Upsides: Reconceived public stations can ‘be more PBS’ and be more local

Commentary by Dennis Haarsager

PUBLIC MEDIA FUTURES The stations are here so they can understand and illuminate a community’s aspirations and concerns, engage people in the life of their community, and help people reengage and reconnect with one another.
— Richard C. Harwood and Aaron B. Leavy1

The remark above reflects a way of thinking strategically about the institution of public broadcasting at this point in our history. Today, public media boards and executives face such strategic questions as:

What can we do to be a more significant and engaged institution in our community?

What should be our focus, and what does that mean for redeploying resources from current activities?

How can we help nonprofit and government entities be more effective when their missions are in greater demand?

How do we respond to disruptive changes in media usage?

Our web/social/mobile efforts don’t feel effective; can we change that?

How do we reach younger people after childhood?

Do we have the right internal leadership, the right strategic skills on our board?

What is the appropriate staffing mix between content and support specialists?

Can we achieve scale and lower costs through collaborations?

How can we deal with the loss in public funding for capital equipment at a time of more rapid replacement cycles?
What’s the best way to differentiate our station channels?

What follows won’t answer these questions for your specific situation, but it is intended to give you a strategic framework from which you can derive them.

Most of the opportunities and threats we face today apply to both radio and television, as does much of this framework, but the title, of course, borrows the current PBS slogan. Feel free to substitute your national acronym.

I currently work for the Public Television Major Market Group and serve on the American Public Television board, but the opinions expressed here are my own.

The reality of our business

O wad some Pow’r the giftie gie us
To see oursels as ithers see us
It wad frae monie a blunder free us
An’ foolish notion
Robert Burns, “To A Louse,” 1785

We’re not the BBC or the Canadian Broadcasting Corp. with assigned remits; we’re a peculiarly American conglomeration of some 365 independent radio, television and joint licensees. The public tends to shape its top-down view of us through NPR and PBS. The stations tend to shape their view from a community-up perspective, being in the same business as NPR and PBS, just on a more geographically limited scale. Both views are incomplete and limiting.

A more useful way to model the local station is to consider it as having two distinct lines of business, one national and the other local. It’s common for us to view the two as a zero-sum game — the more we spend on national, the less we have for local and vice versa. But the evidence is that it is, or can be, just the opposite — a virtuous circle of mutual benefit.

National programming creates the financial margins in listener- and viewer-sensitive income that combine with grant and public funding and earned income to subsidize local programming. Local stations, in turn, provide significant financial resources to produce, market and distribute national programs.

The margins returned by national programming are substantial. Look at PBS in 2009, for example. Allocating viewer-sensitive revenue by audience, national programming returned $2.14 to stations for each $1 they invested, but other programming and production expenses returned only 12 cents per dollar.2

The virtuous circle is completed if stations build multiple income streams and reduce production expenses in order to “be more local.” Strong local stations can invest in being more national as well, and more predictable in generating revenue to help support national production.

In other words, the more we optimize each line of business, the more significant and sustainable we will be. If stations “be more PBS” — that is to say more national, with content from APT or from American Public Media, NPR and PRI — they can better “be more local,” too.

Opportunities

Public media are well-established in our communities and are strongly positioned to serve their communities by bringing people together around their interests and giving them valuable, pertinent content.

Most foundations, many corporations and individuals, and even tax-based entities are looking to support innovation, partnership and positive change.

In public media we have strong, valued brands and competitive national programming generating billions of listener- and viewer-hours annually. Local stations are deeply rooted in the communities they serve, providing a strong foundation for public service hand in glove with other nonprofits with compatible aims.

The decline of journalism for print, radio and television has been widely noted. New text-based online journalism efforts have been established in several cities, often with expatriates from city newspapers, and sometimes in collaboration with established public media. Few, if any, have thus far become profitable.

There are more than one million public charities in the U.S. — about 2,800 for each of the 365 public broadcasting entities.3 If you think public media providers are fragmented, the public charity space is much more so. And their effectiveness is limited by what John Kania and Mark Kramer of the nonprofit consulting firm FSG have termed the “isolated intervention of individual organizations.”4

In 2010, the revenue for these more than one million public charities totaled $1.4 trillion, and they aggregated $2.5 trillion in total assets. Additionally, state and local governments collect tax revenue of $1.3 trillion for public service.5 Together, these investments in public service were more than 80 times larger than the combined revenues of commercial television stations and the radio industry.6

As natural conveners and media experts, public media seem ideally positioned to make a major difference in the work of the public service sector. But the “isolated impact” principle means we stand little chance of making a difference by ourselves; rather, as Kania and Kramer argue, our sector should be building “collective impact.”

As local stations, we have far greater opportunities in being the media arm of the nonprofit world than being the nonprofit arm of the media world.

Challenges

We are dealing with fundamental long-term challenges in media usage and the media economy that are upending the entire media marketplace, including public media. Web implementation for most stations has been too limited and too often devoted to the wrong ends, failing at both its intended purpose (promotion and audience cultivation) and for the greater purpose it could serve (local content delivery). Mobile platforms are coming on fast, but local stations — with a few notable exceptions, mostly in radio — are deer immobile in the headlights.

Over-the-air television largely survived the last disruption of media-technology advance — cable and satellite networks — though with substantially diminished audiences. It survived because the users of the new distribution platforms had approximately the same demographics as those who watched broadcasts.

The ongoing digital disruption, in contrast, actually holds greater opportunity for public media. The digital audiences are significantly younger, and they use media that are friendly to their personal schedules, not those of programmers. This is an opportunity for growth — if we take the right steps — because the digital audiences comprise the demographic gap we’ve been underserving.

While most foundations and many potential major-givers are looking to support innovation, partnership and change, they also increasingly apply standards of accountability. Competition for this giving is growing because charities’ needs are growing, because government has less discretionary money to contribute and because the charities’ fundraising is increasingly sophisticated.

Public media, especially in television, have way too little funding to replace their capital equipment due to the shortened life cycles of digital technology and the loss of public subsidies such as the Public Telecommunications Facilities Program. And this will be exacerbated if we attempt to maintain what can be considered, given today’s media trends, an over-investment in capital facilities.

Strategic framework for change

The essence of strategy is deciding
what not to do.
Michael E. Porter 7

So we have three profound pulls in the same direction of change, and each is motivation enough for decisive action.

The opportunities we have with the charitable and public sectors should compel us to action even if we didn’t face the challenges of funding and media change. Fortunately, accepting the challenges of community engagement will help address them.

Similarly, the funding challenges alone should compel us to action even if we didn’t encounter those of media change and nonprofit community service.

And the demands of media change would be sufficient to move us to action even if the other two weren’t in play.

To “be more” in both of public media’s lines of business — national and local — I believe we should follow the advice of Harvard professor Clayton Christensen and colleagues and effectively disaggregate them at the station level: Give them separate strategies and often separate leadership, enabling each to grow without the imperatives of the other.8

Disaggregation at the station level means pursuing these lines of business separately — the national side operating largely through the most cost-effective outsourcing and “newco” collaborations, and the local side rebooted from the ground up to take advantage of journalism or community-engagement opportunities, with much less need for expensive capital and support staff.

In that framework, the components typically have these characteristics:

National line of business

  • Feels comfortable in the traditional role, being the nonprofit arm of the media world
  • Attracts relatively broad audiences
  • Generates the largest audience and sum of user-sensitive income
  • Increases net unrestricted revenue
  • Permits greater spending on high return-on-investment programming
  • Expenses reduced through outsourcing and collaborations with “newco” services — startup and spin-off companies that handle functions such as master control, program acquisition and scheduling, interstitial production, and individual giving

Local line of business

  • Thrives by building engaged communities, usually by joining in collective impact with others in the public service sector
  • Serves as the media arm of the nonprofit world, enlarging its role as a civic convener, working strategically to multiply the impact of partner organizations; and/or
  • Focuses particularly on journalism, which fits well with the traditional role as the nonprofit arm of media but also builds community impact
  • Has targeted audiences
  • Funded by net revenue from the national line of business
  • Project revenue from foundations, partners, tax-based sources
  • Broadens its output and reach by increasing its ratio of producers/journalists to support personnel
  • Uses smarter, “smaller-but-broader” facilities for content generation
  • Shares studios among television stations, with perhaps 30 to 60 sites in the country
  • Lowers cost using more digital-friendly production modus operandi (e.g., veejay techniques in television; Knight training in public radio)
  • Uses a “Create Once, Publish Everywhere” mode of production and distribution9
  • Adopts “distributed distribution,” using multiple platforms, including partners’ and other community outlets

There are, of course, many challenges in moving toward this framework.

One of the hardest is lack of strategic governance, or even, in too many cases, governance that is directly involved with the station. That’s beyond the scope of this essay, but the Station Resource Group has produced a good overview of this issue10, and Bill Kling, former CEO of American Public Media, has persuasively described the limitations of universities and other institutional licensees.

Another significant challenge is lack of consensus, both within and among stations, on what they want to achieve and, especially, how they want to do it.

Many stations must significantly change course, something that will engender internal resistance. The shift will be especially significant in television stations with traditional production efforts that do not regularly produce news programming.

As a station manager, I admit, I succumbed to the temptation to “play the cards we’re dealt” — to accept past limitations as our destiny. That’s not strategic.

To “be more” locally, we must produce content that touches more of the community more deeply, that increasingly reaches listeners and viewers on their digital devices, that doesn’t require large capital outlays we can no longer afford or justify based on results, and that opens up new revenue streams.

Being more opens up a whole new world of opportunity for public media.

Dennis Haarsager, a longtime public TV/radio station manager in Washington state, has been elected to several boards, including those of the Station Resource Group, the Association of Public Television Stations and PBS. When he was chair of the NPR Board, he was drafted to serve as interim c.e.o. He remained at NPR as senior v.p. for system resources and technology until retiring at the end of 2010. He is now president and executive director of the Public Television Major Market Group. He follows media policy, economics and technology on the blog
technology360.com.

Comments, questions, tips? Contact information for the author: haarsager.org.

Copyright 2012 American University

Endnotes

1. Richard C. Harwood & Aaron B. Leavy, Why We’re Here: The Powerful Impact of Public Broadcasters When They Turn Outward, Charles F. Kettering Foundation, 2011.

2. Programming from other sources such as American Public Television likely provides a return similar to PBS’s, but that’s masked in this analysis because they provide a smaller percentage of broadcast hours and because local programming is much more expensive per hour. Under-reporting of capital costs likely means that returns on local programs are even lower. Data are derived from PBS AFR Dataset reported in Booz&Co, “System Health and Sustainability,” 2010 PBS/CPB Round Robins.

3. Source: National Center for Charitable Statistics, tinyurl.com/many-charities

4. John Kania & Mark Kramer, “Collective Impact,” Stanford Social Innovation Review, Winter 2011, tinyurl.com/charities-collective-action

5. Source: U.S. Census Bureau Quarterly Summary of State & Local Taxes, census.gov/govs/qtax/

6. Source:  BIA/Kelsey, Local Media Research and Forecasts, tinyurl.com/local-media-forecasts

7. Michael E. Porter, “What is Strategy?”, Harvard Business Review, November-December 1996.

8. “Disaggregation”  is used to describe a tool of change management recommended by Clayton M. Christensen, Matt Marx, and Howard H. Stevenson in “The Tools of Cooperation and Change,” Harvard Business Review, October 2006.

9. Daniel Jacobson, “COPE: Create Once, Publish Everywhere,” Programmable Web, tinyurl.com/create-once

10. SRG.org/governance/overview.html

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