The Future of Public Media

Traditional media outlets still struggle to garner financial support from their increasingly fragmented audience. How is public media giant NPR excelling in the face of digital publishing?

While the rest of the traditional news media is fighting to hold on to an increasingly fragmented audience, NPR is the only legacy organization experiencing audience growth. Public radio now draws nearly 34 million listeners a week. At the same time, like other media outlets, we’re pushing like crazy to connect with listeners who are looking for news in new places and on new platforms. We’re committed to our radio core and to building a second core in digital. In doing so, we are finding that we’re expanding our total audience. Mobile is turning out to be a huge growth engine for us: We’re getting more than 20,000 page views a month and that’s excluding iPad users, one in five of whom have already downloaded our app.

And so, we public media types are on to something that resonates with audiences. But what is it, and what lessons can be drawn from it?

First, it’s our legacy.
NPR was created in 1970 when the high costs associated with TV and radio were driving commercial broadcasters away from public service. And so public broadcasting was established in large part to fill that gap. As the 1977 Carnegie Commission observed, “Commercial broadcasting’s entire output is defined by an imperative need to reach mass audiences in order to sell products.” (And, it might be added, to create shareholder value.)

This is not to denigrate the role of commercial media. In those early years, the news operations of the big three commercial broadcasters were still deeper and more expert than anything public broadcasting would offer for years to come. But there’s no question that certain kinds of content were more likely to flourish in a commercial environment, and and that that content might not fully satisfy the news and information needs of a diverse nation.

Fast forward to today.
Technology has lowered the barriers to entry and dramatically reduced costs. So you might ask, “Why there is still the need for publicly supported media when everyone with a laptop or a mobile device can be their own publishers?”

Look deeper. Now that everyone has their own “printing press,” the hundreds of millions of pages of digital news and information that flood the marketplace each year further fragment the audience and drive down the price marketers are willing to pay. As advertising becomes unbundled from the news, news organizations can no longer earn the revenues that used to come from amassing a very large audience. This compels commercial outlets to offer programming that earns the highest possible return—and sometimes caters to the lowest common denominator.

For evidence, just look at the opinion-mongering that blankets much of cable news. Or the decision of some newspaper companies to install general managers over news operations, so the content they produce can be more closely aligned with the needs of advertisers. Or the creation of companies like Demand Media, whose sole purpose is to generate mass audience at the lowest possible cost.

Perhaps the digital transformation that has so disrupted legacy media will ultimately yield a more open, transparent, and informed society. But in the short run there’s little reason to think that commercial media alone will be able to make up for the loss of original reporting that we’ve suffered in the past several years.

As a result, the conditions that created the need for public media are even more present today than they were in 1967.

There’s a second natural advantage to public media: a diversified business model.
The secular decline in newspapers’ dual revenue streams of advertising and circulation has been well documented. Ditto the business model for broadcast news. According to the Project for Excellence in Journalism (PEJ), only the dual revenue streams of cable news continue to hold up, as subscriber fees from cable operators make up for losses in advertising revenue.

Public media, however, has five significant revenue streams, which cushion us from the blow to any individual source (as we experienced with sponsorship in 2008 and 2009). They are:

Membership. Listener support of stations accounts for $300 million a year across the system, with numbers of new members steadily climbing. This is not dissimilar to subscription fees for newspapers, with one important difference: it’s voluntary. Anyone who cannot or will not pay still has access to our content.

Sponsorship. Corporate messaging has long been a key component of NPR and station revenue. National sponsorship was down during the economic crisis, but now it’s on the rebound. Marketers are increasingly attracted to the powerful brand, loyal audience, and uncluttered environment of NPR.

Foundations. From the earliest days of public radio, we have relied on vital funding from foundations such as Ford, Knight, MacArthur, Carnegie, Pew, and others. Today, new philanthropic organizations like Open Society Institute, the Gates Foundation, Atlantic Philanthropies, and Omidyar recognize the precarious nature of commercial media and are joining those legacy institutions to fund all manner of public media institutions.

Individual Philanthropy. NPR was famously the beneficiary of a bequest from Joan B. Kroc, who left us an endowment north of $200 million. But her act of generosity was no sui generis. Throughout the country, individual philanthropists including Warren Hellman, John Thornton, and Irwin Jacobs are funding public media institutions in their communities.

And then there’s government support. We’ll get to that in a moment.

The point is, with five sources from which to draw support, NPR and public radio are not dependent on the fate of any single source of income. When one is down, we take the hit but keep moving.

Furthermore, our revenue carries over to new platforms. We’re finding that our presence on new devices is not so much supplanting our traditional audience as it is extending our reach and deepening audience engagement. That makes us optimistic that all of these traditional sources of revenue—including listener support—will carry over in large part, or even entirely, as public radio stations expand the digital delivery of their content.

The third reason that public media may be part of the solution: We have the support of the American people.
The American public—both individually and through federal, state, and university funding—has made an enormous, sustained investment in public media, and that now represents a valuable public asset.

There are public broadcast stations in every city and small town in America. They have bricks and mortar, dedicated staff, and an unwavering commitment to serve their communities. Public radio stations in all fifty states share a profound, even intimate, connection with local audiences whose very contributions, even if only at the $5 level, encourage the audience to feel part of the collective. In many places, the local public radio stations are the only owned and operated news organizations in the community. That gives us a special advantage—and a unique responsibility—to serve.

That intangible capital must be leveraged, not squandered. As guardians of a public trust, we have an obligation to see that 40 years of investment in public media is deployed to address the current crisis in journalism and does not simply fall victim to the turbulence of the times.

This is not just about protecting the existing players or just about NPR. It’s about all of public media. We must—we are—looking for opportunities to partner with new entrants who share our commitment to quality and public service. They include award-winning new news organizations like Bay Citizen, Voice of San Diego, the St. Louis Beacon, the Texas Tribune, and the spectacular ProPublica, among others.

And we must find ways to extend our infrastructure to these new players. Open source technologies and back-end networks are paving the way.

It is for these reasons and others that no less a stalwart than Len Downey has embraced public media as a potential solution to the news deficit. And while opinion on that front is certainly mixed, he’s hardly alone.

But the question remains: Is all of this enough?

As the PEJ report observed, “The energy and promise here cannot escape the question of resources. Unless some system of financing the production of content is developed, it is difficult to see how reportorial journalism will not continue to shrink, regardless of the potential tools offered by technology.”

US government support for public media is very modest by world standards. According to a Knight Commission report, Canada spends more than $22 per capita for public media. England invests over $88 a citizen. The US? One dollar and 35 cents.

That buck-and-change doesn’t go very far. Public radio stations receive less than 6 percent of their funding from federal, state, and local governments. Most people are surprised how little of NPR’s budget comes from the government, which is less than 3 percent.

I’m as big a believer as any about the firewall between the business and editorial side of news organizations. But I’ve come around to believing pubic funding is an essential and long-standing tradition in this country, even without BBC-style taxes on TV sets—and should be increased. The federal government must step up in creating the conditions for this essential tool of democracy to survive and thrive.

So, as the PEJ report asks, “Now what?” For us in public media that “now what” takes several forms:

Continue our mission to serve the information needs of communities.

Partner with one another and with the new entrants who share our journalistic values.

Sharing and networking. We’re beginning work on a Public Media Platform whereby content from NPR, local public radio stations, and other providers can be made available in an open source architecture so that everyone can access it. That includes software developers around the world who will use our content and data to create new ways of creating and sharing information beyond our wildest imagination.

Innovate and spur innovation. Both in the way we report and deliver the news, but also in the ways we fund it. Social media expert and author Clay Shirky asks, “If the old model is broken, what will work in its place?” The answer, he says, is: “Nothing will work, but everything might.”

As Ken Doctor notes in Newsonomics, “In a war of Darwinian content, it’s not just the best content that will win. …News producing companies that adapt best and quickest will win. Certainly journalistic quality has something to do with those prospects. As important though, is how well the news companies creating the content have adapted to the ways of the Web.”

As the ranks of journalists in commercial media shrink, self-interested information providers expand, and marketers and other non-journalists become publishers, the need to create honest, unbiased, thoughtful journalism increases.

Our mandate to meet this need is clear, and our mission has only grown more vital in our almost 40 years. Look at the media you consume in the next 24 hours and predict its future. Will that news source be here in the next 5 years? The next 50 years?.

Vivian Schiller is the president and CEO of NPR. Schiller leads NPR’s worldwide media operations, including the organization’s partnerships with a network of more than 900 public radio stations. Together the stations reach nearly 30 million listeners.

The Meaning of Business

About

In light of the economic crisis, companies have a historic opportunity to transform the way they do business and provide customers with more value-rich, sustainable, and meaningful products and services. With this special series on “The Meaning of Business,” design mind invites business leaders from various industries and disciplines to explore new, innovative models of value creation.

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