

The Fall fundraising season is underway and early results are promising. Stations we talk to are making higher goals on time or with a little extra fundraising. Direct mail revenue is up in several markets. Good luck to everyone who has yet to go.

The Best of Public Radio: The Lighter Side did well this summer. About two-dozen stations have used it so far. Others are using it as part of their Fall on-air drives.

As with the 2008 End-of-Year on-air special, some stations did better than others. We're looking at the results and lessons learned and refining our plans for the end of the year special.

The 2009 EOY special will again feature 3 hours of turnkey fundraising programming. The broadcast window will be larger and stations will have more flexibility in where the special can be scheduled. There will be an option for more local pitch time for stations wishing to put more elbow grease into their broadcasts. The 2008 special focused on web giving only. The 2009 special will accomodate web and telephone giving.

As with last year, the EOY on-air fundraising special is part of a package that includes direct mail, eblasts, and on-air spots. Look for a full announcement with more details in the next week. Materials will be available beginning October 23.

Everybody But NPR...

2009-07-30T21:54:00.000-04:00

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.

Grow the Audience:Defining Inclusiveness

2009-07-17T07:58:00.000-04:00

In 1997, NPR published a major report, funded by CPB, on reaching more Black listeners with public radio. Twelve years later the industry is still trying to figure out how to do that.

One of the top goals of the CPB-funded Grow the Audience project is Inclusiveness. In public radio, that means achieving greater ethnic diversity.

It's been pointed out that targeting an audience by physical characteristics is an odd thing to do given that public radio is an industry focused on the mind. Yet that's pretty much a requirement that goes with receiving federal dollars. The problem, of course, is that physical characteristics say nothing about what people will find interesting to listen to on the radio.

The Grow the Audience project tries to address this by adding the demographic filter of college education to the ethnic demographics since education is a strong predictor of whether someone listens to public radio. That filter, however strong it is, is not a useful as it might appear.

Three decades ago, when researchers first learned that level of education was a power indicator of public radio listening, far fewer Blacks and Hispanics had college degrees. The educated "market" was predominately White and full of baby boomers coming of age.

The college educated population is very different today. It is not only more ethnically diverse, it is also more culturally diverse. This is quite evident when analyzing the educated population, particularly in large markets, using research tools like Scarborough or MRI.

College educated Black, Hispanic, and White consumers make very different media choices. They hold a different mix of jobs. Their political-affiliation profiles are different.

It is a mistake to assume that ethnicity, even filtered with level of education, is a sufficient starting point for reaching the goal of Inclusiveness. Those two demographic characteristics are not precise enough research tools in an increasingly complex media marketplace.

The listener's mind matters more.

If public radio is to become more inclusive it is going to have to address the issue of cultural diversity in its programming and management, locally and nationally. Inclusiveness must be defined by personal, social, and political interests and values.

Do that right and the ethnic audience numbers will fall into place. Stay the current course and twelve years from now Grow the Audience will look like just another failed academic exercise.

The Best of Public Radio: The Lighter Side

2009-07-04T22:45:00.004-04:00

A funny fundraising show hosted by two news guys?

You bet.

The second installment in the Best of Public Radio fundraising series will be available this month and its hosted by All Things Considered host Robert Siegel and NPR Justice correspondent Ari Shapiro.

The Best of Public Radio is a turn-key on-air fundraising special for public radio stations. It requires very little effort on their part to broadcast the show and raise money from listeners.
The program features the humorous side of public radio including segments from Car Talk, A Prairie Home Companion, Wait Wait Don't Tell Me, This American Life, and Whad Ya Know.

Unlike last December's inaugural program, this Best of Public Radio show goes beyond web pledging and includes a toll-free number to provide listeners with more ways to give. Station results are expected to increase up to 300% for the same investment they made in December.

Stations can use The Best of Public Radio as a stand-alone special, as part of their fall fund drives, or both. This project is part of a collaboration among NPR, PRI, APM, DEI, Public Interactive, John Sutton & Associates, and Jay Clayton.

More details are coming in the next few days. If you have questions, please write john@radiosutton.com or find John Sutton, Jay Clayton, or Sonja Lee at the Public Radio Development and Marketing Conference in San Diego.

And We're Back...

2009-06-24T07:56:00.005-04:00

It's been a few months since the last post mostly because it's been an extremely busy fundraising season. Posts will start coming more frequently beginning next week. Among the topics you will see:

1. AudiGraphics analysis for PPM is now available. It's turning out to be a very powerful way to evaluate Arbitron's PPM data for programming. You will see specific examples of this.

2. Why not letting NPR raise money directly from listeners is ultimately bad for public radio.

3. Ideas on creating strong lines of accountability as CPB begins to invest in growing public radio's audience. Recent history shows us that a lot of money will be wasted without that accountability.

4. What DEI Benchmarks tell us about public radio's fundraising future.

5. The Best of Public Radio summer fundraising special.

We'll be at The Public Radio Development Marketing Development Conference in San Diego in a few weeks. Hope to see you there.

ARA's Top Ten Truths About Public Radio

2009-04-16T11:16:00.000-04:00

Several years ago, the folks at Audience Research Analysis handed out wallet-sized cards with 10 truths about public radio and its listeners. It's a good list to have and to share.

1. Programming causes audience

2. Listeners choose programming that resonates with their values, interests, and beliefs.

3. Listeners develop loyalty to a station with consistent appeal.

4. Appeal can transcend program genres and format types.

5. The programming most often chosen by public broadcasters appeals most strongly to well-educated Americans.

6. Public radio listeners generally perceive themselves to be citizens of the world.

7. Public service begets public support.

8. Fundraising is the catalyst that triggers giving, but personal importance and reliance are their primary causes.

9. Listeners trust public radio to be their sanctuary from commercialism.

10. Public support begets public service.

Timeless Advice from the Future

2009-04-11T11:46:00.001-04:00

"Logic clearly dictates that the needs of the many would outweigh the needs of the few" - Captain Spock

"Or the one." - Admiral Kirk

Who would of thought that an old Star Trek script could provide NPR and its member stations with guidance on navigating the complexities of the current economy and the new media marketplace?

Trust

2009-04-01T17:58:00.002-04:00

Trust is the foundation of public radio’s success.

Producers trust the listener’s ability and willingness to hear complex and challenging material. Listeners trust what they hear.

Public radio stations trust that listeners will financially support them. Listeners trust their donations are spent responsibly.

But stations don’t trust NPR.

That’s the bottom line in the discussion on whether NPR should raise money directly from listeners.

There are many reasons stations don’t trust NPR, some of them real and most of them imagined. That’s a conversation for some other place and time.

That lack of trust is a bigger threat to public radio than iPods, mobile Internet streaming, and satellite radio. It hinders public radio’s ability to respond to new opportunities and grow.

Repairing those damaged bonds of trust can do nothing but help the industry. That mending won’t take place, however, as long as stations assume NPR is 100% responsible for fixing the problem.

I’ve heard from numerous station managers over the past several days who are waiting for NPR to fix what they perceive to be a broken relationship. And yet because they don’t trust NPR, overtures to rebuild relationships are scorned. It’s a no-win situation.

Trust is a two way street. To rebuild it, station managers, those on the NPR board and those who are not, are going to have to display as much leadership as NPR. As with the trusting relationships we have with listeners, it will take time and there will be set backs. As with our relationships with listeners, the benefits of that trust will be mutual.

The NPR Pledge Drive Fuss

2009-03-30T22:36:00.001-04:00

Nothing stirs the public radio pot like a conversation about NPR raising money directly from listeners. So when the Washington Post printed an article saying that NPR was considering a pledge drive to battle budget shortfalls, reactions were swift and strong.

Current.org has a good summary of the article and some related links here. NPR CEO Vivian Schiller sent an email to stations stating NPR was not pursuing the pledge drive option. Aaron Read, who frequently posts to this blog, commented on the topic on his Fried Bagels blog.

As someone who has worked at stations, for stations as a researcher and fundraising consultant, and at NPR as a researcher and provider of fundraising service to stations, all I can say is this:

The industry is losing money each year by not allowing NPR to raise money directly from listeners.

Whether the issue is fundraising or audience growth, public radio chronically suffers from the belief that its pie can't get any bigger. People believed that 20 years ago. They believed it 10 years ago.

But static-pie thinking views the future through an Either/Or lens. It can't see the Both/And possibilites.

We know from past research that listeners to two stations will support both stations and give average or above average gifts. They have room in their budgets to do both . Even now. Even in this economy. In fact, the best way to raise more money in a down economy is to ask more often and in more ways. Many listeners would gladly support their station and NPR if given the opportunity.

The issue here shouldn't be whether or not NPR should be allowed to raise money directly from listeners. The issue should be how NPR and stations can work together to grow the revenue pie with stations and NPR making appeals.

Making this work starts with understanding that raising money from listeners and how stations pay for programming are related but separate issues. NPR raising money directly from listeners without sharing revenues and/or reducing station fees wouldn't be fair. A central piece of any direct fundraising effort has to focus on how the money is distributed and how NPR charges stations for programming.

Everyone could have more money to spend, if only public radio can get past its belief that the pie can't get any bigger.

It's Not Just for FM Anymore

2009-03-20T21:35:00.003-04:00

The survey of listeners and donors to the Best of Public Radio 2008 special showed that the more ways listeners accessed public radio content -- multiple stations, the web, podcasts -- the more likely they were to donate to their favorite station.*

This is an important lesson. Using more public radio content, even if not on their favorite station, has a positive impact on giving to that station.

This shouldn't be a surprise. Past studies have shown that the more listeners use public radio, even when using more than one station, the more likely they are to donate.

Listeners' conception of what public radio is today has changed. It's much broader than the industry's conception of itself.

Public radio is radio plus podcasts plus streaming plus printed information on the web. It is a local station plus NPR.org plus the This American Life site plus whatever.

Live in Baltimore and want to hear All Thing Considered at 8pm? Stream KPBS. You still wake up and drive to work listening to Morning Edition on WYPR and catch Diane Rehm during the day. If you miss Wait Wait Don't Tell Me at 11a on Saturday, you can still hear it over the weekend at your convenience on your computer or iPod. And you still donate to WYPR.

A public radio station's path to better audience service and greater financial security doesn't begin with hoping listeners won't use public radio on the web or through a podcast. It begins with great programming and an understanding of how listeners now conceive public radio.

It's not just for FM anymore.

* You can see some of the survey results beginning on page 24 of the BOPR 2008 project report.

Cliches R Us

2009-03-20T09:56:00.004-04:00

"During these tough economic times, more than ever, you are the public in public radio, which is why your gift matters because, at the end of the day in a tough economy, more than ever, you need public radio and we need you and remember every dollar makes a difference... during these tough economic times."

Really folks, we can do better than this...

Not All Public Radio Stations Control Their Destinies

2009-03-06T12:32:00.001-05:00

It’s time for many public radio managers to address this critical question.

Is my public radio station worth saving if most or all of the subsidies went away?

The reality is that as many as half of all public radio stations probably couldn’t survive the loss of all state, university, and federal support. In essence, these stations do not have control of their destinies. Many of them could be wiped out with the single stroke of a pen, as happened to WMUB in Ohio. But it doesn’t have to be that way.

Since its inception, DEI’s Benchmarks for Public Radio has tracked a metric called the Community Financial Support Index (CFSI).
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CFSI measures a station’s ability to cover its operating budget, minus direct fundraising costs, with net fundraising revenue. An index of 100 means a station could fund is current operating budget on net revenue from individual giving, underwriting, event revenue, etc.

Every year, DEI Benchmarks show the median station CFSI is around 65. That is, the typical station could cover just about two-thirds of its operating budget, not including fundraising costs, with community financial support. Put another way, the typical station would have to cut up to a third of its budget to survive the loss of subsides.

Most stations probably could not survive cuts that deep if they happened all at once. But many of these stations could survive if their dependence on subsidies were gradually reduced.

History shows that more listeners will step up and give more money when subsidies go away. Stations such as KUNC in Greeley and WYPR in Baltimore (formerly WJHU) effectively turned independence from university control into significantly greater levels of listener support.

Once heavily dependent on university subsidies, these stations were forced to take control of their own destinies. They accomplished that through improvements in fundraising results an, sd spending practices. Losing their remaining subsidies today would be very difficult, but like other high-performing stations, they are positioned to adjust and survive.

KUNC and WYPR, along with WRNI in Providence, are rich with lessons on how public radio stations can become more important to and sustained by the communities they serve.

Unfortunately, the public radio industry treats these success stories as anomalies to be avoided. Greater independence from tax dollars and greater long-range security for the station’s core service are shunned in favor of maintaining the status quo.

If public radio has learned anything over the past 6 to 10 months it’s that economic change is here and the status quo won’t cut it anymore.

Is your public radio station worth saving if most or all of the subsidies went away? Assuming the answer is “yes,” then it is time to take control of your destiny and start planning on greater self-sufficiency.

Jay Clayton contributed to this article.

How Radio Wrecks the Right

2009-02-26T10:41:00.003-05:00

A thoughtful John Derbyshire article from The American Conservative.

More Federal Dollars = Less Listener Support?

2009-02-13T08:14:00.000-05:00

Every action has side effects.

A potentially big side effect of asking for the asking the federal government for bigger subsidies for public radio is a drop in listener support.

It is well established that a listener’s funding beliefs are an important piece of his decision to give. The more a listener believes listeners fund public radio and that government support is minimal, the more likely he is to give.

There’s research to back this up, but anyone who was raising money for public radio during the Gingrich era knows it is true. Serious threats to federal funding bring out the best in listeners.

On the flip side, news of the big Kroc endowment to NPR caused many listeners and donors to question the importance of their support. Some stations felt the Kroc gift stunted giving at first.

Asking for more federal money risks listener support. It might be necessary to make that ask for stations in dire need, but the side effect could be a drop in donors across the country.

There’s no way to gauge the impact in advance. At a minimum, it will make it more difficult to convince listeners who have never given before to contribute. Every 5 percent loss would translate into an industry-wide loss of between $12 and $14 million. The impact would continue in out years because of a smaller donor pool. .

It’s also important to point out that healthy stations, the ones that don’t need extra federal support, could lose donors and dollars on news that the industry is asking for more money, even if those stations don’t receive new tax dollars.

All of this must be considered in the calculus of approaching the government for extra subsidies. What looks like free money could have significant hidden costs.

Self-Sufficiency: Part 2

2009-02-10T12:55:00.000-05:00

There are more rumblings that public broadcasting will ask the Obama administration and Congress for federal money to make up for projected shortfalls this year in state subsidies, foundation gifts, underwriting, and membership.

According to Current.org, CPB management recently told its board that up to a fifth of all public stations – radio and TV -- were financially fragile. Management told the CPB board that the financial impact of the economic downturn could be a single year loss of $418 million in FY 09, with $126 million of that coming on the public radio side.

From what we’ve heard, CPB’s numbers are really rough. They are based on conversations with stations not formal research, so its hard to know how accurate they might be. That said, I would believe that a lot of PTV stations are in financial trouble. Who hasn’t seen that coming for years?

This blog is about public radio though, so we will focus on that from here on out.

Four years ago CPB published a report, “Having It All”, on the financial state of public radio stations. That report said 45% of all radio licensees were running at an operating loss. It wasn't a 1 year trend either. Public radio stations were generating less net operating revenue in 2003 than they did in 1999 even though gross operating revenue was up $180,000,000.

One of the key findings in the "Having It All" report was that station spending, not fundraising alone, was contributing to the problem. There were many excellent recommendations in the report, none of which have been acted on.

Asking the government to help financially strapped stations this year might be the only way to keep those stations from going dark or losing their local identity, as is happening to WMUB in Ohio. But becoming more reliant on subsidies is not a long-term solution.

In order to survive in a new media marketplace and a changed economy, public radio stations need to become less reliant on subsidies. They must become more self-sufficient.

Right now, CPB has a chance for a make good after dropping the ball on the “Having It All” recommendations. It can develop incentive programs that encourage stations to operate in such a way the their core services, national and local, will not be threatened by a sudden loss of subsidies. Any new federal money a station receives should come with that requirement. Anything less is a disservice to the station, its listeners, the community of license, and the taxpayers who are footing the bill.

COMING UP THIS WEEK: Why asking for more money from the feds could be bad for healthy stations and membership fundraising programs around the country. And, tapping unrealized membership growth potential in public radio.

February Fundraising: So Far, So Good

2009-02-05T07:32:00.001-05:00

We have a few client stations holding on-air fund drives right now and most are at or over goal. One station started yesterday and missed its daily goal by just a few percentage points. So far, it looks like a typical pattern of daily results.

We haven't had a chance to dig into the numbers but donor response seems strong and we are still seeing some $1,000 and up gifts. That's a similar giving pattern as last fall and the end result was stations meeting or exceeding their goals with more donors and a smaller average gift.

More donors giving smaller gifts is a good thing at any time. It's a positive sign about the value of the service.

Our advice for now -- don't lower your expectations. If you expect less, you will get it. Instead, give your listeners a chance to help you succeed.

Don't Create Your Own Economic Crisis

2009-02-03T23:07:00.000-05:00

There is lot of discussion in public radio about how "these uncertain times" and the bad economy might affect fundraising. Some stations are already lowering their goals without giving listeners a chance to help them succeed.

We're advising clients to stick with their goals and find creative ways to meet them. That's because there isn't a station out there that can't improve its fundraising in some way.

Thanks to meticulous planning and great execution, the Winter fund drive at all-classical KBAQ in Phoenix is off to a strong start, running slightly ahead of goal after two abbreviated days of fundraising. KBAQ uses no premiums. Their drive continues through Saturday, wrapping up with the Met Opera. Yes, the KBAQ fund drive is over when the fat lady sings. Well, almost over. They usually get in one more appeal right after that.

KUNC in Greeley, CO repeated its success with a 1-Day drive. Their first one in the Fall went way over goal. This Winter 1-Day drive finsihed more than 110 contributions over goal and exceeded last Winter's 3-Day drive results by more than 300 contributions. You can read more about it here.

The down economy might just be the best time to try something like a 1-Day drive or an All the Money, Half the Time drive. It seems counter intuitive. Harder times typically require more effort. But dramatically shorter fund drives capture the listeners' imaginations. Shorter drives transcend the everyday.

Instead of assuming a tough economy means less money, why not seize the moment to create an economic victory for your station?

A free 1-Day drive kit is available here.

Renewing the Call for Self-Sufficiency

2009-01-26T22:24:00.001-05:00

It was Day One of a public policy class at the University of Maryland. The professor offered this challenge to the students.

"You have just started as the head of a government agency fighting the drug problem in America. What is the first thing you do?"

The class was evenly split with half wanting tougher laws and more jails. The other half wanted to invest in urban renewal and education programs.

"You're all wrong," said the professor. "Your number one priority is to get funded again next year. Otherwise you are out of a job."

I was reminded of this after hearing that WMUB, the NPR News station in Oxford, Ohio, will no longer be operated locally. The station’s licensee, Miami University is pulling $500,000 in annual cash support due to major budget shortfalls of its own. All staff members are losing their jobs. The station will be operated by Cincinnati Public Radio.

Not surprisingly, some in public radio reacted by suggesting that the industry needs even more subsidies from the federal government.

That’s the wrong approach. Public radio needs to become more self-sufficient. Its service to nearly 30 million Americans each week is too valuable to leave vulnerable to a single stroke of a pen. That's not fair to donors either.

Self-sufficiency is a path public radio actually started down in the Reagan era. The industry was pushed further down that path in the mid-1990s. Remember Newt Gingrich? Remember the phrase "glide path to zero?"

Helping to lead the charge, and working against the logic of that Public Policy 101 professor, was CPB. Significant funds were invested in developing concepts, tools, and training to help wean stations from big subsidies. Those resources still exist in the form of Strategic Financial AudiGraphics and the Community Financial Support Index in DEI’s Benchmarks, and a still relevant 1995 report by David Giovannoni called "Licensees at Risk." These resources can help public radio today.

There are more WMUB's waiting to happen. Many more. And they aren't just small market stations or university licensees.

The problem isn't fundraising as much as it is spending. Too many stations are over reliant on the subsidies they receive from CPB, their state governments, and their universities.

In a dispassionate discussion, it can be argued that the WMUB outcome is the right one. WMUB's listeners will still be served with public radio's most important programs. The cost of serving those listeners is much lower. Cincinnati Public Radio should be strengthened.

Maybe this is the future of public radio. The consolidation of costs by having fewer independent operations is an option. It would be a very messy and painful transition.

It also goes against the belief that localism is important and, perhaps, the future of public radio in the new media marketplace. If localism is important, then self-sufficiency is the ultimate option.

Many stations currently in trouble can be saved if they are willing to back away from the subsidy trough. It won't be easy and they would need help.

Self-sufficiency doesn’t have to mean eliminating government support for public media. CPB could benefit greatly from helping these stations reduce their reliance on all subsidies, including federal support. That would free up sufficient money to fund efforts to reach new audiences and fund national projects for current audiences. Right now, there's really not enough to go around. It would be a great role for CPB to be advancing the industry rather than just sustaining the status quo.

Self-sufficiency is as important as growing the audience because it cements the foundation for future service. It’s not an easy choice, but it is the right one.

Alive and Kicking in 2009

2009-01-05T23:14:00.001-05:00

Some thoughts about the coming year.

In 2009, radio will be declared dead again, but it's not.

2009 will be tough but don't buy into the fear mongering around public radio. People who believe public radio is dying don't really understand the medium. It is changing, but it's not dying.

The economy goes up and down. Markets and Missions change. Institutions and organizations adapt. It's always been that way, even for public radio.

Interactive is overrated but that's where foundation and federal grants are going, so public radio will follow the money even if it's not the most prudent use of time and resources... and even if it hurts the core radio service.

The push to interactive media ignores radio's greatest benefit... that you can listen while doing other things.

That's why the majority of listeners won't use interactive offerings from their public media entity. They want to push a button and be informed or entertained while doing other things. That will not change in 2009 and it won't be any different in 2019.

EOY Fundraising Update

2008-12-29T13:03:00.003-05:00

Listeners continue to support their stations through the GiveToPublicRadio.org website. As of 1p today:

2,038 gifts totaling $166,729

It looks as though more than $35,000 was given through local station sites and phone numbers so the total is likely to exceed $200,000. We'll know more in a few days.

Best of Public Radio 2008 Update

2008-12-27T18:09:00.000-05:00

The Best of 2008 fundraising special aired on more than 70 stations today. The overall response was good.

As of 6p (et), the special, hosted by Wait Wait Don't Tell Me's Peter Sagal and Performance Today's Fred Child, has generated 1,597 contributions and $130,006 for stations through a special website, www.givetopublicradio.org.

Many stations reported increased contributions at their local websites and some stations were receiving pledges over the phone. We do not yet know how much came in through other sources in response to the special, though it appears to be in the tens of thousands of dollars.

The special was part of a larger end of year campaign that included direct mail, eblasts, and on-air spots promoting web giving. Some stations reported increases in YTD end of year giving of up to $10,000 through these channels.

We didn't know what to expect from this experiment. The on-air fundraising special was very different from most pledge drives.

All but 6 minutes of each hour was national content, with Peter and Fred doing most of the asking.
The special preempted regular programming with "best of" moments from 2008.
It's a holiday weekend.
It was a web-based fundraiser, promoting on-line giving. On-line giving represents about 1/3 of revenues received during regular fund drives.
The website was new to listeners.
All gifts had to be made with a credit card. No invoice pledges were accepted. Today's totals represent money in the bank.
There were no premiums, challenge grants, hourly goals, or sweepstakes.

Some stations did exceptionally well. Others received very little response at all from the same programming and fundraising messages.

The average gift, from the same on-air appeals, ranged from around $40 to $127. The overall average was just over $80, which is what we typically see at stations that don't use premiums.

Technically, the day went extremely well. There were very few glitches.

There's a lot to review and a lot to learn from today's special. We'll report back to you as we have more information.

I believe we can build on today's success to create better fundraising for stations in the future. Thanks to NPR, PRI, APM, Public Interactive, DEI, Peter Sagal, Fred Child, Ira Glass, the Car Guys, Matt Martinez (our producer), Jay Clayton, and Sonja Lee for their help.

And many thanks to the more than 70 stations willing to try something new.

Funding Content Not Programs

2008-12-26T09:55:00.001-05:00

Weekend America and Day to Day were not the only recipients of large CPB grants over the past few years. Story Corps received several million dollars. This I Believe received nearly $1,000,000.

I can't speak to the budgets of these projects, I haven't seen them. But the overall model of funding and audience service is a good one.

Story Corps and This I Believe feed public radio with high quality content that reaches millions of listeners with a single broadcast thanks to the already built-in audience of the NPR News magazines.

The nature of the stories, including their length, makes them well-suited for distribution over the air, on the web, in podcasts, and in print. Lessons learned from This American Life's foray into television could help Story Corps and This I Believe develop video components.

Both projects can enhance a station's community outreach through local implementation. Story Corps coming to town is a big deal. WRNI's This I Believe Rhode Island is an excellent example of how to take the national concept and produce it locally.

It seems counter-intuitive that millions of dollars are better spent on 5 minute stories than on 1-hour or 2-hour programs. But perhaps the best way to succeed in the new media marketplace is to stop thinking about programs and start trying to find the next Story Corps or This I Believe.

More on Spending Less

2008-12-24T11:27:00.003-05:00

The industry trade publication Current is starting a discussion on public radio spending and audience growth. You can find it here.

Here's a cross posting of a response I added to the discussion earlier today. The topic is what it will cost to reach new listeners under the current spending model.
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Under the current spending model, reaching 100,000 weekly listeners with an NPR News formatted station costs between $1,500,000 and $2,000,000 annually.

Embedded in those costs are the efficiencies of network programming. Stations get world class content at a fraction of its true cost.

Most of those efficiencies don't exist for content aimed at new audiences. It's not unreasonable to expect that it would cost 50% more, under the current way of doing business, to reach 100,000 new listeners whether they were Latino, African-American, or younger.

Reaching 100,000 new listeners could cost as much as $3,000,000 per year if the new service is structured the way public radio is structured today.

That level of expense won't be supported by the marketplace. Such a station would do well to generate $1.5 million in business and listener support.

The spending model must change to support new audience growth. Either that, or CPB is going to have to redirect current investments to audience growth efforts.

Here's an interesting question, will a station in Kansas accept a lower CSG to help grow the audience in LA?

Big Subsidies Required?

2008-12-20T18:45:00.001-05:00

It's been a rough year for network programs. NPR recently announced it was pulling the plug on Day to Day and News and Notes. NPR's Bryant Park Project went silent in July. American Public Media just announced it is shutting down Weekend America. Public Radio International cancelled Fair Game back in June. CPRN, the Classical Public Radio Network, shut down earlier this year as well.

All of these programs have something in common besides being cancelled in 2008. All of them received subsidies from the Corporation for Public Broadcasting.

CPB's total investment in these programs from FY 2004 to FY 2007 was $8,200,000. FY 2008 is not included here since CPB's annual report with audited numbers is not yet available.

Subsidizing the start-up of network programs is usually a sound investment of CPB money. Successful network programs, even with budgets in the millions of dollars, deliver significant audience and revenue to stations for less expense than most locally produced programs.

Successful network programs are also supposed to sustain themselves when the subsidies go away. The failure of so many programs should serve as a warning to the entire public radio system that something is seriously wrong with the industry's spending model.

Here are the CPB subsidy numbers for the top two recently cancelled programs.

Weekend America: $4,200,000 (2005-2007)
Day to Day: $2,400,000 (2004-2007)

Day to Day produced five original hours of programing each week. Weekend America produced two original hours of programming each week. The millions of dollars provided by CPB were just a portion of each program's budget.

Both of these programs were designed to grow public radio's audience, attract new donors to stations, and attract new underwriting dollars to the industry. In short, they were supposed to succeed in the open marketplace and could not.

Day to Day was reported to have 2 million weekly listeners. Weekend America had 657,000 weekly listeners. We are now learning that those audiences were not big enough to sustain the costs of producing those programs.

This lesson must be applied to all efforts to attract new audiences. The current public radio spending model is not sustainable.

Getting new listeners is always more expensive than keeping the listeners you have. Getting new listeners requires making new investments in infrastructure and unproven content. Failure has to be funded in order to find what works. That's expensive.

On the revenue side, demographically and psychographically different audiences will not generate as much listener-sensitive revenue as the current audience. Public radio already has the audience most likely to make substantial donations to support programming and operations. The current audience is also probably the only audience for which the public radio underwriting model works well.

The working assumption for serving new audiences has to be "spend less and expect to earn less." Based on events of the last two weeks, it also appears that big subsidies might always be required to keep those new services on the air.

CPB's Annual Reports are here

Economic Realities, Again

2008-12-12T13:32:00.004-05:00

From the radiosutton archives.

Economic Realities: September 26, 2005

This year’s Public Radio Program Director’s conference included several sessions and many hallway discussions about new media technologies and the development of local programming.
The conference issue of Current, public broadcasting’s trade publication, featured articles about reaching new audiences and becoming more than just a radio station.

“What’s your business model?” and “How are you going to ‘monetize’ that?” were two of the more popular questions of the week. Perhaps it is a measure of progress that public radio now actually thinks about how it will sustain new programming and other new initiatives before spending lots of money on them, but that shouldn’t be the first concern.

Public radio’s economics have not changed much since last year's CPB-funded Brody-Weiser-Burns study found that 56% of public radio stations are not fiscally sound.

If CPB funding were to go away in the next year or so, many stations wouldn’t be able sustain their current service. Local programs or hosts would go off-the air. News positions would be cut. Important, but expensive, network programs would be dropped. New initiatives would be dropped.

To use today’s technologically hip speak – most stations’ business models aren’t monetized for self-sufficiency.

Yes, public radio would survive the cut. And the loss of CPB money would galvanize fundraising for a while. But the industry would suffer some serious setbacks.

There’s no question audience growth and diversification are important goals. Public radio should, as many folks were saying at the PRPD, “occupy the new media space.” (Though just occupying it seems a relatively low ambition.)

Sustaining these new activities, however, will be impossible without first shoring up the financial foundation of our core service. That should be public radio’s top priority.

Grow the Audience Update

2008-11-30T22:00:00.000-05:00

The Grow the Audience Project just released a new audience report and the first in a series of "Thinking Audience" pieces.

As noted in a previous posting on this blog, the project has been short on the vision/mission component of growing the audience. The Thinking Audience pieces appear to be trying to address that. You can find the first of those pieces here.

The audience report confirms again that education and personal values and beliefs play a significant role in determining who does and does not listen to public radio today.

Based on the audience report, it appears the project is leaning towards Cume Rating and Share as public service metrics of the future. More on why this probably isn't a good idea later this week.

Now That You Give a...

2008-11-08T10:25:00.001-05:00

Early indications are that interest in the election and the economy could translate into strong audience gains for public radio news stations. We shouldn't be surprised if gains among younger listeners are substantial.

The same thing happened after 9/11. We called it the "Now that you give a... darn" effect.

Many people knew about NPR and their local stations, but the news leading up to 9/11 didn't affect them enough to result in regular listening. Events changed that and they came to public radio in record numbers.

Unlike the cable news networks, public radio listeners stayed as war news became daily news. Some of that had to do with the nature of radio and cable usage. Most of it had to do with good programming and promotion around the news programs. The talk and entertainment programs provided additional value to listeners seeking news. Loyalty went up. News listeners became station listeners.

The same opportunity is before public radio today. Listeners who are in the audience for election and economic coverage can become loyal station listeners with strong programming choices, superior on-air execution, and smart cross promotion. We can't know for sure, but a surge in audience now could lead to a multi-year run of audience growth.

The window of opportunity to keep these listeners is probably small. That makes the next week a good week to take stock of your station's programming and promotion fundamentals. If it's broke, don't wait to fix it. The benefits of acting now could pay off for several years.

Voting and Public Radio Giving

2008-11-05T10:27:00.000-05:00

Yesterday's voter turnout represents a 10% to 12% increase in voters over the record set in 2004, depending on which numbers are used.

Yet the AP reports that turnout was down in some states such as Wyoming and South Dakota and possibly among Republicans in general. The reason given -- they were discouraged.

It's a good reminder that human nature is the most powerful force guiding human action. People who believed that the outcome of this election affected them personally and that their individual action could make a difference turned out to vote.

It works that way in public radio too. People who believe public radio is personally important and that their individual contribution makes a difference contribute.

It's no wonder then that many NPR News stations reported record numbers of new donors during their fall membership drives. Public radio's coverage of the election and the economy has been exceptional. It made a difference in listeners' lives.

The next time you're in a conversation about why a minority of listeners give or how to get more donors for your station, think back to this Election Day.

It's not the tote bag, coffee mug, sweepstakes prize, or challenge grant that converts a listener to a giver. It's whether or not that listener believes his or her individual action makes a positive difference. It's basic human nature.

End of Year Fundraising

2008-10-31T22:44:00.000-04:00

You might have already seen the announcement about the Best of 2008 fundraising special. It's a project we're putting together with Jay Clayton, NPR, PRI, APM, DEI, and Public Interactive.

The centerpiece of the project is a national fundraising special to air on Saturday 12/27. Peter Sagal and Fred Child will host. Ira Glass and the Car Guys will be featured. We will look back at the most compelling moments in public radio in 2008.

There's an off-air fundraising component as well with direct mail letters, eblast copy, and on-air support spots to run from Thanksgiving to December 31.

The Project Overview and FAQ is here. (PDF)

Stations can sign-up here.

Is there something you heard on public radio in 2008 worth including in the special? Submit your suggestions via email: john@radiosuton.com.

Thanks.

Growth Requires Calculation + Inspiration

2008-10-29T23:45:00.000-04:00

Most of the news out of the Grow the Audience project is focused on the math part of the initiative. How many listeners does public radio have? Which audience segments does public radio want to grow and by how much?

That's all necessary but it is no different than the work of our commercial counterparts. It's just an exercise in math.

The Grow the Audience project won't take off until there are content visionaries sharing how exciting it could be to serve new audiences. It won't take off until there are inspiring conversations about how lives can be changed and communities can be improved by public radio's service.

Consider these excerpts from NPR's first "mission statement."

National Public Radio will serve the individual: it will promote personal growth; it will regard the individual differences among men with respect and joy rather than derision and hate; it will celebrate the human experience as infinitely varied rather than vacuous and banal; it will encourage a sense of active constructive participation, rather than apathetic helplessness.

Programs in the "by and for" specific cultural, ethnic minorities category could be developed. For example, there could be a linkup of stations in urban areas with sizeable non-white audiences, or student groups studying ecology, or groups with distinct lifestyles and interests not now served by electronic media. As man pulls himself out of the mass society to develop his unique humanness, his minority identification (ethnic, cultural, value) becomes increasingly important...

In order to provide minorities access to the medium, it is not only important to establish the identity of that group, but essential if the total population is to understand and appreciate the interdependence of pluralism.

The people who wrote these words also had a vision for how to turn these ideals into content. They were involved in the creation of the service from the start. Through experience and subsequent calculation their inspiration evolved into public radio today.

Now public radio is trying to do this process in reverse; to calculate first and then find a vision to fit the math. It's a much tougher task.

You can't just go out and sub-contract for inspiration. The content visionaries have to be deeply involved in the process from the start. If they are involved in Grow the Audience at this point, it's not apparent. If they aren't, it's time to get them involved.

Fall Fundraising Update

2008-10-27T02:34:00.001-04:00

It looks like its been a pretty good fall fundraising season in public radio with many stations meeting or exceeding donor and dollar goals. Some stations are reporting record numbers of first-time givers.

It's a good reminder that public radio is even more valuable to its listeners during difficult times.

The challenge now is getting that second gift from all the first-time donors. Getting a second gift in the next 12-months essentially doubles the likelihood that a new donor will become an ongoing donor. That's essential if public radio is going to meet its goal of getting to 3 Million Givers.

Grow the Audience: Black and Hispanic Listening and Accountability

2008-10-10T09:50:00.000-04:00

The Grow the Audience project has released a new report on listening by Black and Hispanic College Graduates. You can find the PDF here.

It's an informative report and, surprisingly, one of the few published reports with any Black and Hispanic audience numbers for public radio.

One would think that with all of the time and money invested in growing Black and Hispanic audiences over the past decade that it would be easy to find reports with actual audience numbers in them.

There are lots of reports on what was done and how money was spent doing it, but virtually nothing on the audience outcomes of those investments. In other words, public radio was measuring its success based on what was created, not on how much it was heard.

It's no wonder the audiences didn't grow. The measurement of success (programming investment) wasn't in alignment with the stated goal (audience growth). One is an input, the other is an output. Under this configuration, there has been no accountability for results.

JSA submitted a commentary to the Grow the Audience project web site to address this issue. It is republished below.

Grow the Audience: Clear Goals, Sufficient Funding, and Accountability Are a Must

At the Public Radio Program Director's conference, Tom Thomas stated that the Grow the Audience project's goal is to increase the broadcast audience for public radio.

That's a strong and welcome statement about the intent of the project. Radio isn't dead. There's room to grow our public service through radio listening and there should be specific growth goals, especially among Black and Hispanic listeners.

Those growth goals should be sufficiently funded based on existing programming economic models. We know the range of financial investment required to generate an hour of broadcast listening today. Getting new listening, especially from previously unserved audiences, will cost as much or more. Anything less sets the project up to fail.

Finally, someone must be held accountable for these audience growth goals. Goals tend to be missed if they have no champion. A lack of accountability for results is among the reasons past efforts to diversify the audience have failed.

Someone needs to be in charge and needs to have incentives to succeed. That's a standard business practice on the fundraising side. Missing substantial goals gets you fired. Making them has rewards. Applying similar standards to meeting audience goals increases the likelihood they will be met.

Cheer the Phone Volunteer

2008-10-04T16:35:00.001-04:00

More than 100 public radio stations will be conducting on-air fund drives in the next week or so. Most of those stations will have phone volunteers taking contributions from listeners. Some stations will have just a few listeners answering phones. Some will have 30 or 40.

At the busiest times, up to 1,000 volunteers might be taking a pledge. At an average gift of $100, they will help public radio stations raise hundreds of thousands of dollars in just 5 or 10 minutes. This will happen again and again throughout the week.

We always talk about the importance of listener support and how it is the foundation public radio's service to this nation. That foundation was built and is maintained by thousands of phone volunteers, many of whom graciously show up at 6 on a weekday morning and then come back to cover a 4-hour shift on the weekend.

It's a workforce public radio could not afford if it had to pay for it, especially in the early years.

Please take the opportunity to thank some phone volunteers this week. If not for them, public radio would not be nearly as good as it is today... and it might not even exist at all.

Diversity and the Audience Growth Project

2008-09-30T20:49:00.000-04:00

The Station Resource Group, which is managing the Grow the Audience project, objected to my posting on public radio's poor track record regarding diversity. At issue are two adjacent paragraphs in the original posting. Here they are again:

It will be quite some time before the success of this new initiative can be measured but it should be noted now that there isn't a single African American or Hispanic person from inside public radio on the Grow the Audience Task Force. All of the diverse voices are from outside the industry.

The composition of the Task Force, unfortunately, shines a light on the inability of public radio's national organizations to recruit, nurture, and promote African Americans and Hispanics to positions of power and influence.

The SRG objected to the first paragraph, pointing out that the three diverse voices on the task force have worked extensively on the board level in public radio. It is a fair complaint. Board members, though not involved with day-to-day operations, should be considered from within the industry. The SRG provided short bios on each person and those are shown below.

The central point of my post can be found in the the second paragraph, that the composition of the Task Force is an unfortunate reminder that public radio has poor track record at recruiting, nurturing, and promoting African Americans and Hispanics to position of power and influence.

I could have written my way into that more carefully and for that I apologize. But I stand by my central point.

According to CPB's 2007 report on diversity, only 1% of officials at "non-minority controlled" public radio stations are Hispanic. 2.5% are African American. 1.3% are multi-cultural and 2.5% are Native American.

The same report shows there are no Hispanics in charge of major programming decisions at "non-minority controlled" stations. African Americans make up just 1.4% of those in charge of major programming decisions at "non-minority controlled" stations. 1.5% are multi-cultural and 2.5% are Native American.

The industry simply has to do better at providing high-level opportunities to persons of color. There is no better time to enact change than at the beginning of a major initiative such as the Grow the Audience project.

Apparently, and despite their objection to my posting, the SRG agrees. Not long after receiving their first email, the SRG sent another email saying that Sylvia Rivera, General Manager of WRTE in Chicago was added to the Task Force.

It's a start.

You can see who's on the Grow the Audience Task Force by clicking here. The SRG provided bios for 3 of the 17 task force members. They are posted with the SRG's permission.

Frank Cruz is a Trustee of the University of Southern California, the licensee of KUSC, and for the past 8 years has worked directly with the station as a member of KUSC's Board of Councilors. Classical KUSC has the largest Hispanic audience in public radio. Frank served for 12 years on the Board of Directors of the Corporation for Public Broadcasting, including as Chairman from 1999 to 2001 and two terms as Vice Chair. He is currently working an effort to bring a new, Latino-focused, English-language public radio service to Los Angeles.

Andrea Taylor has served on the WNYC board of directors since 1997 and has helped guide WNYC's dramatic evolution – in audience, funding, and facilities – over the past decade. WNYC-FM has the second largest Hispanic audience in public radio and WNYC-AM and WNYC-FM have the 10th and 12th largest African-American audiences. In addition, as a grant maker, Andrea has overseen tens of millions of dollars in production funding for public media, including major grants to our national networks.

Orlando Bagwell worked at WGBH for five years, from 1995 to 2000. He also has had a distinguished career as an independent film maker, including a key role in the historic Eyes on the Prize series. He has received two Columbia School of Journalism Duponts and two Peabodys among the many awards honoring his productions. Though he is admittedly more from the "tv side of the house," he knows – hands-on – what it means to make programming, find funds, connect with the network, do outreach, and develop an aftermarket. Orlando is directing the Ford Foundation's five-year $50 million investment in public media that includes major funding for NPR, PRI, PRX, Public Radio Capital, and several major public radio stations, all of whom he meets with both individually and collectively on a regular basis.

Fundraising and the Economy: Early Returns

2008-09-25T13:16:00.000-04:00

A few NPR News stations have started their fall on-air fundraising campaigns. The early results are good. The number of givers relative to audience is holdinig up. There's doesn't appear to be a drop off in pledge amounts of $1,000 and up.

Example: WSHU in Fairfield, CT has conducted just 4.5 hours of fundraising over the past three days. More than 700 donors have given just under $68,000. There have been 6 gifts ranging between $1,000 and $3,000.

It is important to focus on the station's service when fundraising this fall, especially with all of the important news to cover each day. The case for giving has never been stronger. Listeners experience the value of public radio every day and they appear to be quite willing to support it, even when (especially when?) they are hearing about the current financial crisis.

If at Third You Don't Succeed…

2008-09-21T22:37:00.000-04:00

Diversity was a big topic at the recently concluded Public Radio Program Director's Conference. The issue was most prominently on display in the activities of CPB, the Corporation for Public Broadcasting.

Though CPB started investing in diversifying public radio's audience more than a decade ago, the composition of the audience hasn't really changed. None of the past efforts have been significant enough in scope to add a meaningful number of new listeners.

The new effort is multi-faceted. CPB's Talent Quest has identified and is now investing in several new programs hosted by African Americans. A service targeted at multi-lingual Latinos in Los Angeles is in the works. Audience diversification will be a key component of the new Grow the Audience project.

It will be quite some time before the success of this new initiative can be measured but it should be noted now that there isn't a single African American or Hispanic person from inside public radio on the Grow the Audience Task Force. All of the diverse voices are from outside the industry.

The composition of the Task Force, unfortunately, shines a light on the inability of public radio's national organizations to recruit, nurture, and promote African Americans and Hispanics to positions of power and influence.

When was the last time a high-level executive position that influences programming at CPB or one of the major networks was filled by a person of color who came from within the ranks? When was the last time the host chair of a major public radio program was filled by a person of color who came from within the ranks? How is it that a task force charged with growing and diversifying the public radio audience fails to include a single African American or Hispanic from the industry? It's not a very good track record.

The Grow the Audience Task Force presents an opportunity to change that record, even if it means slowing the project down a bit. There are many managers, programmers, producers, reporters, and music hosts of color already in public radio who could significantly contribute to the project on a strategic level.

The argument against this will be that these individuals can participate in "working groups" that will contribute to the Task Force's recommendations. That's not good enough because working groups ultimately have no strategic decision-making authority.

Now is the opportunity to bring diverse voices from within public radio to the highest levels of strategic thinking, planning, decision-making, and budgeting. It is a golden opportunity to diversify the industry's leadership. Hopefully, the opportunity won't be missed.

Batman Versus Spiderman

2008-08-20T08:11:00.001-04:00

Some random thoughts:

A lot of what passes for interaction on the web, even among the Web 2.0 thinkers, amounts to nothing more than a Batman versus Spiderman debate. It's going to take consistently strong leadership to ensure that public radio space on the web becomes more than a place where people post their entrenched opinions.

Public radio risks giving up a lot of brand equity among current listeners by calling itself "public media." The word "media" is a poor choice for marketing the service to new users, especially to those people who have a negative reaction to the world. Think "mainstream media" or "media elite."

It's been more than a decade since public radio's first big initiative to get more Black listeners. Instead of calling those who do not listen "underserved audiences" maybe they should be called "undeserved audiences."