Redefining public media for the future

Commit to change that improves local service

Commentary by Dennis Hamilton and Erik Langner

Public media is made up of hundreds of storefronts in communities large and small, each of which has a unique window into America, its people and their stories. These storefronts — local public TV and radio stations — have built public media’s greatest asset: our unique relationships with listeners and viewers, local businesses and governments, and anchor institutions in the arts, philanthropy, education and social welfare.

Hamilton

Hamilton

Yet at Public Radio Capital we increasingly hear from public media executives facing competitive and financial challenges that threaten their stations’ economic foundations and thus their effectiveness.

Let’s face it: The public media business model isn’t changing. It has already changed in dramatic ways. Tax-based subsidies are shrinking, more universities are looking to sell their stations, and shifts in demographics and media usage patterns are transforming audience expectations and our membership-based revenue model.

The change that has reshaped public media’s revenue mix need not be a zero-sum calculation of winners and losers, where some communities continue to enjoy a rich variety of public media options and others lose access to quality national and local programs. Over nearly five decades, public broadcasters developed the means and wherewithal to build the public television and radio systems from nothing to where we are today. Now we must rethink how to extend the value of our services to new generations of audiences.

Langner

Langner

Are there ways we can work together more efficiently and effectively to sustain public media’s locally rooted legacy services while adapting digital technology to our mission of serving more listeners and viewers in innovative new ways? Can public media face change aggressively and do even more with the infrastructure we already have? Given the scope of the challenges we face, squeezing more revenue from our existing audiences, or making further cuts to our staff, are unlikely to suffice. Instead, managers must reconsider how to maximize public broadcasting’s potential in their markets or regions by exploring opportunities to grow and to collaborate more closely with neighboring public broadcasters and other nonprofits.

Since 2001, Public Radio Capital has been working with many of you to help change the service profiles of local stations. In doing that work, we’ve demonstrated that by acquiring and operating additional stations, organizations can significantly grow audiences and revenues. We’ve worked with KUSC to expand its classical music reach to San Francisco; we helped Colorado Public Radio acquire several stations and differentiate its classical and news formats; and we’ve guided several licensees through the acquisition and launch of new Triple A stations in Dallas; Austin, Tex.; and soon, Kansas City, Mo.

In the 200 transactions that we’ve worked on, we found that the hard work has to happen within each local station. It begins with managers asking, “How can I restructure my station so that we thrive and continue to provide high-quality local service going forward?”

Moving forward, acquisitions will continue to be an important tool for public broadcasters to achieve greater scale, but we’re encouraging managers to also consider collaborative opportunities that can achieve similar results.

The following case studies provide examples of how managers have crafted strategies to expand services to communities within their regions. Since no two cities, towns, markets or licensees are alike, the paths of stations in pursuit of growth and collaboration are similarly varied. But the motivation to change in ways that deepens public media’s service and relevance to local communities is the same.

State network forged from news collaboration

Ask Kathleen Pavelko about station collaborations, and she’ll tell you how catastrophic floods prompted North Dakota’s Prairie Public Broadcasting to join with university-owned stations in the heavily hit Red River Valley. Their alliance to provide emergency news coverage laid the foundation for today’s statewide public radio network, Prairie Public.

A year before the 1997 flood, Pavelko arrived in Fargo as the new c.e.o. of Prairie Public Broadcasting, made up of Prairie Public Television and Prairie Public Radio. The radio network broadcast from Bismarck, the state capital, to points west. KDSU and KUND served KDSU communities in eastern North Dakota’s Red River Valley, Fargo and Grand Forks, respectively. Each was operated separately under licensees North Dakota State University and the University of North Dakota.

Public radio service to North Dakota was split among three separate licensees prior to 1999. University-owned stations KUND in Grand Forks and KDSU in Fargo are now part of Prairie Public's Bismarck-based network broadcasting news and classical music. The service expanded with the 2009  launch of KPPD in Devil's Lake, indicated by a dotted coverage area. KJFM and KPPR, marked by green call letters, broadcast roots, rock and jazz music to Grand Forks and Williston, respectively. (Source: Public Radio Capital, V-Soft Communications LLC. Graphic: Electronic Ink)

Public radio service to North Dakota was split among three separate licensees prior to 1999. University-owned stations KUND in Grand Forks and KDSU in Fargo are now part of Prairie Public’s Bismarck-based network broadcasting news and classical music. The service expanded with the 2009 launch of KPPD in Devil’s Lake, indicated by a dotted coverage area. KJFM and KPPR, marked by green call letters, broadcast roots, rock and jazz music to Grand Forks and Williston, respectively. (Source: Public Radio Capital, V-Soft Communications LLC. Graphic: Electronic Ink)

Managers of the three stations had begun discussing the possibilities for forming a statewide network: KDSU was losing CPB funding, and the president of the University of North Dakota had indicated that he wanted out of public broadcasting. Then UND sustained heavy damages from the floods.

In response to the crisis, Pavelko and her staff joined forces with KDSU and KUND to co-produce news programs responding to the natural disaster. The stations’ news departments had collaborated for many years, but this was a far bigger and time-consuming effort than any before.

“I’m convinced our collaboration wouldn’t have happened without the flood,” said Pavelko, now president of WITF in Harrisburg, Pa. “It was the imperative that got us thinking about how to configure our services in ways that were more effective and efficient.”

As they considered the possibilities for combining their operations, a merger offered the capacity to produce a statewide news service bridging the state’s fragmented populations west and east of the Missouri River. Moreover, residents of the Red River Valley would gain access to Prairie Public’s quality legislative coverage originating from Bismarck. The operational necessity for combining operations became a means to the greater good for North Dakota’s people; it was not the end itself.

The two universities that held the licenses for KDSU and KUND were distinctly different institutions; each had its own terms to be negotiated before reaching agreement. To build confidence in the prospects for their collaborative venture, Pavelko reached out to peers and consultants to evaluate their current operating environment and recommend changes.

The process helped to create a case statement that staff, licensees and other stakeholders could buy into. CPB also provided critical financial support by backing planning, including an extensive study and facilitation that covered programming, development and technical planning of the statewide interconnection system. Finally, by emphasizing the public relations, promotion and brand identities of the two universities, the collaboration worked to extend their pride of ownership and sense of value in the new enterprise, which began operations as North Dakota Public Radio in 1999 and later changed its name to Prairie Public.

Prairie Public thrives in a rural environment by delivering quality national and locally produced public media — and it was built largely through the reconfiguration of the state’s existing public media capacity.

KUT’s split service leans into Austin’s unique identity

A market outside the top 40, Austin, Texas, has legitimate bragging rights as a city that welcomes creativity, technology and the freedom to be “weird.”

The University of Texas at Austin has helped foster a thriving environment for research and technology, attracting a significant class of creative professionals. Being the capital of the Lone Star State hasn’t hurt either.

Austin also has iconic status as one of the country’s best music cities. As the home to South by Southwest, Austin City Limits and the ACL Music Festival, its claim on the brand “Live Music Capital of the World” rings true.

So it’s no surprise that KUT, the city’s local public radio station and founding member of NPR, would thrive despite the challenge of balancing a split news and music format on its 100,000-watt 90.5 FM frequency for decades.

Nevertheless, the station’s leadership recognized a long time ago that acquiring a second high-power anchor station would allow its licensee to deepen the flagship station’s commitment to news and information while fully exploring Austin’s music scene on a new channel.

“Every community has its unique characteristics — successful stations lean into those in some way,” said Stewart Vanderwilt, general manager. “We needed to grow with the city we serve.”

In November 2012, UT worked with Public Radio Capital to complete the acquisition of FM station 98.9, and the sister station launched under new call letters KUTX this January.

Vanderwilt expresses gratitude to supporters in a photo taken in KUT/KUXT's new broadcasting facility.

Vanderwilt expresses gratitude to supporters in a photo taken in KUT/KUXT’s new broadcasting facility.

Vanderwilt and his staff had analyzed other potential station acquisitions over the years, and when 98.9 FM became available in early 2012, they were focused on completing a major capital campaign for a new studio facility. Yet they recognized that this channel had the potential to fulfill their plans for future growth.

“It was our intent to finish the building, celebrate and then turn to differentiating our service,” Vanderwilt said. “But opportunities come when they come, not necessarily when you need them. As it turned out, timing was very good.” He credits the university for responding to the opportunity quickly, noting that an initial decision to pursue the purchase in March 2012 was made within four weeks.

Since its launch early this year, KUTX, which is branded as the “Austin Music Experience,” has built a monthly cumulative audience of more than 120,000 listeners, and new members are joining at record rates. Hundreds of bands have been booked for live performances in Studio 1A of the new KUT facility, and KUTX joined with four public radio music stations to present the first live concert, multi-station broadcast and webcast performance from SXSW in March. And, in the first membership drive as an all-news
station, KUT added 735 new members.

Not only is that “leaning into the community,” it’s leading in public radio.

Kentucky pubcasters weigh options for future service

This summer, Public Radio Capital’s Revolving Public Media Fund helped bring multiple public radio operators together to strategize about the future of public radio service in Kentucky.

Managers from six of seven stations in the Kentucky Public Radio Network —  Louisville Public Media; WEKU, Richmond; WKMS, Murray; WMKY, Morehead; WUKY, Lexington; WKYU, Bowling Green — are exploring options for streamlining their operations while building capacity to provide more public service programming to the state.

WNKU in Highland Heights, a contemporary music station broadcasting into southern Ohio, is a KPRN member but isn’t participating in the analysis and talks.

Though Kentucky stations have been working together sporadically for years on news initiatives, KPRN was established only 15 months ago to manage a news bureau in the state capital in Frankfort. It has since expanded its activities to advocate for public media and promote collaborations among the stations.

The decision to look at new operating models was spurred in part by pressure on federal and state funding, as well as the signal by a university licensee that it is considering selling its station.

Kentucky policymakers cut higher education spending by 24.2 percent from fiscal 2008-13, according to a recent analysis by the Center on Budget and Policy Priorities. As university licensees, six of the stations within KPRN have been hit by those spending reductions. LPM, established as a multiple-service operator when three Louisville stations merged two decades ago, is the only community licensee.

“There’s great concern about state university funding cutbacks as well as the potential reduction or elimination of CPB funding,” said Donovan Reynolds, LPM president, who spearheaded creation of KPRN. “We are about to embark on the first phase of a study to figure out how we can further work together to preserve what we have and build more public media services for Kentuckians.”

Declining subsidies to Kentucky's pubcasters call for stations to improve service to the state, Reynolds says.

Declining subsidies to Kentucky’s pubcasters call for stations to improve service to the state, Reynolds says.

The stations have initiated planning for operational collaborations and possibly a consolidation and commissioned PRC to study how restructuring on this scale could work.

Reynolds has a track record in fostering collaborations within public media. At LPM, he guided the community-licensed public broadcaster’s development as a multi-format leader in news and music. He also acted as a catalyst to help Kentucky’s stations adjust as their subsidies from government and university licensees have declined.

LPM’s experience with a public media merger that strengthens community service is a useful model as public radio enters a post-subsidy era, Reynolds said. “We will have to fend for ourselves — be much more collaborative and aggregate funds to do significant programming. The old ’70s model — of some 400 independent fiefdoms with duplicative management structures — isn’t going to work any longer.”

The first step is making a commitment to change

In each of these cases, stations and institutional and community leadership have committed to change and worked together to determine the best ways forward.

The business modeling required to bring comfort and set a strategy is arduous, the negotiations require patience, and curveballs are inevitable. But as a public media system, this is what we must undertake: work with one another to bring out the very best of what we do — or should do — locally while relying on each other to grow the total public broadcasting pie.

Managers and their staffs will be called upon to make difficult decisions, but when the strategy is sound, and the guiding mantra is increasing service and engagement, each organization provides to its community, success is within reach.

Dennis Hamilton is director of consulting for Public Radio Capital, which advises stations on strategies for audience growth and service expansion. A former v.p. at Minnesota Public Radio, he has more than 30 years of experience in public media and in service on national boards and policy review panels.
Erik Langner directs acquisitions and legal affairs for PRC. Since joining the consultancy in 2005, he has structured more than $200 million in public broadcasting mergers, acquisitions, financings and operating agreements and gained extensive experience in working with stakeholders in a variety of public media organizations. Previously, he worked as an associate in corporate and private equity groups at the law firms of Latham and Watkins in San Francisco and Kirkland and Ellis in New York.
This commentary was first published in Current Sept. 9, 2013.
  • Charles Compton

    Just so the record is straight. The partner-stations of KPR have swapped stories via a network server since 1997. They launched a statehouse bureau in 2005, and have conducted shared trainings and group-buys of content off and on for years. I say this because it’s that foundation of collaboration that makes our current discussions possible. In other words, there was an existing framework for the work now undertaken by Public Radio Capital and the station managers of KPR.

  • Pingback: A Future in Collaboration for Public Media | PRC Blog

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