PMDMC 2010

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Financial Burden on Stations Grows

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

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

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

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

NPR Out-Promotes Stations on Their Own Airwaves

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

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

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

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

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

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

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

The Power of Sound

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

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

Alive and Kicking in 2009

Some thoughts about the coming year.

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

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

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

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

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

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

If at Third You Don't Succeed…

Diversity was a big topic at the recently concluded Public Radio Program Director's Conference. The issue was most prominently on display in the activities of CPB, the Corporation for Public Broadcasting.

Though CPB started investing in diversifying public radio's audience more than a decade ago, the composition of the audience hasn't really changed. None of the past efforts have been significant enough in scope to add a meaningful number of new listeners.

The new effort is multi-faceted. CPB's Talent Quest has identified and is now investing in several new programs hosted by African Americans. A service targeted at multi-lingual Latinos in Los Angeles is in the works. Audience diversification will be a key component of the new Grow the Audience project.

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

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

When was the last time a high-level executive position that influences programming at CPB or one of the major networks was filled by a person of color who came from within the ranks? When was the last time the host chair of a major public radio program was filled by a person of color who came from within the ranks? How is it that a task force charged with growing and diversifying the public radio audience fails to include a single African American or Hispanic from the industry? It's not a very good track record.

The Grow the Audience Task Force presents an opportunity to change that record, even if it means slowing the project down a bit. There are many managers, programmers, producers, reporters, and music hosts of color already in public radio who could significantly contribute to the project on a strategic level.

The argument against this will be that these individuals can participate in "working groups" that will contribute to the Task Force's recommendations. That's not good enough because working groups ultimately have no strategic decision-making authority.

Now is the opportunity to bring diverse voices from within public radio to the highest levels of strategic thinking, planning, decision-making, and budgeting. It is a golden opportunity to diversify the industry's leadership. Hopefully, the opportunity won't be missed.

Batman Versus Spiderman

Some random thoughts:

A lot of what passes for interaction on the web, even among the Web 2.0 thinkers, amounts to nothing more than a Batman versus Spiderman debate. It's going to take consistently strong leadership to ensure that public radio space on the web becomes more than a place where people post their entrenched opinions.

Public radio risks giving up a lot of brand equity among current listeners by calling itself "public media." The word "media" is a poor choice for marketing the service to new users, especially to those people who have a negative reaction to the world. Think "mainstream media" or "media elite."

It's been more than a decade since public radio's first big initiative to get more Black listeners. Instead of calling those who do not listen "underserved audiences" maybe they should be called "undeserved audiences."

Public Radio Core Values in a Web 2.0 World

Public Radio’s Core Values are frequently mentioned on this blog, most recently in the context of how public radio can preserve and apply its Core Values across new distribution channels and in social media. That’s a topic worthy of further conversation, so let’s start one.

First, some background. About 8 years ago PRPD, the professional association for public radio program directors, set out to uncover and articulate Public Radio’s Core Values. The process was thorough and included resources to help stations and program producers identify and nurture Core Values in all forms of programming including fundraising, underwriting, and promotion.

Today’s challenge is to do the same in a Web 2.0 world, especially with blogs and user-generated content. On one hand, public radio needs to ensure the Core Values of the “brand” are protected. On the other hand public radio can’t ignore or suppress the richness of Web 2.0 opportunities.

How does that happen? Which of public radio’s core values have universal application? That is, they apply on the radio, to the written word, on video, and in community dialog. Which of public radio’s core values don’t translate to Web 2.0? Do other values need to be uncovered and defined so public radio can maintain its identify in new spaces? Does public radio’s identity change beyond calling it public “media?” How so?

Leave comments here or join the dialogue at DirectCurrent.

To ensure that “Core Values” isn’t reduced to a mere buzz phrase, here’s a link to the original introductory report from the PRPD Core Values project. Please read it as part of participating in this discussion, even if you read it before. And here are the Core Values:

Qualities of the Mind and Intellect
Love of lifelong learning
Substance
Curiosity
Credibility
Accuracy
Honesty
Respect for the listener
Purpose

Qualities of the Heart and Spirit
Humor
Idealism
Inspired about public life and culture
Belief in civility and civil discourse
Generosity

Qualities of Craft
A uniquely human voice
Pacing that's appropriate to the substance of the content
Attention to the smallest details of music, sound, language

Buy Panties, Support Social Media

This, we are told, is public media's future. Bloggers don't have to use the advertised products, right?

Social Media and Core Values

Updated 8:20p: Jeff Jarvis' blog BuzzMachine went down earlier today and our links to his site are no longer working. We will try to fix that. In the meantime, you can read the Jarvis blog that inspired this post by going to buzzmachine.com and scrolling down to the July 13 posting "A Cure for Curmudgeons."
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Jeff Jarvis is one of the leading proponents of social media. He is widely read and influential. That's why the values he brings to his postings matter. They are defining the Core Values for many of those who will follow the path he is blazing.

I picked up this Jeff Jarvis posting via Current.org. The post revolves around a familiar theme -- social media is the future, traditional journalism is dead -- but it says even more about Core Values and opportunities for public radio.

You really should read the posting and subsequent comments for yourself. It reads much like a commercial radio talk show host sounds. Many of the commercial talk techniques are present. Issues are presented in divisive terms. People who strongly disagree with the position of the "host" are dismissed through mockery. The "cause" is presented as a "war" complete with a campaign to discredit and marginalize others. There is heavy self-promotion.

Not exactly the values public radio aspires to. And that's okay.

Public radio hasn't cornered the market on Core Values. Public radio values serve public radio audiences well. Different audiences respond to different Core Values.

This is the crux of the social media/traditional journalism conflict. The issue is positioned as "either/or" but a fragmented marketplace dictates "both/and." There will be a market for traditional journalism, there will be a market for social media, and there will be markets for hybrids of the two.

Ultimately, those markets will not be defined by the media platforms or academic definitions of journalism. They will be defined by the values and interests shared by content creators and audiences.

The opportunity for public radio is to learn everything we can about using social media tools from the Jeff Jarvis' of the world. Ensuring that public radio's Core Values translate to social media isn't Jeff Jarvis' job, which is probably a good thing. That responsibility still rests with public radio's leadership and content creators.

Vetted Journalism

About 10 years ago, Walter Cronkite helped out with some public radio on-air fundraising by recording an interview to be used in pledge drives. One of his central points was that you could hear "good editing" in public radio news. He talked about the importance of continuing to invest in the editorial process.

That's why this article in the New York Times about the vanishing copy editor caught my eye. Web 2.0 makes Mr. Cronkite's point more important than ever. A public radio listener said to me the other day, "Think about the number of times you see something on the web, often forwarded to you by a friend, and when you read it you say 'that can't be true.' And a quick check on Google proves it is not. Then think about the number of times you listen to Morning Edition and say, 'that can't be true.' Almost never. It just doesn't happen."

The amount of unedited, unchecked content will grow exponentially faster that fact-checked, well-edited content. This creates what might be one of the most significant niches for public radio in a Web 2.0 world, vetted journalism. Put another way, there will always be a market for accuracy and the well-chosen word. Maybe that's why services such as getanedit.com are starting to pop up. (I have no financial interest in this service.)

Investing in the editorial process should be a priority for public radio (or public media if you prefer). This is true at the network level and even at the smallest stations. The phrase "everyone needs an edit" applies universally. If applied consistently, public radio can become a shining star over the new media landscape.

Will the 1-in-10 Myth Ever Go Away?

It might be the most popular statistic in all of public radio – that just 1 in 10 listeners donate money.

And it’s wrong.

Dispelling the 1-in-10 myth is essential to understanding public radio’s current business model and figuring out how to adapt to a changing media environment. It could prove very costly if new business models for public radio are built on the assumption public radio stations are lousy at converting listeners to givers.

Most stations are already doing a much better job at getting donors than indicated by the 1-in-10 Cosmetric.* Unfortunately the myth is perpetuated through bad math. Most people arrive at the 1 in 10 number by dividing the number of annual donors to a station by the number of weekly listeners to the station. There are several problems with this approach.

One is that two or more people living in a household tend to contribute as one giver. They count as two people in the weekly audience but as just one donor in the 1-in-10 math. An Audience 98 report accounted for household giving and found the ratio to be more like 1 in 5 weekly listeners was a current giver.

That’s current givers. Nationally there’s about a 40% annual churn rate among donors. Over a several year span it’s easy to see where 30% to 40% of all weekly listeners would have given to public radio at least once, even when considering the churn of the weekly audience.

The 1-in-10 number suggests that public radio stations are lousy at converting listeners to givers... or that most listeners are cheapskates. Neither is true. While there’s always room for improvement, stations are doing a good job of getting core listeners to give. The challenge is to get listeners to give more frequently. The first step in that direction is letting go of the 1-in-10 myth.

* Cosmetrics are numbers that look like meaningful statistics even though they have no real value.

The Tangled Web We Weave

There's a new and growing obstacle in the effort to shorten station pledge drives -- underwriting and major donor revenues.

An increasing number of stations are using pledge drives as leverage for closing underwriting and major donor deals. It's a win-win when those deals result in challenges, premiums, or giveaways that generate more pledges, faster.

The downside is that stations are closing more of these deals in order to boost major donor and underwriting revenues. Shortening pledge drives mean fewer deals can be made. In essence, shortening pledge drives reduces the inventory of value-added selling opportunities. That isn't sitting well with some. For example:

- A station exceeded its 14-day pledge drive goal two days early. Programming and membership wanted to end the drive after 12 days but couldn't because of promises to let station underwriters come on the air and pitch.

- A station trying to plan a 1-Day pledge drive (it usually does 5 or 6 day drives) gets internal resistance because there are no challenge grant opportunities for underwriters or major donors.

These problems aren't so great that they can't be solved over time, but they do present an interesting question.

Are stations putting future underwriting and major donor revenues at risk by linking them too closely to pledge drives?

Can Public Media Survive the Death of Listener Support?

Radio is dead. TV is dead. The Public Radio Membership model is dead. All have been declared dead is recent months by various Web 2.0 bloggers.

What's up with the whole "dead" thing anyway? It seems that declaring something dead is a rite of passage for freshman Web 2.0 gurus.

While the death of all these institutions is far from certain, let's play out these dire predictions.

Imagine a world where most public media is consumed via the web instead of over broadcast spectrum designated for educational purposes. Federal funding will go away.

Imagine a world where listeners are no longer the primary source of income for public media. Corporate and business support will rule.

Public media will morph into commercial media. Some entities will remain non-profit, but they will be dependent on commerce to succeed.

The industry is already well on its way to this commercial, non-profit status. Evidence of this is found in radio and TV underwriting credits and in pledge drive promotions designed more to satisfy business supporters than to generate listener contributions.

In this new environment, any content provider, commercial or non-profit, could adopt the "public media" label. This is already happening. XM has XM Public Radio. Many public broadcasting producers are for-profit entities. Most of the lines that distinguish today's public broadcasting from commercial media will blur and eventually go away.

Today's public radio listeners value what they hear because they know they can trust what they hear. That trust is built in large part on public radio's funding model. It's a cliche but listeners trust the content because "they are the public in public radio." Remove them from the equation down the road and "public media" will just be media.

Budgets Reflect Priorities

According to Current, NPR's on-line budget is going up 43% this year to more than $13,000,000.

That's probably a wise investment. It takes significant money to cultivate new audiences. It's entirely possible that $13 million a year isn't enough to do the job.

Which brings us to the main point of this post. Budgets reflect priorities.

NPR is leading the way by showing how to make growth a priority. From here on out, any national entity -- NPR, CPB, PRI, or APM -- that doesn't back its talk of diversifying the audience with an ongoing, annual budget in the tens of millions of dollars is just blowing smoke.

A Brighter Outlook

On one side there are those who are forecasting that on-demand and user-generated content will put an end to radio as we know it. On the other side there is the recent Bridge Ratings study which projects the weekly number of listeners (Cume) to all terrestrial radio will drop just 8% over the next 13 years.

The Bridge numbers seem optimistic given the prevailing mood in public radio. Several bloggers reporting from the Public Media conference in Boston a few weeks ago referred to a sense of gloom and doom. Then again, that could just be the industry’s scarcity mentality. Public radio has always had a low opinion of its potential.

Seldom do we look at the coming change and talk about doubling the number of weekly listeners to public radio. In fact, we’re often told these days that we shouldn’t think of them as listeners. That’s absurd, of course, because there will be billions of opportunities per year to provide public service through people’s ears.

If anything, the number of opportunities to provide public service is increasing several times over. The Bridge Ratings study reports that Internet radio is expected to have a monthly audience of 197,000,000 in 2010, a gain 140 million new listeners. It projects that 109,000,000 people will stream content over mobile phones. Every one of those people will be able to access any terrestrial radio station that streams it programming.

This is an important point. New delivery platforms are increasing, not decreasing, the number of potential listeners to public radio. That’s true even if the Bridge Ratings projections are off by 100%. Weekly Cumes will grow if we manage our resources well.

The danger ahead is lower Loyalty to public radio across all platforms. Winning as much of someone’s combined terrestrial radio and Internet radio listening as possible is essential to keeping listeners in the donor base. This listening can be won if we choose to compete for it.