Transforming public broadcasting
We need not bake our own cookies
Could it be that many of the resources public broadcasters need to meet our present and future service goals are locked up in our system like precious minerals in ore? I’ve come to believe we need to extract those resources and put them to better use.
Where are these riches? A colleague uses a different metaphor: “We’re all baking our own cookies.” Each public broadcasting licensee is in the habit of performing all the functions of a station, with only a few exceptions, even when our listeners and viewers cannot tell the difference.
Do we really need to devote our limited resources to all aspects of the cookie business? Our customers care if they’re consistently good and freshly baked, but they probably don’t care if the ingredients are bought collectively or where the accounting is done.
We have vital contributions to make without “baking our own cookies.” None of the other community nonprofits—museums, art galleries, educational institutions, libraries, theaters, symphonies—comes close to us in the “gross tonnage” of public service we perform. Public broadcasting aggregates 20 billion person-hours of contact with the public every year, roughly five times the annual classroom hours for all students in all U.S. four-year higher education institutions. With 40 million visits a year, the Smithsonian Institution’s 16 museums has just one-fifth of 1 percent of our contact hours.
Our only constant is change, as we’re swept along by economic and technological waves. For now, public radio and television are on different audience and economic vectors. But both are threatened — arguably radio as much or more than television — by what Harvard professor and author Clayton M. Christensen calls “disruptive technologies.” Neither medium can afford complacency.
Today, the urgent choice in public television might be characterized as “to be or not to be.” In contrast, public radio’s urgency is more “to be all we can be.”
Both imperatives suggest strategies to protect and further our mission. Although we have encouraging examples of risk-taking in public broadcasting, many of us have been risk-averse. We must recognize, however, that doing nothing also entails substantial risks.
The media landscape now and in 2008
In 1991 and 1997, public broadcasting developed scenarios as a planning tool to help licensees anticipate the future. Last year, CPB initiated a new scenarios review and assigned it to the Digital Distribution Implementation Initiative core working group. Our work was reviewed by 31 experts in many disciplines. It mirrors closely efforts by Accenture, PBS and CPB to update the 1997 scan of the television industry, as well as the recent McKinsey study of public television economics.
Let me sketch quickly where we are in the evolution of American electronic media.
- Ownership has consolidated substantially since 1996.
- Cable and DBS companies are the gatekeepers for the primary TV set in 85 percent of homes.
- The AM, FM and TV spectrum are fully packed in most places.
- Nonbroadcast channels—cable, DBS and satellite radio—continue to proliferate.
- Cable channels have nearly overtaken broadcast channels in total viewing and advertising revenue.
- On-demand distribution is gaining a foothold in both audio and video.
- In radio, national voices are replacing local ones.
- The landscape is littered with insufficiently compelling or failed radio innovations.
Five years from now, it’s highly probable that ownership of both distribution infrastructure and program production will be even more concentrated than it is today. Stations in the new 700 MHz digital distribution services the FCC envisions for the former high-UHF television spectrum will be just beginning operation.
- Local stations will continue to serve mass audiences but primarily through cable and DBS. Over-the-air reception is likely to be of minor consequence.
- Viewers will choose programming from among increasingly customized on-demand options.
- Ad revenues will remain important to television, but subscription revenues will play a growing role.
- Ad revenues are likely to prove insufficient to support the current broad array of channels, causing many to fold.
- Public TV will obtain cable carriage of multicast program streams not through “must carry” but “must convince.”
- The steady erosion of revenue will threaten the existence or at least the stand-alone structure of a substantial number of licensees.
- A variety of technologies, most with greater bandwidth or capabilities than over-the-air broadcasting, will compete to deliver services to the household.
- With the consolidation of ownership, most local voices will disappear from the air except for the basics—local news, sports, traffic, weather and advertising.
- Digital broadcasting will be an established technology, though it’s hard to predict how widely consumers will accept it.
- The lack of available spectrum for public radio programming will be even more acute than it is today. This will cause some to seek distribution through the Web and other means, such as digital television broadcasting and/or the forthcoming 700 MHz digital services.
- On-demand audio distribution and other new media will continue to grow, though we can’t predict how fast.
The case for change
Based on these largely disturbing assumptions, we can see a case for several fundamental changes:
Licensees need to broaden not only their delivery platforms but also their notions of whom they serve.
They must move from being relatively small, independent, self-contained operators to federations that achieve strength and scale by creating alliances horizontally (with each other) and vertically (within the communities they serve).
Licensees unwilling or unable to change will lose out to their commercial broadcasting counterparts, who have rapidly consolidated since deregulation in 1996, or to new “disruptive technology” entrants into the media business.
Despite this threatening turmoil five years from now, we fear that public radio and television stations will remain heavily invested in “baking their own cookies”—performing functions that could or should be done elsewhere. While they will be able to continue operating in their habitual self-contained fashion, that will come at the price of reducing the resources available to serve communities.
Mustering the will to shed these demonstrably duplicative functions will never be easy, but the means of shedding them have never been closer at hand than they are today. That will be especially true if we give a strong priority to our systems’ current plans for the next generation of public broadcasting interconnections.
Investments to sustain or to reposition
The DDII working group considered two fundamentally different strategic investment scenarios—one designed to sustain public broadcasting as it is, the other to reposition it with new initiatives consistent with its mission.
Whether licensees make investments individually or collectively, not all strategies will work unless we achieve sufficient scale to make them economically viable. For instance, acquiring distribution capacity—shelf space for expanding services—will continue to be an attractive and appropriate investment strategy for individual licensees. Collective efforts such as Public Radio Capital can help to make individual investments possible.
We looked at three tactics for collective investment in innovation:
- Toolkits: Licensees can make these investments in activities or “tools” that enable them to improve practices within their own organizations without the need for large-scale collaboration. Most toolkit investments tend to be modest and favor the sustaining scenario.
- Service Clouds: Stations invest in collaborative activities or “clouds” (to borrow a computer networking term) with other stations. Service cloud investments tend to be moderate to large and may be equally effective in either scenario. The public broadcasting interconnection systems, which were major reasons why NPR and PBS were founded, are “service clouds” that we know well.
- Colonizers: These investments that “plant a flag” in new and unfamiliar territory are usually made independently of any licensee’s legacy business. Colonizers serve a station’s mission in new ways and can often exist on a stand-alone basis. Most colonizer investments will also be of moderate-to-large scale and tend to lend themselves to a repositioning scenario. They will have a higher failure rate than other investments, so we will need to place multiple bets in this area to achieve successes.
When we plan for the near future, individual licensees are likely to want to preserve operational independence and as much of the public service “gross tonnage” as possible. This would argue for sustaining strategies — large investments in toolkits that substantially improve local performance, less investment in service clouds and almost none in colonizers.
However, as we contemplate the media environment five to seven years out, we should favor investment in repositioning strategies. If we want to continue serving our mission locally or nationally, we must develop processes that provide “public broadcasting” services more responsive to constituents’ needs, which, like “disruptive technologies,” will be cheaper, simpler, smaller and more convenient to use.
Public TV: lacks the capital to do it all
Unfortunately, given the size of investments needed and public television’s declining financial fortunes, the core working group believes this medium (unlike public radio) will not be able to make parallel strategic investments in both scenarios unless it changes its business practices.
For example, we can see the promise of a repositioning strategy that increases investments in service clouds—collective initiatives to which stations can outsource activities without any disadvantage to local constituents. These kinds of investments do not inherently threaten the licensees’ independence; in fact they could provide an anchor for continued local ownership and a renewed emphasis on editorial, rather than operational independence.
When we discuss service clouds, we don’t mean to suggest that stations need fewer staff members. However, they do need repurposed staff members. Development personnel could be building endowments and major gifts, not ordering pizzas or shipping premiums; programming personnel could be forming community content production and distribution partnerships, not tweaking the schedule; and engineers could be developing community content networks, not worrying over one of more than 1,000 public broadcasting master controls.
Equally if not more important in the repositioning strategy are investments in colonizers—risky endeavors to help public broadcasting keep its seat at the table as new technologies and services come along. Some may emerge as “killer apps.” Others probably will fail.
Provocations on strategic investments
I’d suggest some plausible courses of action for public broadcasting, consistent with the environmental scan and scenarios outlined above, to free our own resources to further our mission. These suggestions are not put forward with the unanimous endorsement of the DDII working group and are not intended to be either exhaustive or prescriptive, but they are intended to provoke thinking about ways we can make a difference for our future.
Let’s discuss the following possibilities:
Forming virtual broadcast groups: New digital distribution companies could operate stations or perform a broad range of station functions on behalf of licensees across multiple markets. Such companies would save resources by centralizing back office functions, creating benefits of scale for all and encouraging best practices. They could achieve common technical standards, foster a more robust program economy and improve the system’s ability to aggregate capital for equipment replacement and technology changes. Licensees would be freed to concentrate on serving constituencies in their markets and fundraising. NPR and PBS themselves could provide some virtual broadcast group services.
Creating a public service “digital condominium association”: We could serve other nonprofits as well by building on blossoming relationships with higher education’s Internet2 and other advanced networks at the state, national and international levels. These condo associations could serve schools, libraries, museums, arts organizations and other public-service media providers as well as our fellow stations. Co-owners could have access to more peak capacity than they could afford alone, increase their political capital for public funding requests, and facilitate the exchange and distribution of digital content.
Assigning a system economics panel to devise ways to redeploy 20 to 30 percent of current nonrestricted system revenues (perhaps less in radio): The panel would highlight resources that could be reallocated from activities transparent to our listeners and viewers toward (1) sustaining program investments, (2) funding capital needs, and (3) funding “repositioning” efforts, local or national.
Regardless of how we weigh sustaining versus repositioning investments, public broadcasting ultimately faces profound change. No matter what we do about our future, we will not look the same in a decade, and neither will our environment. This transformation will be uncomfortable at best, catastrophic at worst.
The more we seek to understand and manage change, the more likely we are to survive and, ideally, emerge with our mission intact.
Dennis L. Haarsager is a part-time consultant to the Digital
Distribution Implementation Initiative (DDII), a public radio and television
strategic investment planning effort funded by CPB. He is on half-time leave
as associate v.p., educational telecommunications and technology, at Washington
State University and g.m. of its public broadcasting operations, Northwest
Public Radio and KWSU/KTNW-TV.
Web page posted June 30, 2003
Copyright 2003 by Current Publishing Committee