RadioSutton Blog: 7th Anniversary

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.

Are On-Line Listeners Even More "Elite?"

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

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

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

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

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.

Turns Out People DO Know About Public Radio

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

And We're Back...

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.

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

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.

DeadRadio 2020: The Financial Implications

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?

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.

Grow the Audience: Accountability Begins at CPB

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

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

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

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

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.

Grow the Audience:Defining Inclusiveness

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.

And We're Back...

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.

Not All Public Radio Stations Control Their Destinies

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.

More Federal Dollars = Less Listener Support?

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.