NPR CEO Vivian Schiller

Radio towers gone in 10 years?

The most surprising comment she made was her assessment that the business of distributing audio programming via radio towers would be largely gone in 10 years. Though not a direct quote, here’s the transcript-like version:

Some smaller affiliates weren’t really set up for digital, so we had to provide tools for them so they could be part of the process. Some of this was tools for photos, etc. But fundamentally, helping them deliver audio streams. Radio towers are going away within 10 years, and Internet radio will take its place. This is a huge change and we should embrace it. Mobile will play a big part. [emphasis added]

I’m as big into new media as anyone, but even I was shocked that NPR’s CEO would make such a bold statement. Perhaps it was a heat-of-the-moment kind of thing. I don’t know.

Certainly Internet-delivered audio streaming and audio programming (not to mention, video, text, etc.) is gaining ground on old-school delivery technologies. But a 10-year countdown on radio transmission strikes me as a bit fast. This is a generational change, a slow process. Consider the strikes against this prediction:

• Audio programming, as practiced by NPR and her affiliates, is still a mass media experience — it’s not personalized or socialized to individuals. “We report, you decide” is the model. For that, mass distribution via radio makes a lot of sense. It’s more efficient for most use-cases in play today (listening during “down times” to and from work, running errands, at the desk, on weekends).
• Car-based Internet access remains experimental today. Yes, I can take the iPhone in the car, keep it hooked to the Internet and stream audio, playing it back on the car stereo. But that’s still a wonky process only geeks could love. My 70+-year-old mother has an iPhone and loves it. But she’s not listening to radio on it. And certainly not doing that while hooked up in the car.
• Mobile Internet access, especially at mass quantity, is getting more expensive, not less. AT&T’s repricing moves announced yesterday are part of that trend. Carriers, knowing the incredible capital expenditures required to build out towers, backhaul and more, can price their service in ways that lock out casual users. For those casual users, radio remains a free alternative.

And there’s more. But there are also factors that support Schiller’s contention from the user perspective:

• New cars are already starting to get live Internet and “sync” capabilities. It’s still rare and a little pricey, but it’s here and it will grow. When your car has a simple media center in it that syncs (downloads podcasts) via WiFi when it sits in your garage or driveway, new possibilities appear.
• The staggering majority of news is not real-time in nature and does not need live streaming. Therefore, a fast record/deliver model could supplant radio broadcast for almost all NPR programming. What if Morning Edition was delivered to the car very, very fast, and it was ready for you when you turned the key in the ignition for the morning commute? A super-fast podcast may be all you need 99% of the time. Local station? Not needed for transmission. Indeed, a local station would just get in the way.
• It’s easy to imagine a phone/car ecosystem that will unite the two in consumer-friendly ways. I’m not talking about hands-free speakerphones, but much more. Consider the possibilities when a car with WiFi, Bluetooth, media center and GPS functions unites with a WiFi/Bluetooth/3G smartphone and Internet access that’s both broadband (WiFi at home) and narrowband (3G) in nature. Non-live programming goes broadband. Live programming — when needed, which is rarely — comes in via narrowband on demand.

10 years sounds like a short time. But in the technology world, it’s a near-eternity. Consider what Google looked like 12 years ago (1998):

All in all, you can count me as a skeptic on the “gone in 10 years” idea. But I’m delighted someone in a powerful leadership position is thinking big. To me, the real question is when will we cross the line at which point radio technology investments become a liability rather than an asset?

The Battle Royale of Network vs. Stations

Aside from the user-centric and technology issues are the financial and “power” issues. Be sure to read John Sutton’s post where he starts to look at this. Though Schiller talks about collaboration in the news production and distribution business that includes local stations, those notions remain largely ethereal. Setting aside the Argo Project — it’s both too tiny to demonstrate meaningful results and it’s being done with Bryant Park Project-style largesse that cannot be sustained — what work is NPR preparing to do to bring station leaders along when it comes to mission and revenue? Not much that I can see today.

Because the problem isn’t with NPR. They’ve got the digital talent. They’ve got the lion’s share of reporting capacity. They can aggregate advertisers and listeners at scale. Though they couldn’t stay the same size, they could make it on their own without the stations. The problem is with the stations.

Stations have gotten fat and happy buying NPR stuff (even at highway robbery rates) because the audience loves the content and enough of them give money. Plus advertisers like pubradio demographics. It’s working. TV is struggling to survive while radio is largely doing okay. But stations aren’t doing what Schiller appears to want: significant local reporting that would allow for news collaborations network-wide. For her notions of a news network to work, someone outside NPR has to be producing news content and sharing it. Too many stations have too little capacity (or none at all) in this area. And many stations funded by CPB are music-primary or heavily music-based, taking them further from public service news.

So we’re left with a hinted-at battle between the network and the stations over money, power and mission. Or rather, it’s a re-ignition of an old battle that started when the Internet burst onto the scene 10 years ago. Given that NPR’s Board is largely populated with station management, Schiller could be in for some interesting conversations in the months to come.

All this said, readers should note a portion of the Q&A session from her appearance at D8:

Is there a way to support NPR without supporting the local station?
Schiller: No, not really. The lifeblood of NPR is the local station. You’ll note we always route the membership drives through the local station. However, we do have a philanthropic support through the NPR Foundation, but that’s not for small individual donations.

But the listener can go directly to NPR in the Web model, and doesn’t need to go to the local affiliate. So what’s the local affiliate’s role in the new paradigm?
Schiller: The fact that so few journalists are covering state and local news is scary. We’re committed to providing that local coverage via the affiliates. “We’ve got to have that local coverage, and NPR can’t do it….To the extent that [local coverage] doesn’t suit your needs, then we have to work together to make it meet your needs.”

News Collaboration and Revenue Streams

While we’re on the subject of Schiller’s comments, be sure to check out this video clip in which she talks about collaborating on news content and on pubradio’s revenue streams:

http://s.wsj.net/media/swf/main.swf

Personally, I’m enamored of Schiller’s vision for the future, of a true news network in which the far-flung nodes are as active in the news process as the central, and to each his own strengths.

But I think that model, and the business operations required to make it go, look extremely different than what the system looks like today. So different that current station management will likely fight it with all their remaining power.

Because yes, the towers will go (too expensive), the middle management will go (too wasteful) and you’ll be left with journalist-bloggers focused on community news that operate local public service networks and both report and instigate reporting from others. Plus you’ll have some sales people and technical web people. In many communities it won’t look like public radio at all.

We just don’t know how fast all this will happen.

Up for discussion amongst a small group of public media tech types? Collaboration and community, or at least that’s what I’m expecting.

Many of you can probably list conference after conference and presentation after presentation, especially in the digital media space, where we all swear to stay in touch and share project ideas and methods, but it just never seems to happen. And I’m as guilty as the rest!

Lots of smaller projects have popped up over the years, including the #pubmedia chats happening each Monday evening with the help of some public media Twitter luminaries.

What each of the projects have lacked is either staying power or depth of collaboration, mostly driven by a lack of time to pursue collaborative work instead of individual (station-focused) digital production.

With the help of Allen Gunn, I’m betting on a great meeting and some sustainable work to benefit our communities and colleagues across the public radio, TV and web universe. Hopefully there will be more to report by the weekend.

Personally, I’m fairly disappointed in this turn of events. Perhaps KQED will tell its side of the story in the days to come.

So far, all that’s available is speculation and back-room chatter.

In discussing the NPR News app, host Leo Laporte and Alex lavish praise on NPR itself for doing such a great job meeting the needs of Internet users that want access to NPR News and other public radio content and stations. They also rave about This American Life (currently the #2 podcast in the entire iTunes podcast directory) and the heavily revised NPR.org.

But then things get interesting.

Laporte and Lindsay don’t stop with reviewing the app or praising NPR. Together they demonstrate both tremendous insight and notable ignorance of how public radio is architected in the U.S. Here’s what’s right and what’s wrong in their discussion:

Right

• The NPR News app, combined with the new NPR.org, is one of the most advanced distribution approaches in use by a major media company today.
• Livio is offering an Internet-connected radio with built-in NPR branding and features ($200).
• NPR was afraid to offer fully atomized programming elements via the web in an on-demand fashion for many years due to fears of station backlash, and resisted that through the early days of podcasting, despite prodding from Laporte and others in the tech world.
• Donations from listeners are still primarily directed toward stations, not NPR itself, and national producers reinforce that notion currently.
• NPR has done what many media entities have not done: face the future and make significant changes to the way they distribute content, answering the requests of listeners, even if it means stepping on local station toes.
• NPR produces industry-leading audio programming; it’s the “gold standard” in audio production and other professionals use it as a benchmark for their work.
• This American Life includes advertising in its podcast (it may be “sponsorship,” but it sounds to listeners like advertising). Laporte also realizes that advertising in a podcast gets around FCC regulations governing nonprofits and broadcast advertising.
• This disintermediation — content flowing from producers to listeners directly, without local stations — could be “the beginning of the end” for NPR stations across the country.
• Given the way content is produced and distributed in this new model, there needs to be a “reversal” of how the system works, in that NPR should pay local station reporters for news gathering (this is also listed below in the “wrong” section).

Wrong

• Alex says the app is “either free or $0.99″ — it’s free, no question about it.
• All Things Considered is not produced by a network other than NPR — it’s not from APM, it’s not from PRI, etc.
• Lindsay suggests that NPR should be paying local reporters for their reporting. What he doesn’t know is that NPR already does this, it just does it on a pay scale and frequency that’s not sustainable for local journalists.

Given how badly most people understand the public radio system in the U.S., they get a ton of this stuff right. And they instinctively know how the disintermediation game works — Laporte used to work on the defunct cable channel TechTV but today has built his own network of audio (and now video) podcasts and streams, amassing more than $1,000,000 in annual revenues for his 2-4 person multimedia production house. (For the record, he’s also a commercial radio broadcaster.)

“The Reversal”

I was shocked by Alex Lindsay’s suggestion that the economic model on which the network/stations system works should be turned on its head. That’s something I’ve been saying since about 2006, once I realized that the content power rests with NPR, but the radio distribution power and the social relationship power rests with geographically-bound stations.

I’ve been laughed out of more than one conversation when suggesting NPR should pay stations to distribute their content. Or at the very least, NPR should be passing its content to stations for free or for the cost of operating the distribution system (PRSS / ContentDepot).

Today, stations pay anywhere from tens of thousands to millions of dollars annually to NPR for the “privilege” to carry their content (depending on market size and lots of other factors). That’s the bulk of NPR’s income: fees collected from local stations. That’s why you pay your local station and not NPR (although NPR does sell advertising space nationally and they do seek high-dollar gifts from rich donors).

Some think the annual CPB operating grants go straight to NPR and PBS, but they do not. Only tiny bits go to a few specialized programs or services at the networks — the vast majority of CPB’s money goes out to 600 public radio stations and 350 public television stations every year (67% to TV). That model has been in place for decades.

But it’s time we rethink this model. Maybe we don’t need a total reversal of all the flows. But the balance of power has shifted dramatically into the hands of the major national producers at the same time they’ve sucked the life out of most local public media outlets in the country with their incredibly hefty (extortionary?) fees. Money collected locally keeps the lights on and pays the national producers, but it affords precious little local production of any sizable amount or quality.

This has to change. Or we might as well just nationalize the system, a la BBC, and get it over with. Either approach can be made to work, but the current model doesn’t match how the world works in the 21st century.

Listen for Yourself

In any case, check out the conversation to hear these comments and insights from outside the public radio universe. It starts around 1 hour, 20 minutes in the original podcast. Or just listen to the excerpt I’ve clipped here (or click the play button below). The excerpt is about 5 minutes long (MP3).

Jesse Thorn, host of public radio’s The Sound of Young America (which is really a podcast that happens to be on a handful of 25+ public radio stations nationwide), speaks with Josuha Benton (Nieman Journalism Lab / Harvard) about his notions of creativity, business, media scale, public radio economics, audience interaction, passion, awesome content and more.

In particular, he nails the problems of the public radio industry today: the saturation of the older, educated white market and the industry’s pull back from attempts to stretch into new market segments with old formulas. He also keenly understands and explains the financial models in “the system.”

Because what Thorn proposes is that public media programs, hosts, writers, and others do is, well… make great content and directly interact with the audience that gels around the content and experience. He’s suggesting you build a Tribe.

Take a listen…

• Introduction
• Part 1: Web / Audio (MP3)
• Part 2: Web / Audio (MP3)
• Part 3: Web / Audio (MP3)

While listening, pay special attention to his observations about how he pays himself for his work, how he interacts with his audience, and how small-scale his show’s production model is. Also pay attention to how he thinks programs in the future will work — using mass media as “calling cards” or “advertising” for the interactive media experience the programs are creating.

From a Tribes perspective and a mass media model perspective, there’s only one other major national project I know of that’s doing the same thing: Planet Money, in a tiny, experimental pocket of NPR. And that could be said to be an outgrowth of the defunct Bryant Park Project.

There will remain a place for mass-produced and mass-appeal general news production. But for everything else, and especially for any local station that wants to survive, your future is in building a community around awesome content and services, a la Jesse Thorn.

–

Bonus Listening: If you haven’t heard the SxSW presentation by Merlin Mann and John Gruber on creating content online, that’s your immediate next destination. Indeed, here’s your reading list for surviving in the 21st century media world:

• The Cluetrain Manifesto
• Here Comes Everybody
• Tribes
• The Jesse Thorn interview (above)
• Merlin Mann and John Gruber at SxSW 2009

Double-Bonus Listening / UPDATE 2009-04-19: Thanks to the unstoppable Jesse Thorn for stopping by with a comment (below) and sharing the link from the discussion at the 2009 Integrated Media Association conference in Atlanta. Highly recommended, too. Thanks Jesse!

• Merlin Mann, The Bros. Chaps & Jeff Olsen of adultswim.com on Online Branding: The Sound of Young America

On Thursday, August 14 we began, in earnest, the reorganization of Alaska Public Telecommunications, Inc. (APTI) in Anchorage, Alaska. APTI is a public media company that operates KSKA Public Radio (FM 91.1), KAKM Public Television (Channel 7) and the Alaska Public Radio Network (APRN).  APTI is both an NPR and PBS member and APRN is a statewide news network composed of about 24 public radio stations.

At the moment, I’m kind of exhausted from the many conversations and meetings swirling around this change, so I won’t go into much detail now. I’ll stick to the headlines now and try to do a longer explanation this weekend.

First off, I’m now in a new position. A position so new it has a non-traditional title: Vice President, Community Media Streams.

We’re organizing the company in a completely new way, using four divisions:

• Community Media Streams
• Media Production
• Advancement
• Operations

Previously we were arranged into platform and functional units with a total of 8 people at the “management” table, including the CEO. Now our “managers” number only 4. The old breakdown:

• KSKA-FM
• KAKM-TV
• APRN
• Broadcast Engineering
• Information Technology
• Development
• Finance & Administration

Much of this organizational structure stemmed from the two mergers that created APTI as it stands today.  TV and radio uneasily merged in the early 1990′s.  APRN was merged into the company (by necessity, I would contend) in 2004.  Since each merger, the units have largely acted alone — and have competed for resources.

The primary collapse is to bring together radio and television and the web — to date just a subset of my duties — under a single manager (me).  Other public media companies have called this a “Chief Content Officer” or some nomenclature like that. We decided to split what others might call “content” into streams and production because we felt the two were fundamentally different things. Media Production makes programs.  Streams creates experiences.

I’m falling asleep as I write this, so I’m going to stop here.  There’s much more to say, probably this weekend and, really, for months to come. In the mean time, here’s the formal press release (PDF) crafted by our own CEO on Thursday afternoon. It’s intentionally brief and vague.  We have longer docs we’ve been developing internally.

More later. And thanks to all the Twitter pals out there that patiently waited to hear more!

I will have a lot more to say about this, how we got here, where we hope to go with it, and who the key players have been in this multi-year effort to extend public media’s impact in a future post.  PI will continue its current range of services, but it would also be useful to think of it as the beginnings of a new digital division within NPR which will operate with the same culture of neutrality as has characterized public broadcasting’s satellite distribution systems for decades.

That’s encouraging, but vague. Knowing Dennis’ capacity for system design and strategic thinking, I definitely feel better that he’s at the helm, but I sure would like more details on what’s behind the purchase.

In the mean time, I’ve exchanged private Twitter messages and e-mails with a few folks outside and inside NPR. To date, either no one knows what’s going on with the purchase or they’re not willing to say. Very odd. A major purchase like this would, presumably, be backed up with a “big idea” or a plan for the future, and you’d think people would be excited to talk about it.

So I’m still in the camp of “huh?” when it comes to the NPR / PI deal. I’m not against it, but I’m not seeing the value yet. I’m hoping Haarsager in particular can shed some light in the coming weeks.

–

But I’ll be more specific: I’m not interested in more web templating services from PI or any other vendor. They don’t really help me provide valuable, organic, human-scaled interactive experiences for — and with — my community.

My station’s use of any media platform must be authentic and must be “tuned” to the rhythms of the platform and the needs of the community.

So if I’m providing interactive web services, they need to feel organic, natural, part of the web’s fabric and not a “patch.” The PI offerings have, in my experience, felt like patches. They were designed for stations that had no “digital natives” on board and could not or would not invest in next generation services, but still had to have something on the web. A noble goal in its way. Unfortunately, such services encourage stations to treat the web as an afterthought, as a necessary evil, not as a next-gen media platform that operates on a new set of principles.

As tools on their own, the PI services are fine. They work as advertised (which is more than can be said for a lot of software). But they all have the feel of “made somewhere else” and “commodity package we bought just to get this done.” It feels hollow. Ning sites feel more organic.

If NPR bought the PI toolset and services with the idea of just selling them to stations as PI has done since inception, then this deal makes no sense; then it’s just a game: PRI owns it, then NPR owns it, maybe APM is next or PBS or whatever. But if NPR plans to use the skill sets resident in the PI staff to go in some new directions — more like API stuff, less like web templates — then this might make a ton of sense, and it’s a service I’ll want to use.

Too bad NPR already had a smart web services team in-house, unencumbered by the legacy PI business model. NPR could have started in-house with the team they have. Although I suppose buying PI gives you political cover while you develop these services. NPR Board and management can focus on traditional PI operations while substantial behind-the-scenes API / utility development costs are incurred. Maybe the PI purchase is just a new media red cape keeping the old media bulls distracted.

Am I being too cynical here? What am I missing? And when do we think NPR will come out and say what their plans are for the PI purchase?

Because, at face value and based on the PR piece, I’m baffled as to why this is such great news.

The only way this purchase makes sense is if there’s something new NPR is planning that didn’t get described in the press release.

Please, public media blogosphere and Twitterverse, educate me! Can you complete the equation in this post’s title?

Definitely some interesting thoughts delivered by this Corner Gas extra.  Okay, not really… I mean, they are interesting thoughts, but I don’t think he’s been on Corner Gas.

My favorite suggestion is the last — engaging the public in co-creation of public media. Which is a really scary thought for some pubmedia types I know.

By the way, I stumbled across this video because Doug Gordon posted it himself on the new, and growing, DirectCurrent social networking site put up by Current. Thanks Current!

I’ll be posting links mentioned during the live show over at KSKA.ORG.

UPDATE: You can listen to or download the audio from today’s Community Forum program here.

Well, just a few months laster she’s now CEO, as noted on the Etsy site and by Fred Wilson, venture capitalist and blogger extraordinaire.

Congratulations to Maria and Etsy on great news!

It makes me wonder what might have been had the stations and NPR actually agreed to do something in the wake of the New Realities conversations a couple years ago, conversations in which Thomas participated deeply. Had Thomas stayed at NPR, she could have kicked (even more) serious online ass for the network, but instead NPR, via the Board, has signaled the importance of the “R” over all things digital, especially in the BPP cancellation.

–

Someone I bumped into late this week with knowledge of the public radio system commented that the stations need to get out of NPR’s way and let it grow and mature. I couldn’t agree more — and I work at a station, one that ostensibly could be “hurt” by NPR’s evolution. A strong, vibrant, changing NPR would be good for everyone.

Here’s the thing… NPR’s future success cannot come at the expense of local stations if they are truly engaged with their communities. If NPR built direct relationships and funding deals with the public,  that would only cut stations out of the picture if their local community relationships were weaker than the ones NPR could build. If that’s the case — if NPR’s success really would be your station’s death — then just what are you doing in public media anyway?

This is bad for music radio.

Okay, a bit over the top, but stay with me…

When the iPhone 2.0 software came out (which works on the old phones, not just the new sold-out ones), I dutifully downloaded and installed it on my own iPhone. Much of the system was unchanged. But the arrival of the App Store made all the difference, allowing the download and installation of applications that extend the functionality of the iPhone.

Two applications in particular were fascinating, in the context of broadcasting. One was AOL Radio, the other Pandora. Both of these services have existed at least for a few years online. But these are the first examples of full-bodied mobile implementations.

AOL Radio

AOL Radio is pretty simple. It’s direct, live streaming access to the “AOL Radio” channels of music, sort of like satellite radio in that they aren’t local broadcast stations and are organized around tons of musical themes/styles. But it’s also an application that grants streaming access to hundreds of local terrestrial stations in the CBS collection. I can now listen, on the iPhone (with a live WiFi signal) to real-time streams of radio stations from coast to coast.

Since the iPhone goes everywhere with you, and given the near-ubiquity of WiFi signals, I now have hundreds of radio stations in my pocket. Sure, you could manage this before with several workarounds, but this is no workaround — this is a real implementation of a terrestrial transmitter threat that’s easy to use for mere mortals.

But that’s just AOL Radio. Forget that. That’s a threat we can obviate by getting our signals on the iPhone, too (not too hard — it’ll be done soon, I’m sure). Let’s get it on with Pandora.

Pandora

Pandora had interested me before, but only in an intellectual way. Now, presented again on the iPhone for free, I figured I’d try it again. It’s amazing, especially over WiFi. Let me say that again: it’s amazing.

A huge library of songs, all gathered for you with the backing of the Music Genome Project. You pop in a favorite album, artist or song and Pandora generates a complete “station” for you of music from that artist and stuff that’s musically similar to the album/artist/song you’ve identified. And it works.

Let me say that again, too: IT WORKS.

What’s surprising is the sheer speed in which tracks pop down to the iPhone and start playing.  If you skip ahead the next track pops up nearly as fast as your CD player would find something further down the disc platter.  Oh, and the audio quality is easily equal to good FM (over WiFi — less so over 3G or EDGE networks).

I’ve begun discovering music and artists again. I’ve started buying music again. Sunday alone I dropped $30 on new music, buying tracks both from the iTunes Store and from the Amazon MP3 Downloads service.  All $30 were spent on artists I’d never experienced before Pandora suggested them and I bought them using links presented by Pandora.

And get this… if the track or album is available on iTunes, you can buy it wirelessly right on the iPhone, no computer required.

Your own music discoveries can be broad or narrow based on how your “stations” are created and configured (which sounds a lot harder than it really is). And you can combine your stations into mix stations, granting you access to more eclectic recommendations.

Then there are more features on the regular Pandora web site. You can do the same thing via the full web that you do on the iPhone, but there are mild social networking features, extending the recommendation engine further. Plus, for more complex “station” operations, the full web site offers better tools. But it’s all one account, synchronized instantly back and forth as you use the service anywhere.

Why Listen to Music Radio?

Perhaps I’m already past the age where music radio makes sense for me, but I have to wonder what happens to music radio when this kind of access to music is virtually ubiquitous. Remember — the iPhone 3G sold 1 million devices in the first weekend and is sold out nationwide a week later. Pandora is a free service and free application — no advertising, no tricks — and it’s easy to use. (I began to wonder why I bothered syncing music to the iPhone — why not just live on Pandora recommendations alone?)

I’m curious if any music station programmers out there have a take on Pandora they’d like to share. I know there are things you can do with radio that Pandora will never match. And I know the Pandora catalog is limited by the licensing deals they can strike with publishers. But really… if you can listen to “stations” tailored to your preferences and discover new-to-you music in a hyper-efficient way, why turn to terrestrial radio for music at all?

If you’re human-hosting your music, you’d better be doing a better job than the Music Genome Project.

In the meantime, there’s been some great pieces out there I’d like to point folks to (yeah, I know — you already saw these, but just in case…).

First up are two posts from Robert Paterson, a past NPR consultant and an avid BPP audience participant:

• A rescue plan for Bryant Park Project and also for NPR
• A rescue plan for Bryant Park Project and also for NPR – Part 2

I’m not a fan of Paterson’s claim that the U.S. is heading into a full-blown depression (because that scares the bejesus out of me and I don’t know what to do about it), but the rest of it rings true, even if the economy were booming.

Next up is a post from Jeff Jarvis, one of my perennial faves:

• National Public What?

(I love the title — talk about not burying the lede!)

The Jarvis piece is good, but the comments are even better.  When I visited, the first half of the comments were really insightful. And don’t miss Mindy McAdams‘ comment in there, too.

What worries me more and more is that Stephen Hill — that too-smart-for-his-own-good bastard! (and I say that with love) — is going to be proven right if we public media people don’t stop behaving like nitwits and face up to the Innovator’s Dilemma.

I’m not sure whether I have the energy to start my own public media company. Do I really have to?

In the mean time, I just wanted to point to a simple example of how web economics differ so dramatically from traditional radio production and distribution economics. Because my central take is that the BPP could live on in a new web-focused model, one that it’s already primed to utilize. But to survive it would still need some NPR largesse — though less than it’s gotten to date.

The example I offer here is not a direct analog to the BPP situation, but it’s generally illustrative and great for fueling thought about how new media are different from old media. So here’s the post, by former Apple Computer evangelist Guy Kawasaki:

By the Numbers: How I built a Web 2.0, User-Generated Content, Citizen Journalism, Long-Tail, Social Media Site for $12,107.09

Now the $12k figure is a bit hopeful, as the founder himself was not paid for his time. That and other elements make the $12k more fanciful than real, but the point is still valid: it’s not that expensive to start and run a web-based company.

By contrast, NPR reportedly spent about $2 million on the BPP in the last year or so. For public media companies that’s a lot of money. An award-winning 1-hour-per-week radio program in my own shop in Anchorage costs around $350,000 per year to maintain (and we can’t even afford that). $2 million to NPR isn’t that much, but in real terms, it’s a lot.

In a lot of ways, it may have been better had BPP been given only $500,000 to get started.

As pointed out by Ken George in quotes he collected at WBUR’s The ConverStation, the BPP was probably destined to failure if the point was to make a radio-web hybrid. They should have made a web-radio hybrid instead, using web economics as the baseline organizing idea. Web economics scale from small to large. Radio economics, practiced by NPR and others, scale from medium to large only, and often only from large to huge.

Rob Paterson’s got the right ideas. They sound really revolutionary, and I like to think there’s a middle path of some kind where the old ideas and the new ones “can just get along.” But history will likely prove him right and anyone pushing a compromise wrong.

Well, the Bryant Park Project has less than a month left. Literally.

Was it too beautiful to live, perhaps? Hardly. I mean, can anyone really feign shock that well?

Let’s recount the strikes against this endeavor:

• The economic downturn is hitting NPR like everyone else; news budgets are frozen and that’s just the beginning. Like any business looking to cut costs, whoever was hired last will be fired first, whether that’s a show or a person. That’s just the way it goes.
• One of the original hosts (Burbank) — and let’s be honest, the host with real NPR cred — walked away just as the show was getting started. Talk about throwing off the rhythm.
• The second host (Stewart) took off for maternity leave six months into the show. That can’t help.
• Then the news anchor (Martin) left for a cush job at ABC News. (What is it with NPR people leaving a real news operation to go work for a fake news operation? Is it just the money?)
• Plus the fill-in host (Pesca) has been splitting his time between BPP and NPR HQ the whole time.

I’m sure Matt Martinez was busting his ass every day trying to keep things rolling forward, but with a set of facts like these, what can you really do?

Add it up and can you imagine a show — any show in any format — making it to its first birthday without a hell of a lot of buy-in (political and cash) from the top?

But wait — there’s more!

• This was fundamentally a Gen X show inside a Boomer network. What Boomer on the Board of NPR is going to protect a show they don’t air on their station, they don’t listen to and/or they don’t like?
• This show never made it to the bulk of the listeners out there. The only people that knew about it were NPR junkies that took the time to browse the NPR web site, trolling for goodies. More might have liked it but never knew it existed.
• In a risky economic environment, what local station program director is going to broadcast BPP instead of Morning Edition? Show of hands, please… yeah, that’s what I thought.
• Assuming you’re a station with an HD Radio transmitter and you could program BPP onto a secondary channel, great! But who will hear it? Right: no one, because no one has an HD Radio. (BPP could be an Internet success because iPods and computers far outnumber HD Radios.)
• Though BPP was successful on the web (something like 1,000,000 monthly uniques), we must remember that NPR is not a media company, it is a radio company. Arbitron numbers will always be bigger than Google Analytics numbers to a radio company. NPR may be trying to change to meet the challenges/opportunites of the web (and are making huge strides for a company that size), but it’s still a radio entity, so building a show specifically for the web is not a strategic option for them. At least not today.
• Compared to an out-of-the-garage web startup, the cost of producing BPP was astronomical. Sure, web startups in Silicon Valley can devour $2 million at a power lunch, but for NPR and public radio that’s a huge sum, especially given all the other factors noted above. Web startups don’t need that much money, but to do BPP “the NPR way” requires big salaries and budgets. It was a radio economic solution applied to what was essentially a web economic problem — that makes it unsustainable on its face.

All in all, it’s a sad day for NPR. Not so much because it lost a program that was, in truth, faltering from the start, but because the Board appears to have missed a key opportunity here.

NPR could have taken a revised BPP straight to the web and made it the flagship show of a new web-scale innovation unit. BPP could have led NPR into a future not bound by the FCC, Arbitron, legacy stations, transmitters and more. For about $1 million a year they could have jump-started the next stage of their evolution.

I’m beginning to think Gen X and Gen Y need to band together and start their own national public media service — without the parochial split between radio and TV and web. Because PBS kills quality Gen X projects, too. Oh, and Fair Game was axed by PRI recently.

By the way, read the comments on the brief BPP blog post about the cancellation. There’s an audience there, to be sure. And it’s one that could easily sustain a web-based (and web-scaled) program and service. If I had $1 million to invest, I’d definitely put it into this audience.

Pop quiz, hotshot. There’s a bomb on a bus. Once the bus goes 50 miles an hour, the bomb is armed. If it drops below 50, it blows up. What do you do? What do you do?

One of my favorite writers on matters of strategy, especially related to technology application in business, is Bob Lewis, a long-time columnist from InfoWorld and a popular business consultant as well. He writes a weekly column, shared via the web. Great stuff.

This week he wrote a piece (the second in a series) on business strategy: “A business change cornucopicolumn.” And it sounds like he’s talking about my specific public media company in Anchorage and the public media industry in general.

It’s spooky.

Check out this rather heavy quotation (sorry, I just had to) and see if it fits your strategic situation (added boldface is mine):

[Let's] start with a framework for describing any business. It has ten dimensions — five external, five internal.

The external dimensions are:

• Customers: The people who make buying decisions about what the company has to sell.
• Product: What the company sells its customers.
• Price: What the company charges for its products, along with margin goals, contract terms and conditions and so on.
• Marketplace: The business ecosystem — suppliers, distribution channel, competitors and partners.
• Messages: How the business explains itself and its products.

The internal dimensions are:

• People: Employees and contractors — the human [beings] themselves, their skills, knowledge and experience.
• Process: How people do the company’s work.
• Technology: The tools people use when fulfilling their roles in the company’s processes.
• Structure: How the company is organized — its reporting structure, [salary] structure, policies and guidelines, and internal communications.
• Culture: How employees respond to common situations.

In healthy organizations, the ten dimensions are consistent, interconnected, and mutually reinforcing.

Companies don’t undertake strategic change just because one or two are a bit moldy. They undertake it … because the company’s business model no longer works. Perhaps the company’s products are no longer relevant, or the customer segment it serves is shrinking, or its pricing is no longer competitive in its marketplace, or its marketplace has changed in some serious way. It’s fallen behind.

…

Many companies enter a sort of vegetative state in which doing nothing at all becomes the strategy — they pare spending down beyond the minimum, hoping someone buys them before they’re completely [beat]. The alternative, though, is nearly as bad, because there is no such thing as changing just one of the ten dimensions of organizational design.

…

[For example:] Your competitive challenge is pricing. But you can’t change just the price. You need a [better] response than that, because … you’ll lose money on every transaction.

To cut prices while preserving margins you’ll need to change your processes. That means “changing” your people in some way too, because new processes wholly or partially invalidate old skills.

Most likely, you’ll have to change structure and culture as well, and reposition yourself in the marketplace (including, perhaps, bypassing your current distribution channel). All of which will require significant changes in technology.

That’s a lot to change all at once. You have to take an interconnected ten-dimensional model of the business that worked and redesign it into a new interconnected ten-dimensional model of the business that works.

Then you bet the farm, implementing the new organizational design as one massive process. And you don’t get to stop running your business during the change-over.

…[The] company’s executive team decides the basic shape of pricing goals, production strategy (process), and distribution. It also decides on any structural changes that will be required, putting the right people in charge of critical business responsibilities.

And, it will define the underlying cultural changes necessary for everything else to work.

The executive team will focus its attention on the cultural change. The rest of the company will use the 3-1-3-4 formula (3-year vision / 1-year strategy / 3-month goals / 1-week plan) to figure out everything else and make it happen in manageable increments.

Holy shmoly!

I don’t know about your company, but that fits my company, right this second, perfectly.

We’re grappling with these problems all at once:

• Public TV’s audience is dwindling nationally and locally. That reduces advertising (sponsorship!) revenue potential and revenue actuals.
• TV membership dollars are steady, but from a shrinking number of donors (per donor giving is up, total donor count is falling).
• The cost of producing national-quality mass-media-style pubTV programming has risen beyond our ability to do it locally and it’s quickly becoming too expensive to buy it in national packs from PBS.
• The cost of producing lower-end media has collapsed, allowing a flood of programming at the bottom-end of the market, and allowing the “audience” to produce (and consume) their own digital media, without paid gatekeepers like us.
• Our TV fundraising model is based upon transactions with people that don’t usually like us or give us money — we sell them stuff. In so doing, we’ve painted ourselves into a corner: true believers hate us when we grab the money and cut off their favorite programs, yet we need that cash to pay for the true believer programs. When we attempt to raise money around regular programs, they tank, financially.
• Our public radio audience has grown over the past 15 years, but has now flattened and may be starting a long backward slide if we can’t figure out how to grow our audience further or deepen our relationship with the audience we’ve got.
• Our staff is composed almost exclusively of baby boomers and others that built and/or grew up with the public media system. They are approaching retirement and don’t seem to have another “revolution” in them. Internet models are curious, but unproven, for them, and since they largely eschew new media consumption models, they don’t know how to approach them from a business angle.
• Government funding for public media in our state has fallen over the past 15 years. Using inflation-adjusted dollars, funding has dropped by more than 50% in 10 years. Plus, companies successful with fundraising activities are deliberately cut off from state funding. And federal funding has been flat or declining (in inflation-adjusted dollars).
• Our strategic drift has led to an accumulation of drifting employees and a loss of innovating ones. If you’re a striver, a pusher, a mover-and-shaker, if you want to accomplish something, we offer a frustrating environment at best. Our culture says we should wait for a knight in shining armor to come along with bags of money a new and exciting crusade to save us.
• Our product set, as currently deployed, does not compete well enough in a mass market well enough to draw the required revenue, and it doesn’t serve a niche market well enough to garner a rabid following of local support. In web terms, we’re too small to be Google, but too big to be 37signals. (What’s the opposite of a sweet spot?)

I could go on.

Our CEO has repeatedly likened our strategic situation to changing the tires on a bus while driving down the highway at 60 miles per hour. That feels about right.

Personally, I’d like to pull over, get this bus up on a lift and change the tires in a more controlled environment. Then we can get back on the road. But as soon as we drop below 50mph — KABOOM! …the bus explodes, and that’s it for Keanu Reeves and Sandra Bullock.

Which is why Bob Lewis’ 3-1-3-4 formula may be required for us on the mobile pit crew. And it’s why strategies built around a new understanding of the 10 dimensions of business are in order. Clearly, more than 1 or 2 of the 10 dimension have changed:

• Our customers are moving online and expect on-demand access in addition to the streamed services. They also want to interact with us. (Ironically, in a hyper-connected world, they’re more “disconnected” than ever — they need more connection with people like us, people like themselves, people in their neighborhoods.)
• Our marketplace has changed; it’s no longer “3 networks + PBS” and hasn’t been for years. And it’s getting worse as new platforms appear and the audience fractures.
• Pricing models have evolved dramatically as the scarcity economic model dissipates in media markets.
• Our people and processes were selected for legacy customers and markets, not the present day; they need to be retrained technologically and culturally or be replaced.
• Our legacy technology is prohibitively expensive to maintain, doesn’t offer sufficient economic advantage and prevents investment in new technology that would enable new processes and services.
• Our business structures and company cultures are unfocused at best and self-destructive at worst. We focus on “radio” and “TV” and “web” and we promote history over innovation. We need a culture that encourages and develops the best of what our public media “tribe” seeks to experience.

Can we still turn it around? I don’t know. Perhaps in smaller companies with a few lucky lightning strikes of vision and a philanthropic community that supports a positive vision of the future (a vision we must articulate). Or maybe in the largest companies with deeper pockets and tighter links to market forces.

We’re at the cusp of turning it around in Anchorage. Or at least I think so — I hope so. There’s still a great deal of fearless, tireless and perhaps even foolhardy leadership required. We might just have the kernel of what it takes. I think the rest of 2008 will likely set us up for ultimate success or failure. We’ll either get this right quickly or it will likely be too late to recover.

How are you doing with your public media bus?

Recently I’ve told people I know, especially folks I meet via Twitter, that this here blog is really kind of an “inside baseball” thing for public media purveyors or supporters. It’s not a general interest kind of thing. Well, for this post, I’m going to kick up the inside baseball factor a notch…

In the wake of the Ken Stern departure from NPR, the rumblings in D.C. were audible all the way out here in Anchorage (it helps if you have a former NPR staffer working in the next office). Stations across the country were in a tizzy for a few days trying to read the tea leaves — what did it all mean?

Then a few weeks later we heard about the departure of Maria Thomas, NPR’s digital media guru. As one of the chief architects of NPR’s many digital initiatives, her exit fueled speculation that the elimination of Stern was a rebuke of online activities at the company and Thomas left because her days were numbered.

At least that’s the speculation I heard. But I didn’t believe it.

Thomas came to NPR with solid online / e-commerce experience. She did great work at NPR. But I suspected she basically had achieved all she could in a company that, for all its good intentions, cannot move too terribly quickly, given the distributed nature of its goals and relationships. Plus, her work would have gotten her continued attention in web circles. She was likely hit with a job offers repeatedly. 

Today venture capitalist (and uber-blogger) Fred Wilson announced Thomas’ installation as COO of the unique online retailer Etsy.com. While we knew the Etsy part of the story weeks ago, I think the warm welcome she’s being offered tells the real story — that hiring Thomas was a coup for Union Square Ventures and Etsy, not a housecleaning for NPR.

Be sure to check out the introductory video — great stuff. And note what Thomas says when asked why she likes Etsy: “I love that Etsy means connecting with something authentic.” Spoken like the new media veteran she is.

Of course, I could be wrong. Hit me in the comments if I’m missing anything.

Finally, HD is certainly an “upgrade” from the perspective of the broadcaster and the engineer. But is it an “upgrade” from the perspective of the consumer, who already has more choices than they know what to do with — even if they’re not choices which are not under the control of the radio industry? After all, when the Internet is in my car, isn’t HD Radio actually a downgrade?

This reminded me of a recent instance in which I was on the receiving end of a talk from a broadcast engineer about HD Radio. Not an informative one, but, well… a lecturing one.

The lecture? Basically: “Hey, we’ve got this HD Radio stuff installed. When are we going to start broadcasting additional channels? Because, you know, the FCC grants us a license for community service, so we have an obligation to start using HD Radio to serve the community.”

I was floored.

First, the logic was so brazenly absent from this argument. Second, why is engineering directing public service strategy? Third, we are using the HD Radio gear, even if we aren’t multicasting. And finally, well… let’s list all the obvious market reasons that make multicasting a less-than-critical strategic focus:

• virtually no one has HD devices and sales are not increasingly rapidly
• most consumers don’t know about it
• those that do know about it are not really interested
• HD devices are too expensive for most listeners for casual situations
• additional HD channel development requires additional effort (money), even in a heavily automated approach

…and so on, which makes developing additional HD Radio channels at this time an exercise in wasted money and effort for a regularly-strapped public radio provider. We’d be better off focusing on improving our existing services or forging ahead in new media / social media.

Let’s be clear: the HD Radio technology platform is not the mission of public service media (nor is FM radio or AM radio or analog TV or digital TV or web sites or DVDs or CDs or…). HD Radio is a tool.  It’s up to us to figure out when and how it makes sense to employ this tool in fulfilling our public service mission.

And if, down the road, we find that HD Radio was a waste of money, we should have the courage to scrap it and move on.

They’ve posted all the details here.

If it’s not already in your RSS reader or list of sites to review regularly, be sure to get it in there.  The FCC, under the direction of telco-loving politico Kevin Martin, has been very busy in the last year proposing new rules on all kinds of stuff related to broadcasters.  And it’s not little niggling things — this is big stuff that will impact operating costs, reporting activities and more.

Naturally, you should consult with your own attorney before embarking on any changes or new plans, but this is sound coverage of FCC changes and how they relate to broadcasters.

Talk about required reading…

I actually came away from this profile liking Ken Stern quite a bit. Did he fit well into the CEO slot? Perhaps not. But he did some great work for NPR. And to everyone’s credit — except a sour-grapes Bob Edwards — the comments from board members and others were incredibly even-handed.

In a blog post this weekend, Laporte describes several changes he’s bringing to the core show, centered on live video streaming. I’m recommending the post because he describes both some Media 1.0 troubles he’s had lately and then describes the changes he’s about to make in his Media 2.0 company.

Why should public media folks care?

Because Laporte is doing what many of us in public media are not, and his strategy is especially well-suited to the Media 2.0 economy:

• he’s engaging with his community in a two-way and multi-way fashion that’s meaningful, open and authentic
• he’s increasing his real-time contact hours across multiple digital platforms (he doesn’t limit himself to one platform)
• he’s doing it all himself, on the cheap — there’s no network or corporation pushing him forward or holding him back

Laporte’s example is inspiring. Imagine what a public service media company with a true local engagement mission could do, using similar methods and the same low-cost, low-risk, rapidly-developing technologies. Engaging your community, communicating with your “true fans” is not a matter of holding public meetings or taking pledge calls. I’m hoping to steal some of this TWiT model for use in my shop (assuming we can get past our difficult strategic planning process).

But we’d better move fast.

Because in a world where Content is a commodity with a value approaching zero (or as Robert Paterson described content recently: noise), all we have left is Contact and Context. PBS and NPR can provide content on a national scale and with unrivaled quality. They can even distribute it and gather financial support for it directly. So we, the locals, must do what they cannot: provide authentic contact and develop a contextual service in tune with our local communities.

Take a look again at Laporte’s example. He’s building out in service of his “tribe,” his community. He’s co-creating value with volunteers in his “TWiT army.” He’s using two-way platforms authentically. He’s got real-time contact with his audience. He’s doing it without transmitters or other oppressively heavy engineering costs. We should be so lucky.

We can be so lucky.

Worth a listen, especially if you’re a little confused about how public radio and public TV can engage the world in an online context.

Total time: about 51 minutes. Download the MP3 here.

(By the way, I’d link to the web page at KCUR, but it appears it won’t be available after this week due to the way it’s published using the Public Interactive CMS.)

Godin talks a lot about tending to your “tribe” — that group of people that love your product/service and who share your values or perspectives and interests. If you’ve been in public radio or TV for any length of time, you know these folks. Most likely you’re already a member of this tribe yourself.

Recently Godin gave a talk at a music conference and his comments, while aimed at a music marketing audience, are applicable to all of us in public media — news, music, radio, TV, whatever — because the trends affecting the music business (disastrously) today are the same ones rewriting the rules for all media. And the rules for success in the next generation will be the same: serve your tribe; be indispensible; be the best.

Here are some highlights from Godin’s talk, pointed out by Gerd Leonhard and partially chosen by digitalwaveriding (the boldface highlights are mine):

… if I asked you for the name and address of your 50,000 best customers, could you give it to me? Do you have any clue? [No?] Then what happens every day is you go to a singles bar and you walk up to the first person you meet and propose marriage and if that person won’t marry you, you walk down the bar to every single person until someone says “I do.” That’s a stupid way to get married. A better way to get married is to go on a date. If it goes well, go on another date. Wait to tell them on the third before you tell them you’re out on parole. Then you meet their parents, they me your parents, you get engage, you get married. Permission is the act of delivery. Anticipated, personal and relevant messages to people who want to get them.

… The next thing is what I call the Seinfeld curve. The Seinfeld curve shows us Jerry’s life. If you like Jerry Seinfeld you can watch him on television, for free, in any city in the world two or three times a day. Or, you could pay $200 to go see him in Vegas. But there is no $4 option for Jerry Seinfeld. This is death. You can’t make any money in here. Because if you’re not scarce I’m not going to pay for it because I can get it for free. And one of the realities that the music industry is going to have to accept is this curve now exists for you. That for everybody under eighteen years old, it’s either free or it’s something I really want and I’m willing to pay for it. There is nothing in the center — it’s going away really fast.

… The next thing is this idea that people care very much about who is sitting next to them at the concert. They care very much about the secret handshake. They care very much about the tribal identification. “Oh you like them? I like them!”

… It’s really important to people to feel like they are part of that tribe, to feel that adrenaline. We are willing to pay money, we’re willing to go through huge hoops, trampled to death in Cincinnati if necessary, in order to be in the environment where we feel that’s going on.

… I want to argue that the next model is tribal management. That the next model is to say, what you do for a living is manage a tribe, many tribes, silos of tribes. That your job is to make the people in that tribe delighted to know each other and trust you to go find music for them.

… There is a lot of music I like. There is not so much music I love. They didn’t call the show, “I Like Lucy,” they called it “I Love Lucy.” And the reason is you only talk about stuff you love, you only spread stuff you love. You find a band you really love, you’re forcing the CD on other people, “You gotta hear this!” We gotta stop making music people like. There is an infinite amount of music people like. No one will ever go out of the way to hear, to pay for, music they like.

Fortunately or unfortunately, the future for public media companies will involve considerable “tribe management” and will involve a smaller audience than we have today, either locally or collectively — all media will have far more fragmented communities than in the past. Now is the time to identify who’s in and who’s out of your tribe and figure out how best to serve the community that gathers around public media content and values.

This may sound elitist or even fatalistic to the traditional mass media thinkers out there: “But I want the biggest audience possible!” Well, you can’t have it. Large audiences of mildly engaged viewers or listeners or readers are the old model. The new model requires deep and authentic engagement with that “tribe” of people. You can still invite everyone into the tribe, and you should. But in a world of infinite tribes, folks will naturally gravitate to the tribes that best serve their needs and interests (and they will have multiple tribes, of course).

Personally, I think this is an incredibly exciting time for public media folks that embrace this new approach. There’s new opportunity not only for sustainable businesses, but for truly meaningful, impactful and interactive work. The only problem is developing the courage to let mass media thinking fade over time, even though it’s been tremendously successful for the last 40 years.