The future of public radio isn't its past

A couple of weekends ago, I attended "Radiolab Apocalyptical," a live show presented by Radiolab hosts Jad Abumrad and Robert Krulwich at the landmark Chicago Theatre. For those of you who aren't familiar with Radiolab, it's a weekly hour-long public radio show that covers science topics in an incredibly engaging way. The Chicago Theatre was packed, but what was really interesting was who it was packed with. The audience was young--most of the people I saw were in their 20's and 30's--not at all what you'd expect from a public radio audience in the U.S. Cast and crew members from NBC's "Chicago Fire" and "Chicago PD" tweeted pictures of themselves backstage at "Apocalyptical."

For much of the last two decades, public radio has been wrestling with a big problem: Its audience, while growing, is getting older. Twenty years ago, I was a member of one station's "big donor" club, and I attended several of its events. Other than the radio station's staff, I was by far the youngest person attending; most of the attendees appeared to be in their 60's or 70's. The public radio audience is, quite literally, dying off. Listeners have historically been older, well-educated and high-income. That's great when you're seeking donations, but not so good when you're trying to attract younger listeners and get them to become members for decades.

Public radio stations have been torn between keeping their older audiences and attracting younger ones. That becomes more difficult when even the hosts of shows that attract older listeners start retiring. Tom and Ray Magliozzi, the hosts of "Car Talk," one of the most popular shows on public radio, retired last year. Instead of cancelling the show or taking a chance on new hosts, WBUR Boston and National Public Radio (NPR) decided to rerun old episodes. Some of the episodes being rerun are 20 years old, and since they cover car repairs, Tom and Ray are talking about cars that many listeners may not have ever heard of. (Geo Metros, anybody?) Just about every public radio station runs Car Talk at least once a week; some run it several times a week.

Another show that's very popular with older audiences is "A Prairie Home Companion." Creator and host Garrison Keillor caused panic at public radio stations when he told the AARP in March 2011 that he planned to retire from the show this year. In December of that year, he changed his mind, and now says that he'll keep doing the show as long as he "love(s) doing it."  "Car Talk" and "A Prairie Home Companion" are two examples of public radio shows that appeal almost entirely to an older audience, but they're far from the only ones.

There are shows on public radio that draw younger audiences; "Radiolab" is one, along with "This American Life," "The Moth Radio Hour," "Wait, Wait, Don't Tell Me" and Roman Mars' "99% Invisible." But, shows for younger listeners are far outweighed, both in number and in scheduling, by those that target older listeners. If public radio stations are serious about attracting younger listeners, the first thing they can do is cancel "Car Talk" and put a show for younger listeners in its place. There's no excuse for giving prime radio time to 20-year-old reruns of a radio show that many listeners found banal when the shows were new.

And, while we're at it, let's get rid of pledge weeks (a misnomer, because most of them now run two weeks.) Pledge weeks give regular listeners to public radio a strong disincentive to contribute, because everyone has to put up with having their favorite shows interrupted whether they pledge or not. With the wide availability of smartphones that can receive streaming audio, public radio stations can offer subscribers apps that would enable them to listen to uninterrupted programs, so long as they maintain their subscriptions. Pledge weeks would continue on the broadcast station, but paid-up members could avoid them by listening through their smartphones. That's what younger listeners are doing already with Pandora, Spotify, iHeartRadio, Slacker and other services. These services typically offer free and paid versions; with the paid version, subscribers have to sign in with a username and password, but they get their music or talk commercial-free.

Public radio already has the shows to attract younger audiences (although it could have a lot more,) and it has the technology to do away with pledge weeks for listeners on smartphones. If public radio stations are serious about getting younger listeners to become members, the ball is in their court.

The radically reshaped media landscape

Today's media landscape is very different than it was even a few years ago. You might casually, or even professionally, follow one media business or another, but it's only when you look at all major media segments together that you understand just how radical the changes have been:

• DVRs have fundamentally changed the way that people watch television. Viewers are saving up entire seasons of shows and watching them all at one time, finding something better to watch on the DVR at 10 p.m. instead of watching network television, and skipping enough commercials that it's having a serious impact on the bottom lines of networks.
• Movie studios' home video revenues are in serious decline. Consumers are renting from Redbox and Netflix instead of buying DVDs, Blu-Ray is growing much too slowly to make much of a difference, and streaming video revenues haven't replaced, and probably will never fully replace, DVD revenues.
• As of July 3rd, Netflix became more popular than any U.S. cable network, according to BTIG analyst Richard Greenfield. Greenfield estimates that Netflix now has around 24 million subscribers, and the company itself said that its users watched more than one billion hours of video in June. That works out to around 80 minutes of viewing per day. In Netflix households, the service even beats ABC and CBS. Every minute spent watching Netflix is a minute that a broadcast or cable network isn't showing that person a commercial.
• Internet videos are finally making serious inroads into broadcast and cable viewership. It used to be that television networks simply used the Internet as a "farm system" to identify rising talent, but there are now too many people producing interesting Internet shows and not enough network slots to put them into. The Internet, unlike broadcast and cable, has an unlimited number of time slots and no requirement to get carriage from cable or satellite companies.
• Newspapers have cut all the editorial and production staff they can while still staying in business. They're now cutting back on deliveries and days that they print their papers. The only remaining step for many of them is to drop their print versions altogether and try to survive in digital form.
• Self-publishing has moved from the last resort for desperate authors to the fastest-growing segment of the U.S. book industry. Authors who could have gotten publishing contracts are choosing instead to self-publish, and are making more money as a result. Authors who were widely rejected by agents and publishers are turning to self-publishing and, in some cases, finding big audiences. (As with Internet video, major publishers see self-publishing as a "farm system," but it's only a matter of time before the farm teams overwhelm the big leagues.)
• Internet music services such as Spotify and Pandora are having a major impact on both the recording and radio businesses. Record companies are becoming more dependent on subscription music services for revenues; radio stations are losing part of their audiences to paid, commercial-free services. Car companies are adding Internet music services to their infotainment systems, making them as easy to access and convenient as broadcast and satellite radio.

There isn't one major media business--television, cable, movies, newspapers, books, music or radio--that isn't undergoing a dramatic upheaval. All of the changes favor new entrants. Rather than fighting back with innovation, most major media companies have resorted to litigation, lobbying, restraint of trade and refusal to deal in order to try to hold back competitors, or to support their customers that are trying to hold back competitors. In the short run, these tactics often succeed, but in the long run, they'll undoubtedly fail. You can't hold back the ocean forever.

The publisher bypass operation

I just read an article in the latest issue of Wired about the new breed of subscription music services--companies like Spotify, MOG and turntable.fm. The problem with these services (and for that matter, conventional purchase services like iTunes) is that artists get a very small share of the revenue. Most artists are now getting the majority of their income from live performances, not music sales. Where concerts once served to promote album sales, now digital music promotes live performances.

Online video distribution has had a similar impact on movies, television and original video. Most of the revenues from movies and television shows sold or rented by Netflix, iTunes, Amazon, etc., goes to the studios and distributors, not to the original producers. Original video produced for YouTube and other services is incredibly hard to monetize; only a few series, like "The Guild" and "Easy to Assemble", have sponsorship or distribution deals that directly compensate the producers. Most original video has to make do with a trickle of advertising revenue, modest sales from iTunes, or nothing at all.

That brings us to books, where the situation for independent authors is very different. Amazon will pay as much as 70% of the revenue from sales of eBooks to self-publishing authors, and other resellers will typically pay 35%. Compare that with the typical 10% to 12% royalty on wholesale price paid by publishers, and self-publishing starts to look very appealing. Yes, the self-publisher has to pay upfront for editing and design, but many publishers recoup those costs before they start paying royalties. In addition, unless you're a top author, publishers will do little or nothing to promote your title, so you'll have to hire a publicist or do the work yourself.

It's true that print still represents the majority of book sales, but the market is quickly shifting to eBooks. Some of the most popular titles are already selling almost as many copies of eBooks as print, and heavy book readers are adopting eBooks faster than any other group. The majority of book sales are likely to come from eBooks by the middle of this decade.

So, where does that leave publishers? Penguin, for one, is getting into the self-publishing business through its Book Country online service. In addition to charging upfront fees for formatting and designing eBooks, Book Country demands a hefty fee for distributing self-published eBooks to online bookstores--which self-publishers can do themselves. Other publishers are experimenting with "augmented" eBooks--containing audio, video and animations--which they believe are beyond the ability of self-publishers to create. There are two problems with that approach:

1. Companies such as Vook are launching eBook creation tools that will allow self-publishers to make augmented eBooks, and
2. Sales figures to date suggest that there's not a big market for augmented eBooks. For example, Vook's original strategy was to publish augmented eBooks itself, but the company couldn't sell enough to sustain its business, so it's now focusing on licensing its platform to others.

To be sure, publishers still provide valuable services, especially for top-tier authors--but book publishing is the first industry where creators (writers) can compete effectively with distributors (publishers). In the near future, the big publishers will likely find themselves focusing on two categories:

1. New releases from "A-list" authors that can command high prices and sell tens of thousands of copies in print, and
2. Milking their existing backlist for eBook reissues, bundles, and other ways of delivering "old wine in new bottles".

Some mid-tier authors may find a home with smaller specialty publishers, but almost everyone below the "A-list" will have to self-publish. We're likely to see some self-publishing authors join together in "United Artists"-like organizations to create "quasi-publishers" that perform some of the functions of existing publishers, such as design, publicity and promotion. The participating authors could serve as editors for each other.

By mid-decade, we're going to have far fewer and smaller "old-style" publishers. On the other hand, we'll have far more self-publishers and quasi-publishers that are performing most of the tasks previously done by publishers themselves. The industry power will reside with resellers such as Amazon and Barnes & Noble in the U.S., and their equivalents in other countries around the world.