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The following essay of mine was published in the public media newspaper, Current, on Jan. 30, 2012. It’s not yet online so I’m reproducing it here with a small update to call out the role of education. I currently do work for the Public Television Major Market Group and serve on the American Public Television board, but the opinions expressed here are my own.
The stations are here so they can understand and illuminate a community’s aspirations and concerns, engage people in the life of their community, and help people reengage and reconnect with one another.
-- Richard C. Harwood and Aaron B. Leavy[i]
The remark above reflects a way of thinking strategically about the institution of public broadcasting at this point in our history. Today, public media boards and executives face such strategic questions as:
What can we do to be a more significant and engaged institution in our community?
What should be our focus, and what does that mean for redeploying resources from current activities?
How can we help nonprofit and government entities be more effective when their missions are in greater demand?
How do we respond to disruptive changes in media usage?
Our web/social/mobile efforts don’t feel effective; can we change that?
How do we reach younger people after childhood?
Do we have the right internal leadership…the right strategic skills on our board?
What is the appropriate staffing mix between content and support specialists?
Can we achieve scale and lower costs through collaborations?
How can we deal with the loss in public funding for capital equipment at a time of more rapid replacement cycles?
What’s the best way to differentiate our station from channels?
What follows won’t answer these questions for your specific situation, but it is intended to give you a strategic framework from which you can derive them.
Most of the opportunities and threats we face today apply to both radio and television, as does much of this framework, but the title, of course, borrows the current PBS slogan. Feel free to substitute your national acronym.
The reality of our business
O wad some Pow’r the giftie gie us / To see oursels as ithers see us
It wad frae monie a blunder free us / An’ foolish notion
– Robert Burns, “To A Louse,” 1785
We’re not the BBC or CBC with assigned remits; we’re a peculiarly American conglomeration of some 365 independent radio, television and joint licensees. The public tends shape its top-down view of us through NPR and PBS. The stations tend to shape their view from a community-up perspective, being in the same business as NPR and PBS, just on a more geographically-limited scale. Both views are incomplete and limiting.
A more useful way to model the local station is to consider it as having two distinct lines of business, one national and the other local. It’s common for us to view the two as a zero-sum game – the more we spend on national, the less we have for local and vice versa. But the evidence is that it is, or can be, just the opposite — a virtuous circle of mutual benefit.
National programming creates the financial margins in listener- and viewer-sensitive income that combine with grant and public funding and earned income to subsidize local programming. Local stations, in turn, provide significant financial resources to produce, market and distribute national programs.
The margins returned by national programming are substantial. Look at PBS in 2009 for example. Allocating viewer-sensitive revenue by audience, national programming returned $2.14 to stations for each $1 they invested, but other programming and production expenses returned only 12 cents per dollar.[ii]
The virtuous circle is completed if stations build multiple income streams and reduce production expenses in order to “be more local.” Strong local stations can invest in being more national, and the more predictable their revenue for national production will be.
In other words, the more we optimize each line of business, the more significant and sustainable we will be. If stations “be more PBS” (that is to say national — APM, APT, NPR, PRI), they can better “be more local,” too.
Public media are well-established in our communities and Are strongly positioned to serve their communities by bringing people together around their interests and giving them valuable, pertinent content.
Most foundations, many corporations and individuals, and even tax-based entities are looking to support innovation, partnership and positive change.
In public media we have strong, valued brands and competitive national programming generating billions of listener- and viewer-hours annually. Local stations are deeply rooted in the communities they serve, providing a strong foundation for public service hand in glove with other nonprofits with compatible aims.
The decline in journalism for print, radio and television is widely noted. New text-based online journalism efforts have been established in several cities, often with expatriates from city newspapers, and sometimes in collaboration with established public media. Few, if any, have thus far become profitable.
There are more than one million public charities in the U.S. — about 2,800 for each of the 365 public broadcasting entities. [iii] If you think public media providers are fragmented, the public charity space is much more so. And their effectiveness is limited by what John Kania and Mark Kramer of the nonprofit consulting firm, FSG, have termed the “isolated intervention of individual organizations.”[iv]
In 2010, the revenue for these charities totaled $1.4 trillion for these more than one million public charities, and they aggregated $2.5 trillion in total assets. Additionally, state and local governments collect tax revenue of $1.3 trillion collected for public service.[v] Together, these investments in public service were more than 80 times larger than the combined revenues of commercial television stations and the radio industry.[vi]
As natural conveners and media experts, public media seem ideally positioned to make a major difference in the work of the public service sector. But the “isolated impact” principle means we stand little chance of making a difference by ourselves, either; rather, as Kania and Kramer argue, our sector should be building “collective impact.”
As local stations, we have far greater opportunities in being the media arm of the nonprofit world than being the nonprofit arm of the media world.
We are dealing with fundamental long-term challenges in media usage and the media economy that are upending the entire media marketplace, including public media. Web implementation for most stations has been too limited and too often devoted to the wrong ends, failing at both its intended purpose (promotion and audience cultivation) and for the greater purpose it could serve (local content delivery). Mobile platforms are coming on fast, but local stations — with a few notable exceptions, mostly in radio — are deer immobile in the headlights.
Over-the-air television largely survived the last disruption of media-technology advance —cable and satellite networks — though with substantially diminished audiences — because the users of the new distribution platforms had approximately the same demographics as those who watched broadcasts.
The ongoing digital disruption, in contrast, actually holds greater opportunity for public media. The digital audiences are significantly younger and consumer media more friendly to their schedules than following those of any broadcaster or cable network. This is an opportunity for growth – if we take the right steps – because they comprise the demographic gap we’ve been underserving.
While most foundations and many potential major-givers are looking to support innovation, partnership and change, they also increasingly apply standards of accountability. Competition for this giving is growing because charities’ needs are growing, because government has less discretionary money to contribute, and because the charities’ fundraising is increasingly sophisticated.
Public media, especially in television, have way too little funding to replace their capital equipment with the shortened life cycles of digital technology and the loss of public subsidies such as the Public Telecommunications Facilities Program. And this will be exacerbated if we attempt to maintain what can be considered, given today’s media trends, an over-investment in capital facilities.
Strategic framework for change
The essence of strategy is deciding what not to do.
--Michael E. Porter[vii]
So we have three profound pulls in the same direction of change, and each is motivation enough for decisive action.
The opportunities we have with the charitable and public sectors should compel us to action even if we didn’t face the challenges of funding and media change. Fortunately, accepting the challenges of community engagement will help address them.
Similarly, the funding challenges alone should compel us to action even if we didn’t face those of media change and nonprofit community service.
And the demands of media change would be sufficient to move us to action even if the other two weren’t in play.
To “be more” in both of public media’s lines of business – national and local —I believe we should follow the advice of Harvard professor Clayton Christensen and colleagues and effectively disaggregate them at the station level: Give them separate strategies and often separate leadership, enabling each to grow without the imperatives of the other. [viii]
Disaggregation at the station level means pursuing these lines of business separately — the national side operating largely through the most cost-effective outsourcing and “newco” collaborations, and the local side rebooted from the ground up to take advantage of journalism, education or community engagement opportunities, with much less need for expensive capital and support staff.
In that framework, the components typically have these characteristics:
National line of business
Local line of business
There are, of course, many challenges in moving toward this framework.
One of the hardest is lack of strategic governance, or even governance that is directly involved with the station in too many cases. That’s beyond the scope of this essay, but the Station Resource Group has a good overview of this issue[x] and Bill Kling, former CEO of American Public Media, has persuasively described the limitations of universities and other institutional licensees.
Another significant challenge is lack of consensus, both within and among stations, on what they want to achieve and, especially, how they want to do it.
Many stations must significantly change course, something that will engender internal resistance. The shift will be especially significant in television stations with traditional production efforts that do not regularly produce news programming.
As a station manager, I admit, I succumbed to the temptation to “play the cards we’re dealt” — to accept past limitations as our destiny. That’s not strategic.
To “be more” locally, we must produce content that touches more of the community more deeply, that increasingly reaches listeners and viewers on their digital devices, that doesn’t require large capital outlays we can no longer afford or justify based on results, and that opens up new revenue streams.
Being more opens up a a whole new world of opportunity for public media.
[i] Richard C. Harwood & Aaron B. Leavy, Why We’re Here: The Powerful Impact of Public Broadcasters When They Turn Outward, Charles F. Kettering Foundation, 2011.
[ii] Programming from other sources like American Public Television likely provides a return similar to PBS’s but that’s masked in this analysis because they provide a smaller percentage of broadcast hours and because local programming is much more expensive per hour. Under-reporting of capital costs likely means that returns on local programs are even lower. Data are derived from PBS AFR Dataset reported in Booz&Co, “System Health and Sustainability,” 2010 PBS/CPB Round Robins.
[iii] Source: National Center for Charitable Statistics, http://nccsdataweb.urban.org/PubApps/profileDrillDown.php?state=US&rpt=PC
[iv] John Kania & Mark Kramer, “Collective Impact,” Stanford Social Innovation Review, Winter 2011, http://www.ssireview.org/articles/entry/collective_impact
[vii] Michael E. Porter, “What is Strategy?”, Harvard Business Review, Nov.-Dec. 1996.
[viii] Disaggregation is used to describe a tool of change management recommended by Clayton M. Christensen, Matt Marx, and Howard H. Stevenson in “The Tools of Cooperation and Change,” Harvard Business Review, October 2006.
[ix] Daniel Jacobson, “COPE: Create Once, Publish Everywhere,” Programmable Web, http://blog.programmableweb.com/2009/10/13/cope-create-once-publish-everywhere/
The prestigious James MacTaggart lecture is a fixture at the annual MediaGuardian Edinburgh International Television Festival. I’ve never attended one, but they’re always interesting and I look forward to catching up when they’re posted. This year’s lecture was given by Eric Schmidt, the Google Executive Chairman and, until this year, its CEO.
Here are some excerpts relevant to the focus of this blog:
Around 60% of Netflix rentals are the result of algorithmically generated recommendations.
What are the trends to watch? I can sum that up in three words: mobile, local and social. …¶… Reflecting on this, new genres of online content and services are emerging. If content is king, context is its crown – and one of the most important contextual signals is location. If you’re searching for coffee from your mobile,odds are you’re not looking for a Wikipedia entry, but for directions to a nearby café. ¶ Social signals are another powerful driver of behavior. If three of my friends highly rate a TV series, odds are I’d check it out even if reviewers say it’s rubbish. …
On TV viewing:
In fact, I don’t' expect TV viewing will ever switch to be entirely on-demand. There will always be a cultural pull, for some shows, on some occasions, to watch in real-time. Linear viewing remains remarkably robust – in 2010, over 90% of broadcast TV viewing remained ‘live.’
Updated 12 July 2011: See also Building web usage for pubmedia - challenge for TV and music radio.
Available web statistics tend to overstate the broadcast equivalent of cume and understate the broadcast equivalent of average usage (and therefore time spent using). If broadcast usage was counted like web usage, you would be counted as two in your cume if you tuned in on two radios or TVs in a given rating period. Each browser you use to access the same web site counts as a “unique.” The disappointing web performance we see for too many public media web sites is even more so in reality.
I’d suggest we’re looking at the wrong thing anyway. Inbound links (also called backlinks) drive traffic because search engine algorithms consider them a sign of respect. Given the large proportion of your traffic that comes from search engines, strategies that encourage backlinks will move your digital performance in the right direction.
This scatter chart comes from public data I looked at for the top 52 television markets – New York through New Orleans – for both radio and television (some markets are missing). The two dots in the upper left side are for NPR and PBS. In general, it shows that the higher number of sites linking in, the higher you are (lower number) in traffic ranks (both are power curves, hence the log-log scaling). The metrics are from an Amazon subsidiary called Alexa, which relies on data generated from installed browser toolbars and, as of 2008, from other unspecified sources. It’s rankings get some criticisms, but for our purposes it displays the relationship.
The following table shows organizations having more than 1,000 inbound links:
PBS | 612 | 45,831 | 0.40
NPR | 230 | 41,797 | 0.36
WNYC | 6,606 | 4,017 | 0.53
KCRW | 4,977 | 2,706 |0.48
KQED | 8,646 | 2,655 | 1.05
WNET | 37,350 | 1,935 | 0.26
WAMU | 36,986 | 1,586 | 0.66
WGBH | 16,712 | 1,349 | 0.55
WBUR | 7,827 | 1,338 | 0.54
KPBS | 25,604 | 1,266 | 1.16
WHYY | 47,901 | 1,200 | 0.40
WBEZ | 13,492 | 1,086 | 0.31
KUOW | 59,389 1,044 | 0.56
Left to right, the first number is Alexa Traffic Rank, the second is inbound links, and the third is links per 1,000 TV households. Note that all of these top-ranked stations are either radio or joint licensees – content and relationships for radio stations carrying the NPR news magazines definitely drive backlinks. Excluding NPR and PBS, the median rank = 176,654, median backlinks = 255, and median backlinks per 000 = 0.19.
--Dennis (post updated 11 July 2011)
The FCC's new state of the media report called, Information Needs of Communities: The Changing Media Landscape in a Broadband Age, is out today and can be accessed here:
This will take several hours to review but from a cursory look, seems worth the effort.
Howard Blumenthal, CEO of MiND: Media Independence in Philadelphia, circulated the following “efficiency chart” among some public television CEOs today. I thought it was worth sharing and am posting it here with Howard’s kind permission. --Dennis
Please allow me to explain the chart…
1. As we all know too well, one of the key media trends has been "disintermediation." We now buy music from musicians, so record labels, record distributors and record stores no longer control the music business; same for many other media. And so, the top chart, with just "You Tube" in the distribution path, is a disintermediated model. Replace YouTube with any single system or distribution brand. Disintermediation is efficient, mostly because it eliminates "middlemen."
2. It would be difficult to find a media model that's more intermediated than public television. That's the second model, filled with entities and brands and expenses that each require staff, technology, handling, priority in the eyes of the viewer, and more.
As we contemplate the future of public media, and the role of the stations in that future, we must seriously consider the model that we have built. It's clunky, costly, challenging to innovators, and ultimately, adds only marginal value to the consumer who wants to watch, say, Antiques Roadshow. If the brand is "pre-school children's programming," perhaps several program brands (Curious George, Sesame Street) can be clustered under a master brand. Unfortunately, we've got a whole lot more than just two brands happening in the second model.
If we're going to succeed long-term, we need to face this challenge. Otherwise, other, more efficient models will take the place of our well-established institutions.
Enjoy the chart. If you want to discuss, I'm available.
Terry Heaton is a consultant primarily to commercial television who in my view has a great track record of anticipating disruptive change for broadcasters and recommending responsive strategies. His latest essay titled above is right on, for both commercial and public television.
Unbundled television is the polar opposite of the broadcast model, and media companies aren't prepared whatsoever to compete in this new universe. Everything that we know, everything that we practice, everything that we believe in is tied to that which bundles the content we create or distribute to the infrastructure that's doing the distributing. Separate the two, and we are fish out of water, flopping helplessly on the dock of user demand.
Don’t miss this essay, especially his eight recommendations. The only one I’d amend is the 7th on RSS, to which I’d add API distribution.
Link: Local Media in a Postmodern World. --Dennis
The following quotes from a dear colleagues email sent by Hearts of Space producer, Stephen Hill, earlier today. See also this related post. --Dennis
SIX STEPS TO A USER-SUPPORTED PUBLIC MEDIA SYSTEM
1. Re-define the role and identity of stations as "locally-focused public media network nodes."
2. Extend the Public Media Platform to every station web site as a matter of system policy, so all public media content is available at every point of entry to the network. This can be as elegant as a single Public Media Player on mobiles or the web, or a full service embedded "site-within-a-site."
3. Re-align the financial relationships and incentives between networks, stations, content producers and affiliates so everyone has a stake in the success of the network as a whole.
4. Define a practical set of revenue-sharing policies between stations, networks, producers and affiliates. (For example: ultimately stations might not pay dues and program fees to NPR, but receive a net revenue share from it.)
FOR THE PUBLIC
5. Create a comprehensive set of free, voluntary and paid digital service models for the public as a means of attracting significant new revenue for the system.
6. Create a national Public Media Network membership for end users, with multiple tiers of service and access to premium digital services and archival content as benefits of paid membership.
Stephen Hill, whose Hearts of Space program is familiar to public radio listeners, is out with a new proposal for funding public media. Stephen has built a successful online and radio business in a "niche of a niche" and has learned a lot along the way about content economics. This is a long document but well worth your time to read and discuss.
The following quotes from an email he sent out today:
I've posted the paper I've been working on since June 2010 to my blog and sent a text version to the Pubradio list. (The list appears to be down at the moment due to a hosting change, but it should show up soon.)
The ideas I'm advancing in this paper for reform of the business and service models of public media have taken on added relevance in recent weeks, and have convinced me that now is the time to go public with it. It is very strange to find myself ready to agree to phasing out Federal funding, but for the radically different reasons than those who are pursuing a partisan political agenda. I am convinced that
If public media is to secure its future, it must be with the public.
You may have received a draft in the past. I've revised the paper substantially, and I hope the attacks on public media will encourage you to reconsider it in the light of the challenges we face. Frankly, it's a long and demanding read, but there is nothing like being threatened to focus the mind.
I solicit your comments and criticism. Please email me links to any blog or public forum in which you post responses.
Printable PDF: Funding the Future of Public Media.pdf
Regards :: SH
Recently, I’ve found myself tweeting more from @haarsager and blogging less. Most of the tweeting has the same media economics and technology content as I normally put in the blog, so thought I’d share them here. So I invite you to scan my January tweets (those off topic have been deleted for length) for some interesting and, in some cases, important links. --Dennis
gleonhard “Content is no longer king. Its throne has been taken by experience” http://instapaper.com/zRx3x612B a snippet from Midem 2011 about 4 hours ago via Instapaper Retweeted by haarsager and 7 others