Tag: radio

NPR CEO on towers, revenue and news collaboration

NPR CEO Vivian Schiller appeared at the All Things D conference this week and made some waves. I know John Sutton noticed something she said and didn’t like it. And I was puzzled by it. But let’s be fair — there were several issues she covered while talking with Kara Swisher. A complete liveblog-style capture is here.

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.

Digital media reaches a 'tipping point'

Digital media consumption has reached a tipping point; more average consumers are discovering all sorts of cool ways to get their media fix. And with radio’s final bastion – the car – quickly being penetrated by Internet radio and devices that make it easy to consume, traditional radio could have an uphill battle in 2011.

Bridge Ratings will soon publish its revenue projections for 2011 and the forecast is not as rosy as 2010.

2009 revenue was down 18%.

2010 traditional radio revenue will be up 4%.

2011 revenue will be down 2%.

via Navigate the Future

I just bought a new car stereo a few months ago. I can hook up an iPod or iPhone no problem. Or any kind of USB memory device with audio on it. HD Radio was an expensive add-on option. Satellite radio was as well (not to mention the subscription fee).

So far, wireless data plans for cars or other non-phone mobile use still relatively rare, expensive and don’t really travel all that well due to variable coverage.

But give it 5 years. I’ll buy a new media and data center for the car by then, I’m sure of it.

MacBreak Weekly explores NPR/station disintermediation

On each MacBreak Weekly — a podcast focusing on all things Mac (and iPhone / iPod) — the host and guests make “picks of the week” in which they highlight hardware or software from every imaginable corner of the Mac and iPhone universe. Some stuff is small, some stuff is big, some is expensive and some is free. This week one of the guests — Alex Lindsay, a videography and special effects pro — picked the tremendously popular NPR News iPhone app (currently #4 in the free News apps category in the iTunes App Store).

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).

Podcasting tools guide

Dan Benjamin has updated his Podcasting Equipment Guide for 2009 and it’s a must-read for anyone wishing to do audio production work from home or office, without having to setup a complex studio.

This post, combined with the tools section at Transom, can get anyone recording with good quality for distribution online or even on air.

Broadcasting stocks? Sell, Sell, Sell!

Caddyshack, a favorite movie from my teen and college years (oh, who am I kidding — it still cracks me up!) includes a scene with the late Rodney Dangerfield in which he’s on the phone with his stock broker. Dangerfield plays an obnoxious nouveau riche land developer by the name of Al Czervik.

Excitedly Czervik shouts into the phone: “Buy, buy, buy!” and after a pause to listen, “They’re all buying? Then sell, sell, sell!”

That last piece of advice now appears to apply to stocks in the broadcasting sector, according to a report in BusinessWeek, which includes this ominous quote:

Meanwhile, traditional broadcasters will probably remain challenged by secular factors such as audience fragmentation, as advertisers shift more spending to the Internet and other new media platforms, Amobi says. A terrestrial radio recovery could be impeded by a continued supply and demand imbalance, while the satellite radio companies have also seen anemic retail sales, even as they await a likely imminent regulatory decision on their pending merger proposal. However, TV advertising offers a bright spot, in our view, with a relatively strong 2007-08 upfront and scatter market for the networks, and a specter of record political dollars for local stations with the upcoming Presidential elections.

To be fair, this isn’t exactly breaking news. Audience fragmentation has been the hallmark of the 21st century as media outlets and platforms proliferate and the old media companies actually accelerate their decline by reflexively going for ratings with sensationalist and over-commercialized programming.

And on the matter of TV advertising, what happens after the 2008 election cycle? That’s not a pretty picture, even if it does come in HD.

iBiquity: How a closed-source model is killing HD Radio


Chart created by Bridge Ratings (2006). Click for a larger version.

Last week on the PUBRADIO mailing list, the topic of HD Radio came up again. Commenters went one way, then another — all talking about programming and broadcasting as they usually do. Technology didn’t really enter into the equation, yet it’s one of the core issues in terms of consumer adoption patterns.

Why is HD Radio failing to catch on? Lots of reasons easily come to mind:

  • Broadcast audio streams aren’t something new — it’s called Radio and we’ve had it for 100 years; why bother to get a new radio when the old one works fine?
  • The higher quality audio possible with HD Radio is nice, but in most listening situations (cheap radios, cars in traffic, noisy offices) the improvement over analog FM is negligible
  • Multichannel service really hasn’t arrived at most HD-capable stations so far
  • While HD Radio signals are less prone to some types of interference, real-world experience suggests it’s a generally weaker signal, especially if you’re comparing devices with internal antennas (clock radios)
  • Though most consumers don’t know it, there are software revisions appearing with HD Radio right now, and most radios are not field-upgradable — it’s not “safe” to invest big bucks in receivers yet
  • Satellite radio has blunted the multichannel argument and still offers less commercialism than an HD Radio multichannel service would (admittedly, you have to pay for sat radio, but many are willing to do so)
  • Internet audio streams have a bigger audience already and are growing faster than all other streamed audio services

Continue reading “iBiquity: How a closed-source model is killing HD Radio” →