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June 23, 2011, 11:30 a.m.

The newsonomics of the next-gen NPR network

Editor’s Note: Each week, Ken Doctor — author of Newsonomics and longtime watcher of the business side of digital news — writes about the economics of news for the Lab.

Tell me if you’ve heard this one. The head of media company says: Why are we reinventing the wheel?

Why are we — we who know how to create stuff our audiences love — spending so much time and money on stuff we don’t know, like technology? Isn’t there a way to do it cheaper or faster, use what others are using or figure this out, together, with others in our business?

It seems so simple, yet the tale of the development of new, digital technology for publishers and broadcasters has been a tale of almost uninterrupted woe. Tech development has been a cost drain, a distraction, and ultimately a disappointment, as digital-only companies have outpaced legacy companies time and again. Time to market and scale really do matter when being first decides the race — in search (Google), video aggregation (YouTube), social connectivity (Facebook), saucy aggregation (HuffPo) and (aspirationally) local (Patch?), among too many other examples.

Against a backdrop of industry consortia that have gone from comically bad (starting with the newspaper industry’s New Century Network in the mid-’90s, to Tribune-Knight-Ridder-Gannett (TKG) moves to AP’s ongoing attempts to round the wagons to the latest talks between Gannett and McClatchy) to apparent half-steps (the consumer magazine industry’s sort-of-group play with Next Issue Media), what divides media people has been more important than what united media people (with apologies to the first-cowboy-from-Texas president, as his wannabe successor takes another tack).

NPR Digital Services is trying, against some odds, to set a new model. A decision point on the initiative’s expansion could come as early as July. Plainly NPR is at a crossroads, and it’s one that all who care about news — local and national — should better understand.

The effort that was once called Public Interactive is now called Digital Services and could become…a network. That network notion is a huge one, but one that’s still down the road from this Digital Services advance. First, we see the idea of shared, enable-us-to-move-to-digital-faster-and-more-cheaply and then, stations tell me, we’ll figure how to use the new engine to create new kinds of content (text + video + audio, of course, NPR’s core legacy advantage).

As we look at the newsonomics of NPR Digital Services, we can see big potential impacts and dollars. We also see that the public radio movement, and the effort to enlarge it to become public media (“‘Public Media’: $100 Million Plan, 100 Journalists Per City“), is now re-emerging. As politicians used NPR as a convenient pinata in the budget battles and NPR offered a couple of sticks, in the Juan Williams firing and Ron Schiller/phony sheik incidents, public radio put its head down, the better to avoid the fire, which it had done to some degree. It is now peeking back up, seeing if the coast is clearer. (Best joke summarizing the twin gaffes that, in quick succession, led to the CEO Vivian Schiller’s departure: “It’s not surprising that NPR shot itself in the foot; what’s surprising is how fast it reloaded.”)

NPR’s digital growth is impressive. On alone, it’s seen an 87 percent increase in pageviews, to 50 million, and a 40 percent increase in unique visitors, year over year, to 4.7 million, according to The Nielsen Company. NPR’s own internal count shows a similar ramp, but counts 19 million unique visitors, among all the NPR applications from to tablet, web, and smartphone apps. In addition, more than a half dozen of the big city stations from WBUR (“WBUR celebrates its first year of operating a news site“) to WBEZ to Minnesota Public Radio to Oregon Public Radio to KPCC and KQED have recently innovated new local news sites of their own (distinct from the legacy programming guide sites) and greatly grown traffic as well. Significantly, as newspaper web traffic has showed signs of stagnating, NPR’s is growing — without the potential power of more robust content management and distribution strategies.

As I’ve argued over last several years (“Public Radio Emerging as Local News Player“), public radio values are the closest to newspaper values — and those “without fear or favor” values are more sorely needed as cable TV and too much of internet “news” traffic benefits from division, however real or contrived. Stronger public media operations could be both a good substitute for local newspaper news in continuing decline — and/or a partner for it, as new combinations of new local media operations become more viable and visible.

So what is Digital Services? Public Interactive, a NPR operation housed in Boston, became NPR Digital Services about six months ago, when Bob Kempf, an alum of Boston Globe’s, Gatehouse, and Ottoway Community digital operations. It is now staffed by 21 people. If the new initiative is fully funded, it will grow to 42 staffers and serve as the nerve center for public radio’s digital future.

It’s intended to be a full-service center, rooted in technology and branching out to wider, collective, and collaborative, deal-making. It starts with robust content management system, built on Drupal 7, and expands from there. “We’ll include research, analytics, training, product marketing, design, API development, business development, and network operations,” NPR digital head (and former USA Today editor-in-chief) Kinsey Wilson says. “It’s a complex choreography of talents.”

That bigger intention builds on a number of recent public radio experiments. Projects have included Project Argo‘s topical sites around the country, its Impact of Government initiative, its development of an NPR API, and more.

The new network will cost about $5 million a year to run. Funding it will be those member stations. Each station will be assessed a new mandatory fee, ranging from $1,800 to $100,000 per year, depending on station size. Stations would pay full assessments in 2014, a third in 2012 and two-thirds in 2013.

It’s the mandatory part that sticks in some craws. So the NPR board, in approving the costs of starting to build out Digital Services through this year also encouraged a listening tour. That tour, headed by Wilson and Kempf, has been touring NPR country. Eighteen cities in the the last eight weeks. Yesterday, in Atlanta, some eight to 10 southeast stations were represented by about 35 staffers. In total, Kempf figures that more than 175 of NPR’s 268 member stations will have participated. The tour is intended to gauge sentiment, gather station digital needs, and gain buy-in.

My non-scientific survey of station management shows fairly strong support. Why? The economics are compelling. Certainly, it makes sense to all those investing in get-beyond-radio to digital technologies to do it once, rather than hundreds of times. Beyond that, though, the economics of revenue are rising to the fore.

For KQED Public Radio General Manager Jo Anne Wallace, who runs the most-listened-to public radio station in the country (802,000 weekly listeners, followed by WNYC at 753,000), revenue is at the top of her Digital Services wish list. She calls it “networked revenue sales.” Wallace wants the power of the whole to bring her more national digital underwriting support, as the National Public Media operation has provided national radio underwriting support. Heard strongly, in addition, on “the tour” has been “help us with online membership.” Smarter technology can connect up membership databases with site technologies to allow better targeting and customization of membership pitches and upsells.

Underwriting and membership. Or: advertising and circulation. It’s the same two-headed digital model that’s the talk of 2011 in newspaper world.

Summing it up, in support of Digital Services, Wallace says, “We won’t use all the services, but we can’t go it alone.”

Boston’s WBUR General Manager Charlie Kravetz — whose station on Wednesday won the prestigious RTNDA Edward R. Murrow Award for the “best large market radio website in the nation” for the second consecutive year — is equally in favor, summing up BUR’s next major push as the need for greater “engagement — hour to hour, not just day to day.” John Davidow, WBUR’s executive editor of new media, looks at it from an editor’s point of view: Digital Services would give him “more pieces on the chessboard to play with.”

The timing is now. On July 13 in Pittsburgh, some number of NPR’s member stations will meet (or conference into) the annual NPR member meeting. Digital Services will get a good airing there. Then on July 21, the NPR board — which, remember, has got to pick a new CEO soon to replace Vivian Schiller — will meet in Washington, D.C. Though their agenda is not yet set, expect Digital Services to rise on the agenda, maybe get a vote, and maybe get a full-speed-ahead.

What would hold it up?

Democracy. NPR’s member stations are as diverse as the small regions and mega-cities they serve. They reflect their audience and often their college station roots. They range from free-range granola to tightly wrapped brie crowds, with those stereotypes lubricated freely by copious amounts of Diet Coke and even Bud. The “niche” audience consists of 26.8 million weekly radio listeners (you know who you are). If, in truth, NPR listeners can’t be well-stereotyped, neither can station management.

It ranges freely from those who would be entirely comfortable in the corporate news world to those who still aren’t sure that bluegrass and classical music through the days and nights isn’t just fine for their audiences. Talk to the general managers, and you find a fierce pride of place and of individuality. Which brings up back to the question, familiar to all of us who have toiled in the digital news world: Can you network localism, providing tools to make it better?

It’s been a religious argument over the years, and, I believe, it’s time to drop the faith-based approach. The facts tell us that pure-play, digital-only companies, from the Googles to the HuffPos, have a strong economic advantage in operating on single, scalable, more-easily-taken-to-the next stage technologies. If those who base their work first on fair and free news reporting and community service — newspaper and public radio and some commercial broadcast people fit in here — don’t face those facts, they will (and are) being replaced by those for whom fair and free news reporting and community service are secondary priorities.

That said, there are some good arguments, and cautions, about Digital Services.

Take Torey Malatia’s. Malatia, a strong innovator and co-conspirator with Ira Glass in the invention and nurturing of This American Life, says simply that while Digital Services may be a good idea for hundreds of stations, it’s not a good idea for WBEZ, the Chicago station he has long run. His two points: 1) WBEZ has substantially invested in many of the technologies Digital Services will provide; 2) WBEZ is so locally focused that it would benefit little from whatever network synergies, such as sharing of content, that may come down the line.

Others raise, privately, a caution about creating a strong digital operation. How do we know, they say, that the national operation — under whomever may run it in years ahead — will maintain the same premium approach to NPR product that the network enjoys in radio? While Wilson uniformly gets good marks as a collaborator, the future does always bring risk.

These are good cautions. National networks always provide disproportionate benefit. Yet, at this crossroads moment, it’s easier to say “slow down the process,” then let’s grasp the moment. As Kinsey Wilson points out, the marketplace is now moving quickly and the larger individual stations will feel compelled to solve their own individual problems, with their own money, unless a common program is agreed upon soon.

I wouldn’t lay any odds at this point (democracy can be a heartbreaker), but from my experience I’d hope the NPR board steps up, rather than to the side. It could be easier to snatch defeat from the jaws of a largely victorious listening tour. It could well mean, though, that NPR would miss the moment to make a bigger difference for its own future — and ours.

POSTED     June 23, 2011, 11:30 a.m.
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