Tuesday, June 02, 2009

A media business model that works?

The phrase "business model" is joined with "media" so much, lately, that it's hard to remember how odd a business it is. I recall the midlife crisis of radio sales rep Billy Crystal in the movie "City Slickers:"

Well, what is my job? I sell advertising time on the radio.

Basically, I sell air.

At least my father was an upholsterer. He made a sofa, a couch, you can sit on it. Something tangible.

What can I point to?

Selling Air. As a business model. Talk about a setup to a midlife crisis!

I work in public radio. I manage WDUQ, the leading National Public Radio (NPR)/Public Radio Station in Pittsburgh.

Public radio relies on a mix of listener donations, business support ("underwriting," similar to but not completely like radio advertising), foundation support, support from licensees (like universities) governmental support (state, local and federal support, including the Corporation for Public Broadcasting) and a number of other activities from interest income, car donations, bake sales and even bingo games.

For WDUQ, no bake sales, bingo, state or local government funding. Our endowment is tiny. We rely on listener support for more than half the budget, and corporate and business support for 25 to 30%.

In the midst of the current economic downturn, WDUQ's business support is down a bit; and we have more individual donors, but they are giving less, on average. With a budget of around $3 million for our broadcasting operations, we have a "problem" of about 7% as we finish up our last month of the budget year (June).

Still, while WDUQ is facing challenges, they are nowhere near as serious as the revenue challenges for NPR.

As you may have heard or read, NPR has been through cutbacks, including two rounds of layoffs in the past six months and significant use of cash reserves. One of WDUQ's most popular NPR programs, Day to Day was among the cuts. More than 36,000 people a week used to listen to that show on DUQ alone.

The endowment that NPR built up to serve as a "keel" during turbulent times has dropped in value so far that no money may be withdrawn from it. Business support has fallen substantially and foundations are cutting back on grants.

The most stable source of income for NPR is fees for programs from stations like WDUQ. But, in times like these, it isn't enough.

So, while WDUQ looks to close its own financial gap this month, we're going do a bit more for NPR, too.

Beginning Thursday, June 4, WDUQ will launch a pledge drive that will also serve as an extra benefit for National Public Radio. During the campaign (and for all of June), contributors will have the option to decline a thank-you gift and instead have 10% of their pledge sent as an additional gift to NPR.

This will be on top of the hundreds of thousands of dollars in programming fees that DUQ has already committed to pay to NPR. It's not huge, but it's a start.

The real power behind public radio's future is more than just the commodity of our content. It is the relationships we have built and sustained.

For public radio (and media), our "business model" has been built from the act of service and the voluntary support of people who believe in and rely upon that service.

This really wasn't meant to be a pledge drive "spot" for the WDUQ, but I guess it is.

Still, while we are in a challenging place right now, public radio may be one of the few "business models" in media that works.

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