Disruptive Technologies and Public Radio Jobs

Dennis L. HaarsagerDigital Distribution Implementation Initiative and Northwest Public Radio

Digital Distribution Implementation Initiative

Funded by CPBTasked to coordinate large-scale technology initiatives and to update 1992 and 1997 work on digital scenariosRuns from 11/2001 through 10/2003Scope includes both radio and televisionWeb site: www.technology360.com

Disruptive Technologies

Not all get traction… AM Stereo, FMX, RBDS, Betamax

Some do, but get displaced by later disruptive technologies…

8-tracks, 5¼” Diskettes, MS-DOS, local mom & pop ownership

Disruptive Technologies

[Technology here means the processes by [Technology here means the processes by which an organization transforms labor, which an organization transforms labor, capital, materials and information into capital, materials and information into products and services of greater value.]products and services of greater value.]

Innovations that often result in worse product Innovations that often result in worse product performance, at least in the near term.performance, at least in the near term.

Bring to market a very different value Bring to market a very different value proposition (typically cheaper, simpler, smaller proposition (typically cheaper, simpler, smaller and frequently more convenient)and frequently more convenient)

Usually are the cause when leading firms fail – Usually are the cause when leading firms fail – notnot sustaining innovations sustaining innovations

Established vs. Disruptive Technologies

ESTABLISHEDESTABLISHED

Photographic filmPhotographic film

Wireline telephonyWireline telephony

Full-service brokerageFull-service brokerage

Campus-based instr’nCampus-based instr’n

Medical doctorsMedical doctors

MRI/CT scanningMRI/CT scanning

Offset printingOffset printing

Cardiac bypass surgeryCardiac bypass surgery

DISRUPTIVEDISRUPTIVE

Digital photographyDigital photography

Mobile telephonyMobile telephony

Online brokerageOnline brokerage

Distance educationDistance education

Nurse practitionersNurse practitioners

UltrasoundUltrasound

Digital printingDigital printing

AngioplastyAngioplasty

From Clayton M. Christensen, The Innovator’s Dilemma

Disruptive Technologies in Radio

Disruptive Innovation

“The pace of technological progress generated by established players inevitably outstrips customer’s ability to absorb it, creating opportunity for start-ups to displace incumbents.”“There are times at which it is right not to listen to customers, right to invest in developing lower-performance product that promise lower margins, and right to aggressively pursue small, rather than substantial, markets.”

From Clayton M. Christensen, The Innovator’s Dilemma

Environmental Scan

Electronic Media Today

Conglomerates dominate ownership and control diverse distribution outlets, with both “horizontal” and “vertical” operations and pricing advantagesUsers are taking control of when they access programmingSubscriber-based economic models are competing with ad-supported (and donor-supported) ones

Radio Today

Terrestrial radio remains strong, but landscape is littered with failed radio technology enhancementsOwnership consolidation widespread since ‘96; pubradio competing with stations that have better cost profiles and centralized best practices operationsSatellite radio and real-time web streaming are emerging as playersAsynchronous distribution (on demand, peer-to-peer sharing) of audio also gaining foothold; first radio “TiVo’s” appearBecause of group ownership and general availability of 7x24 program services, national voices are increasingly replacing local ones

Public Broadcasting Today

““Everyone is baking their own cookies”Everyone is baking their own cookies”

““Hail Mary” method of funding depreciationHail Mary” method of funding depreciation

Usage strong compared to other public service Usage strong compared to other public service providers (11.8B providers (11.8B personperson contact hours annually contact hours annually for public radio, 5.8B for public radio, 5.8B hhhh contact hours for PTV) contact hours for PTV)

Policy support of public broadcasting less assuredPolicy support of public broadcasting less assured

Our esteem is an asset that can be leveraged or Our esteem is an asset that can be leveraged or squanderedsquandered

Other public service entrants entering electronic Other public service entrants entering electronic media, usually using disruptive technologiesmedia, usually using disruptive technologies

Radio In Five Years

Local ownership of commercial stations will have all but disappearedAM/FM digital broadcasting established, but acceptance uncertainLack of spectrum for public radio even more acute*Use of other platforms and new forms of distribution will grow, but are unlikely in this time frame to displace much listening to terrestrial stations*But new developments like Software-Defined Radios and the new 700-MHz broadcast service could change that

Strategic Investment Scenarios

Investments may be individual or collective

Collective Investment Modalities

Toolkits – activities or tools stations can use to achieve best practices without need for collaborationService Clouds – stations outsource significant activities created for specialized purposesColonizers – efforts to operate public broadcasting mission elements independently with or without station involvement

Scenario 1 – Sustaining Investments

Make strategic investments in initiatives that sustain the legacy (broadcasting) businessTends to maintain operational independencePreserves as much “gross tonnage” of public service as possible, at least in the near termHigh investments in “Toolkits,” somewhat lower investments in “Service Clouds,” little in “Colonizers”

Scenario 2 – Repositioning Investments

Make strategic investments in initiatives that reposition a station in new directions consistent with historic missionCapacity and scale created at collective levelEmphasis on editorial (programming) rather than operational independenceIncreased investments in “Service Clouds” and “Colonizers”

Consultant’s Provocations

Form “virtual broadcast groups,” digital distribution companies that operate key functions of current stations within and across markets (include NPR or PRSS as eligible service provider)Create public service “digital condominium association” with other state, national and international advanced networks (e.g., Internet2)Task a system economics panel with devising strategies to redeploy [insert ambitious amount here] of existing system revenue from “cookies” to capitalization and audience-sensitive priorities

Provocations for Programmers

Jobs that, from a listener’s perspective, can be performed anywhere may be endangered.Most public radio stations lack sufficient scale for true best practices in all functions; many are so small everyone has multiple functions.Evaluate what local value you and your team are providing. Move investments from things that can be done better (or as well but cheaper) elsewhere to things that are done best in your community.

Contact Information

Dennis L. Haarsager, DDII Consultant1019 Border Lane, Moscow, ID 83843-8737208-892-9445 • haarsager@moscow.com

www.technology360.com

Assoc. V. P., Educational Telecommunications & TechnologyNorthwest Public Radio, KWSU-KTNW-TV, WHETS, ISSWashington State UniversityBox 642530, Pullman WA, 99164-2530509-335-6530 • e-fax 888-455-1070 • haarsager@wsu.edu