Keeping It Real

On Friday, This American Life retracted its program about working conditions at the Foxconn factory that makes Apple products due to embellishments and inaccuracies in the story. This American Life also produced new reports and interviews to set the record straight and to explain how its fact checking process went wrong.

Also on Friday, many public radio stations were running Fresh Air's rebroadcast of an John Updike interview. Early in the conversation, Fresh Air host Terry Gross asked Updike about the virtues of accuracy in writing novels. While they were talking about literature, Updike's response very much applies to the news business.

Updike: "The literary art is a parasitic one in that it's energy comes from the energy of the real and so accuracy is one way of describing the close approximation to the real that we all sort of live for."

It's a good reminder that as news storytellers, we in public radio are responsible for uncovering the realities of the world, not defining them.

Our listeners come to us because they want to be as close as possible to what's real. It's how they come to understand the world, their place in it, and if they so choose, how they can make it better. They trust us to be accurate.

We should be proud of This American Life for pioneering new forms of journalistic storytelling. It brings listeners closer to what's real. And we should be proud of This American Life for retracting its Foxconn show. It lets the world know that accuracy trumps agendas.

It's better to not make mistakes at all but how we respond when we are wrong is just as important to maintaining our bond of trust with listeners as getting the story right in the first place.

You can hear the Updike interview here. The section on accuracy begins at 4:21 in the show.

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.

Miscellaneous Thoughts on NPR Digital

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.

An Alternative Revenue Model for NPR Digital

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

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

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

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

--- 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

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

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?"

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.

Thank You Ellen Weiss

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

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?

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...

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

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.