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 [email protected] and [email protected]
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