Station Resource Group... in a time of radical change PRIMA September 2006

Station Resource Group

. . . in a time of radical change

PRIMA September 2006

Station Resource Group

This presentation was developed by Tom Thomas and Terry Clifford, co-CEOs of the Station Resource Group and presented at the September 2006 meeting of Public Radio in Mid-America (PRIMA)

Station Resource Group6935 Laurel Ave., Takoma Park, MD 20912301.270.2617www.srg.orgtthomas@srg.org and tclifford@srg.org

Copyright © 2006 Station Resource Group

Station Resource Group

. . . a time of radical change

The public media organizations formerly known as stations

Using technologies no longer limited to radio

Serving individuals formerly known as the audience.

Station Resource Group

. . . a time of radical change

• Disruption– Technologies– Markets and economies– Political environment– Culture

“The house is on fire.”John Barth, PRX

Station Resource Group

. . . a time of radical change

• Destabilization of self-perception– Expectations– Relationships

“NPR wants to sleep with other people.” New Realities Forum

Station Resource Group

We are encountering some turbulence.

Station Resource Group

Loyalty in listening

• Of listeners in a given station’s weekly cumulative audience who are listening to the radio, what percentage are tuned to that station at any given time

Station Resource Group

Radio OffRadio Off

Loyalty: How Well a StationServes Its Own Audience

Station Resource Group

Radio OffRadio Off

Loyalty: How Well a StationServes Its Own Audience

WXYZ

Station Resource Group

Radio OffRadio Off

Loyalty: How Well a StationServes Its Own Audience

WXYZ

41% of 41% of ListeningListening

Station Resource Group

Loyalty in listening

• We have been gaining listening at other stations’ expense for years

• Now they are gaining listeners from us

Station Resource GroupSource: Audience 2010

Loyalty of Public Radio’s Listeners(Percent of all Listener-Hours to Radio per Year)

Public Radio’s Arbitron Diary Database

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

to Other FMs

to Other AMs

to Public Radio Stations

to XM & Sirius Channels

Station Resource GroupSource: Audience 2010

0

5

10

15

20

25

30

35

40

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Network Music

Local Music

Local News-Information-Entertainment

Network News-Information-Entertainment

Loyalty to Public Radio ProgrammingPublic Radio’s Arbitron Diary Database

Station Resource Group

Loyalty in listening

• When you lose share, it doesn’t disappear

• What did they do to get better?• Did we do something to get worse?

Station Resource Group

Problems at the core

• Almost all the recent loss in listening was by core listeners

• The two programs in which public radio invests the most – Morning Edition and All Things Considered – lost 81 million listener hours from 2004 to 2005; that’s 30% of the total

Station Resource Group

An inconvenient truth

• Almost all the recent loss in listening was by core listeners

• The two programs in which public radio invests the most – Morning Edition and All Things Considered – lost 81 million listener hours from 2004 to 2005; that’s 30% of the total

Station Resource Group

Loyalty in giving

• Change in listening loyalty is echoed in giving

• Among 58 stations using Target Analysis, renewal of support down in every category– format, original source of gift, years of

giving, amount of last gift

Station Resource Group

Station Resource Group

Station Resource Group

Still moving forward financially

• Listener support reached its highest level ever in FY 2005– 2% increase in net listener support after

adjusting for inflation– Net per listener hour at all time high, up

4% from 2004– Cost of raising a dollar up a penny to 35¢

Station Resource Group

0

50

100

150

200

250

300

Mill

ions

96 97 98 99 00 01 02 03 04 05

Public Radio's Listener SupportAdjusted for Inflation (2005 Dollars)

Source: CPB: Annual Financial Reports Station Resource Group

Station Resource Group

0

20

40

60

80

100

Mill

ions

96 97 98 99 00 01 02 03 04 05

Individual fundraising

Underwriting and grants

Public Radio's Development ExpensesAdjusted for Inflation (2005 Dollars)

Source: CPB: Annual Financial Reports Station Resource Group

Station Resource Group

0

50

100

150

200

250

300

Mill

ions

96 97 98 99 00 01 02 03 04 05

Gross

Net

Public Radio's Net Listener SupportAdjusted for Inflation (2005 Dollars)

Source: CPB: Annual Financial Reports Station Resource Group

Station Resource Group

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

Cent

s

96 97 98 99 00 01 02 03 04 05

Public Radio's Net Listener Support per Listener HourAdjusted for Inflation (2005 Dollars)

Source: CPB: Annual Financial Reports, Arbitron Spring Nationwide, RRCStation Resource Group

Station Resource Group

Still moving forward financially

• Underwriting up significantly– Net revenue grew by 9%– Cost of fundraising held steady– Net per listener hour up 11%, closing in on

2000 “boom” record

Station Resource Group

0

25

50

75

100

125

150

175

Mill

ions

96 97 98 99 00 01 02 03 04 05

Gross

Net

Public Radio's Net Underwriting SupportAfter Cost of Fundraising, Adjusted for Inflation (2005 Dollars)

Source: CPB: Annual Financial Reports Station Resource Group

Station Resource Group

0

0.2

0.4

0.6

0.8

1

1.2

Cent

s

96 97 98 99 00 01 02 03 04 05

Net Underwriting Support per Listener HourAfter Cost of Fundraising, Adjusted for Inflation (2005 Dollars)

Source: CPB: Annual Financial Reports, Arbitron Spring Nationwide, RRCStation Resource Group

Station Resource Group

0

50

100

150

200

250

300

Mill

ions

96 97 98 99 00 01 02 03 04 05

Underwriting

Listener Support

Net Listener Support and UnderwritingAfter Cost of Fundraising, Adjusted for Inflation (2005 Dollars)

Source: CPB: Annual Financial Reports, Arbitron Nationwide Station Resource Group

Station Resource Group

0

4

8

12

16

20

24

Mill

ions

0%

2%

4%

6%

8%

10%

12%

97 98 99 00 01 02 03 04 05

Amount Percent

Change in Net Listener Support and UnderwritingAfter Cost of Fundraising, Adjusted for Inflation (2005 Dollars)

Source: CPB: Annual Financial Reports Station Resource Group

Station Resource Group

The evolving mix

• Community-based fundraising led our growth as institutional and governmental support stayed flat or sagged.

• Larger gifts are making up for lower renewals.

• Rapid growth in underwriting accounts for most of the new dollars.

Station Resource Group

0

2

4

6

8

10

Mill

ions

99 00 01 02 03 04 05

Public Radio's Major Gift SupportAfter Cost of Fundraising, Adjusted for Inflation (2005 Dollars)

Source: CPB: Annual Financial Reports Station Resource Group

Station Resource Group

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

Cent

s

99 00 01 02 03 04

All CPB Stations

AAA (4)

Classical (18)

Jazz (18)

News (27)

Net Listener Support per Listener HourAdjusted for Inflation (2004 Dollars)

Station Resource GroupSource: CPB: Annual Financial Reports

Station Resource Group

0.0

0.2

0.4

0.6

0.8

1.0

1.2

1.4

1.6

1.8

2.0

Cent

s

99 00 01 02 03 04

All CPB Stations

AAA (4)

Classical (18)

Jazz (18)

News (27)

Net Underwriting per Listener HourAdjusted for Inflation (2004 Dollars)

Station Resource GroupSource: CPB: Annual Financial Reports

Station Resource Group

Speaking of an evolving mix . . .

• True of false: “Baby Boomers are the heart of the public radio audience.”

• True or false: Public radio has a graying audience and fails to reach younger listeners.

• Fact: GenXs and GenYs are public radio’s fastest growing segment and are likely to be the largest portion of our audience within five years.

Station Resource GroupSource: Audience 2010

0

2

4

6

8

10

12

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Silents

Boomers Gens X&Y

Matures

Public Radio Listeners(Cume Persons per Week, in Millions)Public Radio’s Arbitron Diary Database

Station Resource GroupSource: Audience 2010

0%

10%

20%

30%

40%

50%

60%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005

Silents

Baby Boomers

Generations X&Y

Matures

Loyalty to Public RadioPublic Radio’s Arbitron Diary Database

Station Resource Group

Placing bets on the future

• Multiple initiatives for which both service outcomes and sustainability are unclear– HD radio– Digital distribution– Local news and information

• Overall capacity• Nature of the news (i.e. Public Insight

Journalism)

Station Resource Group

Strategic choices

• Long-term position as public media institutions

• Preserving and growing the substantial investments that don’t come from listener support and underwriting

• Distinctive identity and close connection to community will eventually pay off in public support

Station Resource Group

Where We Are Going

Significant institutions with important and expanding roles in the civic and cultural lives of

our communities

Station Resource Group

Enduring power of broadcast

• Core of service for years to come– Universal free access – Tens of millions in the audience– More service than all other audio channels

put together– Economic engine of the field– Connection to communities– Infrastructure already in place

Station Resource Group

Build on broadcast assets

• Discipline and focus to preserve and strengthen performance of the current system

• Opportunities for growth across all measures: stations, audience, support, and trust

Station Resource Group

Embrace the new

• Integrate broadcast with an array of emerging platforms and channels to deepen and broaden our services and our communities of users– More content – More user control– More interaction with and among

individuals and groups– More connections to communities

Station Resource Group

“Push” and “Pull”

• Expanding bandwidth, computer power, storage, and connectivity support an expanding portfolio of services

• Push: one-to-many driven by the presenter

• Pull: many-to-one driven by the user• Not either/or – it’s both

Station Resource Group

A larger role

• Strategic position: trusted and sophisticated producers, selectors, and context setters for content of high quality and depth

• Build out capacities as authenticators and recommenders in an interactive community

• Leverage trust and reach to convene on the civic and cultural issues and interests of our time

Station Resource Group

BroadcastingBroadcastingAM FMAM FM

More “Push”More “Push”Streaming Satellite HDStreaming Satellite HD

““Pull”Pull”Archives DownloadsArchives Downloads

Podcasts SearchPodcasts Search

Authenticate & Authenticate & RecommendRecommend

Connect & Connect & Convene Convene

Core Core FranchiseFranchise

TrustTrustCreate & Create & PresentPresent

Station Resource Group

. . . in a time of radical change

PRIMA September 2006