Public radio is adapting too slowly to the competitive challenges it faces from Internet-based media platforms, and the pace of change must increase if local stations are to thrive in the years ahead.
It’s a warning that public broadcasters have heard many times before, and research that I conducted this fall revealed that a large majority of radio station leaders have absorbed and begun acting on it.
What were the most important changes you made in the last three years?
|Changes cited among
the 89 managers surveyed
|How many cited this|
|Added news programming||65|
|Made organizational changes, including replacing a ce.o. or developing a new strategic plan||65|
|Invested in new media and or planned for digital convergence||39|
|Developed major-gift and other fundraising activities||38|
|Made non-news program changes||20|
|Took steps to “go local”||19|
|Developed new facilities||20|
|Expanded broadcast range or acquired new signals||13|
|Undertook promotional and community engagement activities||4|
|Invested in social media||3|
|Found and developed community partners||4|
|Source: Public Media Futures, November 2012 survey|
In an online survey initiated in collaboration with Public Radio Regional Organizations, nearly three-quarters of 96 respondents, mostly general managers and chief executives, agreed that public radio must adapt more quickly to shifts in media consumption. Most station leaders see the expansion of local newsgathering capacity as the best strategy for bolstering their value to local listeners.
The research, conducted in advance of last month’s PRRO Super-Regional meeting in New Orleans, also included 25 phone interviews with station leaders and a careful analysis of the revenue growth trajectories at 314 public radio licensees.
As I found in an earlier analysis, there’s a widening gap between the system’s biggest stations — primarily news/talk stations in the nation’s top 50 markets and several state networks — and “the rest of the system,” including stations in large markets that compete against each other for NPR News audiences and most stations serving medium- and small-sized cities or rural communities (Current, July 9). Many of these weaker stations split their broadcast services between news and music, and they’re waiting for the right moment to go all-news.
Regarding the pace of change in public radio, the collective response by survey participants was unusually clear: 73 percent of the 96 radio station managers surveyed agreed or strongly agreed that “Overall, public radio is changing too slowly. The pace of change must increase.” Only 11 percent disagreed.
From the survey and discussions during the New Orleans Public Media Futures Forum, which was convened in conjunction with PRRO’s Super-Regional meeting, we also found broad agreement and confirmation that:
- Public radio licensees serving major markets or operating statewide networks are defining the strategic redirection of local service towards local news;
- Revenue growth over the last decade has been heavily concentrated in these top-performing “leading stations”;
- Almost all of these stations abandoned mixed-genre formats in favor of NPR news and talk; through signal expansions, some have developed multiple program streams, pairing an all-news/talk channel with a separate service for classical music and, in some cases, contemporary music programming;
- Many of the remaining split-format stations intend to convert to all-news formats and pursue a local news expansion;
- The “go local” strategy was derived from both the sense of opportunity and reaction to perceived threats. Stations hope to fill gaps created by the decline of local daily newspapers and sensationalistic local TV news. But they also fear that digital distribution will erode the franchise value of nationally syndicated programs such as NPR’s newsmagazines.
Elevation of journalism
When asked to describe the three most important changes they’ve made at their stations within the last three years, most g.m.’s reported some variation on “We added more news.” Some said they’d hired more reporters, and others shared plans for a new talk show. One described the central goal of a new strategic plan as “elevating journalism to be our most important product.”
Another change described as “most important” was a shift to an all-news format, cited by 14 managers.
The move away from “split formats” of NPR news in drivetime and classical music in middays toward more consistent news/talk formats has been gaining momentum for more than a decade, usually with excellent financial results for stations that made the change. Among licensees reporting the strongest financial growth from 2001 to 2011, the vast majority are either large-market all-news/talk stations or state or regional multichannel networks providing at least one channel of all news/talk. (See the chart of fastest-growing licensees.)
The two major exceptions are KCRW in Los Angeles, which still airs its unique mix of news and eclectic contemporary music, and WFUV in New York, a Triple A music station that also airs news programming. WABE in Atlanta, one of the last split-format stations in a top 10 market, ranked 26th.
According to my analysis of CPB financial data, 23 all-news/talk stations and multichannel networks ranked among the 25 public radio licensees with the fastest-growing direct revenues. Two major exceptions were KCRW in Los Angeles, which mixes eclectic contemporary music and news programming, and WFUV in New York, a Triple A music station that also airs news programming. WABE in Atlanta, one of the last split-format stations in a top 10 market, ranked 26th.
Another important change cited by many survey participants involved investing in new-media services — adding web staff, enhancing their websites, and creating mobile apps — often accompanied by an expansion in newsgathering capacity.
Stations that reaped financial benefits by focusing on news programs often invested the proceeds back into their newsrooms, hiring more reporters to produce local content. Nearly three-quarters (73.1 percent) of news-station managers expanded their local news teams in the last three years. An even larger percentage — 84.3 percent — expect to expand news staffing in the next three years. Those staffing and funding plans are consistent with the conviction that the decrease of local news coverage by newspaper papers and the “if it bleeds it leads” sensibility of local TV news presents a major service opportunity for public radio.
A full 80 percent of stations with all-news or split news/music formats agreed with the statement “My station could be a major local news source . . . as important as any TV station . . . even approaching the importance of a local paper.” Many of the managers said emphatically, “We already are [a major local news source],” and others suggested, “We can do even better” and “All we need is lots more money.” To finance their news ambitions, g.m.’s are looking to major-gift fundraising and more effective solicitation of foundation grants.
Despite the broad support for the “go local” strategy among managers, this service strategy carries considerable financial risks and presents conflicts for programmers and general managers as they weigh investments in radio and digital news. I plan to explore this challenge, and how some station leaders are addressing it, in an upcoming edition of Current.
Opportunities and threats
The interest in “going local” is motivated by more than a sense of opportunity; many managers see it as a way to prepare their stations for the erosion of audience loyalty as listeners turn to digital platforms for audio programming.
Online streaming and especially the rapid expansion of smartphone mobile listening have placed access to hundreds of audio sources literally in the palms of listeners’ hands. This year’s Public Radio Technology Survey, conducted by Jacobs Media and Public Radio Program Directors, found that 96 percent of public radio members use mobile phones and 46 percent listen to Internet radio at least once a week.
“Going local” is widely viewed as the best way to hedge against this threat.
Most survey participants — 60 percent — agreed that programs from NPR and other distributors will lose some of their franchise value; 20 percent indicated that they were unsure; and 20 percent disagreed that digital platforms would undermine their station’s long-standing role as the retail outlet for national network product.
Many managers elaborated on their answers by commenting, and their responses were similarly divided. Some expressed grudging resignation to audience erosion — “This has already happened — all you need to do is talk with listeners to our high-profile national shows and discover how they consume them,” one manager wrote.
Others were confident in the enduring power of radio. A chief executive from one of the nation’s leading public radio networks wrote: “We believe radio will continue to ‘lead our parade’ for at least five years, continue to be the primary loyalty-, audience- and revenue-driver for our stations.”
Survey finds support for pubradio’s go-local option
Perceptions about the threats posed by mobile audio vary by region. Some rural station managers explained that mobile competition requires good cellphone coverage, which can be pretty spotty where they live. A manager from Iowa reported that public radio listeners there haven’t adopted mobile devices and Internet radio at the rates found elsewhere. A manager from Kentucky remarked “Broadband penetration [around here] is going to have to be a lot better than it is for Internet radio to serve our region.”
For others, the challenges of digital bypass have begun to influence their programming decisions. “Some national programs will lose value, particularly those that are just plug-and-play,” wrote one state network executive. He added: “We are already becoming biased in favor of broadcasting programs with which we have editorial partnerships or which give us the opportunity to remove/insert segments . . . [and we have added] programs like The Takeaway that are eager to work with us.”
Although the survey focused mainly on gathering the views of executives at news stations, the single question posed about the competitive challenges faced by music stations elicited similar reactions. We asked if managers view Pandora as a serious threat to public radio music.
A few respondents — some from the finest public radio music stations — expressed confidence about their competitive advantages. “Curation has a place,” wrote the manager of one influential station. “But music on the radio as a source of discovery is going to become highly limited,” leaving a niche for public radio to continue serving adventurous listeners. Another manager views Pandora as complimentary to his jazz station. “We play things you’ve never heard before. Then our listeners go scurrying to Pandora or Spotify to see if they have anything like it.”
Others were more guarded in their optimism, or acknowledged multiple challenges ahead. “We’re seeing . . . erosion in [our] music programs and the anecdotal evidence points to the online music choices [as the problem],” one manager wrote. “Plus, our audiences are aging for classical music, and there are fewer younger listeners who use public radio for their music needs.”
Cost of content will rise
Returning to our original question — about the extent and pace of change — our survey provided a reasonably clear picture of how public radio is evolving in a historically significant fashion. A majority of NPR member stations are following the lead of the large-market stations: trending away from split formats to unified, multichannel streams; reorienting budgets to put more dollars, and more staff, into local news production.
Out of the 20-plus stations leading this trend, a few are making major investments in local digital-news teams; others look to NPR Digital Services as the most economical and effective way to develop capacity for multiplatform news distribution. An even smaller group, only six total, are moving to link all three major components of public media — radio, web and TV — into a fully converged news service.
Each step in this process is expensive and difficult. Expansion of local news capacity will require tens of millions of dollars in new revenues as well as substantial budget reallocations and staffing changes. The “go local” strategies unfolding within public radio will move stations away from collective investment in relatively efficient national franchise programs toward greater reliance on untested, original local content that is more expensive to create.
To finance and sustain these changes, stations are changing their basic business models, as we have also seen within the large-market stations. The revised public-media business plan looks for healthy growth in business support (primarily for broadcast service); expansion of membership revenue, fueled largely by an increased emphasis on sustainer gifts; and a evolution of the role of general managers, who increasingly are acting as chief fundraisers, soliciting foundation support and major private gifts.
In future editions of Current, I will examine how this new mix of content, services and funding are reshaping the public radio system as a whole.
Revenue-wise, pubradio’s 25 fastest gainers