Is public radio on the cusp of expansion or disruption? PRX CEO Jake Shapiro and Current.org‘s Mark Fuerst talked about listenership and public radio funding models on the PRX couch.
From crowdfunding trends to historical comparisons between public television and public radio—some of their observations might surprise you. Listen here, or read the transcript below.
Jake Shapiro: I’m really excited to be sitting down on our couch with Mark Fuerst, who is the director of the Public Media Futures Forum and former executive director of the Integrated Media Association, and a longstanding public media maven, researcher, occasional provocateur.
We’re talking about taking a fresh look at the public media/public radio audience opportunity for this moment we’re in, which still feels like a shift, in a way. We’ve been thinking a lot about that at PRX, around how to help producers navigate their way towards new audiences and their habits of consuming and supporting the media that they love.
I think you were saying that you see some historical comparisons in public television two decades ago.
Mark Fuerst: One of my jobs is to call people and ask them what they’re thinking about in terms of making investments at their stations or working with networks. I think it’s widely shared in the industry that we’ve lost a bit of track of what people are actually using. And some of that is podcasts, because asynchronous use of audio is very hard to track.
There’s also the problem of when people move across platforms, there’s no continuous way right now to look at a person who might in the morning listen to Morning Edition, during the day listen to downloaded audio, come back and listen for a few minutes in a car on the way home, but maybe listen to something totally different in the evening.
The reason why that’s so important is that the more people use public radio the more they are likely to support it, and individual contributions are the largest factor in the business model.
JS: And how big is that business model? Can you talk a little bit about just the sort of sizing of the public radio economy?
MF: I don’t remember what the total number, Jake, for the whole economy is; it’s more than a billion dollars right now. The individual giving sector is 350 million, 360 million dollars and has been growing fairly steadily.
JS: And I think you said there are about 3 million givers?
MF: Just slightly under 3 million I think. So there are about 3 million people contributing, it’s the highest it’s ever been.
What’s happened now is that across the system, there is a topping off, there’s another leveling we’re hitting where the number of people who are contributing, it’s not going down but it’s not growing very much, but the amount of people are contributing is going up because of sustainer programs—most people listening to this going to know what that means—and huge growth in major giving.
So the question really becomes, of the younger people entering the public radio, audio world—can we bring those people into the same relationship of appreciation support that so many people have developed over the last 30 years? And we don’t really know because we don’t actually even know what they’re doing.
We know when they listen to radio station, because Nielsen or Arbitron is going to measure that in some way. But when they move to other use forms—going to website, or listening to downloaded audio—we don’t know what they, we don’t know what they really value. That’s a hugely important piece of information.
I found information in the spring that showed that the peak of donations to public television occurs in 1993 at 5 million members. It had been growing in the previous decades. And then it begins to decline, so that from 1993 until now its been reduced from from 5 million members to 3 million members, almost the same now in public television and radio. And what I was asking myself when I saw that was, what happened in 1993? Why does that occur?
And my hypothesis is that this is related to the explosion of delivery capacity. Because that year literally is the beginning of digital cable. We go from analog cable systems that would deliver 70 radio channels to digital cable systems that delivered 500 channels.
We seem to be in the same moment. The advent of the phone as an audio device as opposed to something that you use to talk to people, that seems to me to be somewhat similar to the expansion of analog to digital cable.
And what I’ve been asking my colleagues is are we seeing something like that happen now with membership? Because what happens is you don’t originally begin to see your membership money go down, your individual giving, because you’ll figure ways to get people to give more and more. But the group of donors begins to contract.
Well, I don’t think we’ve seen contraction yet. There’s a flattening. So the question really now becomes how to take the people who appreciate public media and serve them in new ways and keep them appreciative enough to donate as they make their own transition to new usage patterns.
JS: It’s a fascinating hypothesis which I hope is born out by further research.
It illuminates all kinds of other ways to think about that lost opportunity in 1993—how public television managed that transition—and then what that might say for the opportunity have now.
In the last 10 years, which is the arc of PRX’s own evolution, there were a bunch of false starts sensing that that moment had come. Whether it was XM satellite radio being this kind of “is that the cable television of radio that’ll change the game?” No it didn’t really, partly because adoption didn’t happen fast enough.
Podcasting, when it first emerged, seemed like that was going to be this huge democratization of distribution, of expression, and that actually really flattened out and never took off for a good six, seven, eight years—until the mobile platform has transformed because of its huge penetration, because of its ability to a consumption, distribution and production device.
That has some interesting parallels, but also huge differences in that it’s not sort of top-down controlled, major players who only are the ones through cable channels that you have to lobby to get programming approval or massive investment in order to even mount the kind of content creation that you’d think for that.
So where PRX is sitting, we see this as part of our challenge with public radio. Within that universe, where do you see PRX’s opportunity to help navigate this?
MF: First of all I think you’ve already established yourself as a center of independence, meaning independent thinking but also independent producers. Attracting a lot of talent. We were discussing this over lunch. PRX has a character that is different than the built-in system of public broadcasting.
The built system of public broadcasting is a geographically based system. PRX is not. The digital world is not a geographically based system. So that there’s universal reach to almost every single producer.
So for PRX, I think you’re positioned to begin to look at how do you take talent and give them the support—some of it’s going to be coaching around making great programs, but some of it’s also going to be technical support, marketing, delivery capacity—to reach people.
And 99% Invisible is a great example you’re using. The audience for people who are really interested in how design affects life is large enough to be an audience for a podcast but might not be large enough to be an audience for a radio station.
If you look back now to the digital cable thing, no commercial network ever had a cooking show. After 1994, there were cooking channels. Because the audience size needed to support a cooking channel was a fraction of the audience size needed to support a million-dollar-per-episode sitcom.
So there’s a shift in the fundamental production dynamics. There’s a release of a certain amount of creative energy. You need structures through which people can accomplish things. You know not everybody’s a genius to do everything. So I think PRX represents this structure that can attract capital.
And the reason why we’ve been talking is there is is also a level of understanding of what the market looks like. Who are the audience members? What do they think? How do they use this stuff? What would they prefer? You need people to collect that information. Most producers are not going to do that. They are just going to produce programs. So PRX has to play some kind of role there, some galvanizing role to pull these pieces together.
JS: You did last year talk about the effect or non-effect of the sort of Kickstarter economy on the larger public radio giving economy, and that there’s a potential misperception of how influential that is. So you took a look at that and said, despite what seems like a potentially very disruptive piece of how giving is happening as it migrates to some direct-to-producer support, this is actually not, when you talk to stations or talk to listeners, threatening the edifice of that cornerstone of the economy.
MF: Well, I never talk to any listeners except for my wife and a few other friends. I talk mostly to PDs, program directors.
The people who make decisions as to what to put on the air view the relationship between distributors and the audience as basically a wholesale retail thing. “We buy programs, we put them on air, and we retail them—we give them to people in exchange, and people give us the money that we pay you in fees.” And the direct relationship between some of the best producers and their audiences—and there are a few, not a lot—that do bring back some substantial dollars—that seems a violation of that model.
But when I would ask people, “Do you see any deterioration in your membership revenues or your membership relationships based upon that violation?” The answer was universally “no.”
But remember, Jake, you just were referring to something: There’s almost always a very big lag between the emergence of a disruption and when it really starts to happen. So, while Kickstarter or other forms of financial relationships that could support new production models may be small now, you have to draw the trend line up. And then where does the trend line become strong enough that it begins to undermine the other business model? I don’t know that we would see that for years, but it’s certainly nothing to ignore, and every subsequent discussion I have with people, I’ve included questions about whether you, for example at a station, would want to start doing Kickstarters. And I’d say half the people say we’ve at least thought about it.
Most producers, even station people, don’t realize the size of the public radio economy. The program economy’s $500 million. So if there are producers taking $5 million in Kickstarter and direct contributions, it’s just not really rockin’ the boat. Is there within ten years a possibility of that changing? It’s not inconceivable.
(Radio image via Shutterstock)