Mike Starling, NPR VP for Engineering & Operations
Signal Expansion Summit
December 10, 2002
Hotel Monaco, Washington, D.C.
The ACORN Project
What if?
What if the ACORN Project succeeds?
By 2010, NPR will serve over 1,000 Member Stations,
strengthening format focusing and diversity,
and adding 5-10 million new public radio listeners.
Why A Multi-Channel ACORN Strategy?
As the saying goes, "Even the mighty oak was once a tiny acorn."
In the early 1970's scattered AM broadcasters concluded that 30 years of expenses and no measurable audience was enough - and they donated their sister FM stations to the local college. Today, many of those humble beginnings have grown into major public radio stations across the nation. Although we live in a different era, opportunities to achieve substantial growth still abound - if public radio is prepared to act. And if we are prepared to act, are we seeking to achieve growth for growth's sake alone, or is Project ACORN a thoughtful strategy for expanding and strengthening our public service mission?
Over the past two decades an increasing number of public radio leaders have concluded that increased listener satisfaction and use accompanies the format focusing that becomes possible through multiple program services. Case studies and current audience research support this assessment. 1
Recent examples of success stories include:
Colorado Public Radio has experienced 50% audience growth in just over a year of dual stream operation.
Jefferson Public Radio in Oregon has also experienced 50% increases within 18 months of initiating new services in the markets they serve.
Nashville Public Radio, early in their experience with a new AM service, similarly reports strong fundraising and audience response.
Over the past 16 years, Boise State University has grown audience by an average of 40% per year by aggressively adding multiple program services in communities across Idaho.
The Station Resource Group has documented how more stations in a market grows the market, rather than dividing the pie, achieving higher levels of public radio service. See Chart 1.
Overall station cume reveals a similar pattern to the Share Analysis done by SRG. Chart 2 plots cume in the top 50 markets. Double width bars represent markets with a single NPR licensee in each city of license.
A snapshot of NPR Member Stations serving the top 50 markets indicates 23 markets - nearly half - appear to have but a single city-of-license NPR Member Station. In order of market rank they are: Chicago, Dallas-Ft. Worth, Houston-Galveston, Detroit, San Diego, Long Island, St. Louis, Cleveland, Riverside-San Bernadino, Kansas City, San Antonio, Milwaukee-Racine, Providence, Charlotte, Indianapolis, Austin, Greensboro-Winston Salem, New Orleans, Nashville, West Palm Beach, Memphis, Hartford and Jacksonville.
Additionally, two markets appear to have no locally licensed NPR Member Station - San Jose and Union-Somerset-Middlesex. However, as shown in Chart 2 San Jose shows significant coverage from nearby NPR Members despite technically lacking a station licensed to the city of San Jose. These 23 apparently sole-service markets and one no-local-service markets cover 48 million radio listeners.
Among the top 50 radio markets an additional 15 markets appear to be dual service NPR markets. They are San Francisco, Washington, D.C., Atlanta, San Juan, Seattle-Tacoma, Phoenix, Minneapolis-St. Paul, Baltimore, Tampa, Portland, Cincinnati, Sacramento, Columbus, Orlando, and Raleigh-Durham. These markets represent an additional 37 million Americans.
The no service, sole-service and dual service markets cover 85 million out of the 122 million living in the top fifty markets, nearly 70% of the population.
In this first look at potential under-service issues some markets are well served by stations not licensed to the central city. Other markets have achieved good success due to non-Member public stations that improve the appeal and reach of each local public radio outlet. Nonetheless, Charts 1 & 2 clearly illustrate that many of America's major cities are under-served by pubic radio. What can Member Stations do to further expand and improve our public service mission?
Is Time of the Essence?
Public radio exists in a competitive spectrum environment. The Telecommunications Act of 1996 launched a continuing series of acquisition waves. Commercial and religious groups have added stations en masse throughout the late 1990s. This has lead to unprecedented concentration of ownership in local markets and unprecedented debt burdens. Economies of scale and new technologies have lowered operating costs, providing the cash flow to support costly acquisitions. As a result local operating staffs no longer program many markets. The mass deployment of mass appeal, low cost program strategies has lead to a sharp dial contrast favoring public radio service. These factors, along with major news events of recent years, have contributed to public radio's continued audience growth. Meanwhile, commercial radio listening has declined 2 and ad sales continue to be sluggish in the aftermath of September 11, 2001.3
Despite rampant acquisitions among commercial operators, the total number of commercial radio stations grew by only 9.3% from 9,723 in 1992 to 10,629 in 2000. During the same period, the total number of noncommercial stations grew by 44%, with public radio stations growing by 46% and religious stations growing by 123%. See Chart 3.
It is important to recognize that the commercial aggregation phenomenon is not over. The current FCC freeze on AM and FM applications is expected to be lifted in 2003 and there is active discussion about lifting the longstanding newspaper cross-ownership limits as well.
A new phase of activity is likely as merger and acquisition deals that were premised on continued growth in cash flow may now be in danger of default. Group owners nationwide are poised to reassess their current lineup of stations and are likely to shed those that are contributing marginally to the bottom line.4 Many stations of marginal current performance were part of group acquisitions from owners with different market strategies. Of no small significance is the view that the transfer of an under performing commercial frequency to a noncommercial licensee avoids the risk of a future competitive threat.
Economic pressures are not limited to commercial operators. State governments have been increasingly hammered by downward revenue estimates. In local communities and in state legislatures nationwide, every expenditure is being re-evaluated and every opportunity for revenue is being scrutinized. In several markets, existing noncommercial radio stations are being told they will have to reduce their reliance on traditional avenues of state support, often by substantial amounts. In a few markets noncommercial stations are being told they may be subject to outright sale.5
Some believe a window of opportunity is emerging where public radio stations that are ready and willing to pursue service expansion may be able to acquire important station assets, particularly on the AM band. AM stations may have a significant "up-side" potential by benefiting most from the technical improvements of HD Radio (digital radio) which has just been sanctioned by the FCC. For the most part, AM station prices have not reflected the upside of AM revitalization.
Additionally, stations licensed to school boards, or marginally profitable stations acquired in commercial packages may soon be available at bargain prices. All of these factors merge with the Commission's possible opening of new application windows in 2003.
Signal Acquisition Assets & Challenges Ahead
The Public Telecommunications Facilities Program has been instrumental in expanding public radio service to underserved communities. It is no coincidence that the only national survey of coverage designed to pinpoint opportunities for further expansion was commissioned by PTFP and carried out by NTIA's Institute for Technical Services (ITS) in Boulder, Colorado in 1988. In addition to priorities for expanding service to the roughly 14 million Americans who live beyond the reach of public radio, PTFP has demonstrated leadership in addressing under-service in major communities, particularly in strengthening and expanding services in sole-service markets.
Public Radio Capital (PRC) has achieved landmark success in accessing low-interest capital markets and has expanded into a burgeoning consultancy identifying the metrics of service expansion success. PRC is now helping stations organize pro-actively to pursue signal expansion opportunities as they unfold. Understanding the factors that make an opportunity worth prompt pursuit is an area of increasing station interest and system wide importance in the dynamic radio marketplace where typically one in 12 stations changes ownership each year.
Technology advances, particularly digital automation, dramatically lowers the costs to operate additional channels. Stations that have consolidated back-office administrative functions and leveraged technology designing the successful models of low-cost service expansion that seem to apply in even the smallest of markets. There are now some two dozen organizations delivering 7/24 program streams on the Public Radio Satellite System (PRSS), streams that stations are using store, forward and customization technology to add cost effective local services.
Some observers have stated that public radio is hopelessly "late to the spectrum party." Other than the work of PTFP in the 1989 survey public radio has lacked both a national strategy and national leadership to pursue coordinated expansion activities. Meanwhile, boiler rooms among commercial and religious broadcasters have repeatedly surveyed the frequency landscape as soon as user-friendly computer frequency search programs became commonplace in the mid-1990's.
Yet new opportunities emerge with trenchant regularity. We should be ever mindful that a long-term view of service expansion is what led many universities to acquire - often for free - FM stations from commercial operators as late as the early 1970's.
In the future, all paths to the consumer will be in use. Although AM and FM radio has been the backbone of our successes to date, important new distribution channels may emerge on HD Radio 6, on Internet radio 7 , and on emerging wireless Internet services. Additionally, the emerging distribution channels may offer innovative services that have the potential to reshape our operations, as radio operators become disparate content distribution managers in addition to program providers.8 Vigilance is the watchword in assessing the value and direction of these new distribution channels. Public radio stations will need to be there.
As for traditional signal expansion, in major markets it is likely major funds will be required. Despite unprecedented access to capital markets, public radio has no war chest per se to prevent another WDCU from happening on our watch. Building capital resources for signal protection and acquisition is perhaps the most important destination for which we must set out.
Where Do We Go From Here?
It is estimated that well over 100 million Americans are under-served by public radio (living in communities with two or fewer public radio stations). For the NPR Membership as a whole there is the need for a coordinated strategy to document and disseminate the financial, technical and operational readiness requirements for prompt pursuit of emerging spectrum opportunities. And to focus our expansion priorities, there is the need to identify
A full day workshop with volunteers from noncommercial and commercial radio is scheduled for December 2002 focusing on the issues and strategies identified to date. Results will be shared system-wide, with a detailed update scheduled for the A-Reps II Meeting, March 3-5, 2002 in Washington, D.C.
Current NPR staff priorities include:
Refining the technical parameters for a nationwide survey of Americans underserved by public radio
Working with consulting partners to identify the readiness metrics for individual Member Stations to pursue new service opportunities
Building an inventory of innovative technical strategies to achieve and preserve spectrum coverage
Assessing a Request for Proposal to track FCC filings to help protect existing signals
Defining a study to assess the vulnerability of some 800 public radio translator stations to service erosion or loss
Educating community and foundation partners on the need for resources to launch the activity 10.
Project ACORN is the successor to OPERATION SSHAC, an acronym for Save, Shoehorn, Acquire and Convert - initially identified strategies designed to achieve public radio service expansion in the decade ahead. Project ACORN is an easier to articulate moniker and one that focuses on best long-term tactics for future service expansion - Acquisition (of commercial outlets), Conversion (of independent noncommercial stations), Operational Readiness (to assist Member Station nimbleness as opportunities emerge), and Now! (emphasizing the urgency of our collective efforts).
Appendix
A-Reps May 2002
This effort was developed in response to concerns of the NPR Authorized Representatives (AReps) expressed during a two-day strategic planning meeting in May 2002. Dozens of breakout sessions identified and deliberated on specific issues associated with the NPR strategic plan. A referendum prioritized activities for concentrated effort between Member Stations and NPR. Pursuing service expansion opportunities led the individual rankings.11
Increased emphasis on promotion and marketing activities to support audience and system growth was a leading priority as well, and received higher cumulative votes among several related topics.
Mike Starling, NPR VP for Engineering & Operations and Dana Davis Rehm, NPR VP for Member & Program Services were tasked to lead the respective efforts. Full reports on both topics are scheduled for the March 2003 A-Reps meeting detailing strategic directions, progress to date and next steps.
Issues & Strategies: A Collaborative Process Through a series of meetings and conference calls with Member Stations, the A-Reps steering group, several public radio national organizations, and regional meetings throughout the fall of '02, the strategies and deliverables for the ACORN Project have been developed.
The work continues in collaboration with interested stakeholders. At this writing NPR has consulted with Public Radio Capital, the Corporation for Public Broadcasting, the Public Telecommunications Facilities Program, Eastern Public Radio, Public Radio In Mid-America, the NPR Foundation, Western States Public Radio and Southern Public Radio.
Guiding principles
NPR Board member Tim Eby, joined by members of the A-Reps steering committee, suggested adopting guiding principles to frame the project and build a common vision among Member Stations about the emerging activities. The preamble and guiding principles that follow were adopted in August 2002.
Preamble: The overriding objective of this initiative is to grow the audience for public radio in the United States and to increase the audience's use of public radio in order to advance the mission of public radio. As the American public becomes more diverse, NPR Member Stations and NPR have an opportunity to better serve that public. The programming needs of the existing public radio audience can also be more effectively addressed through more defined and targeted formatting.
Expansion of public service is currently limited by the modes of distribution. This limits our opportunities to fulfill our mission for the American public, both in diversity and in depth of program offerings. This project seeks to expand service by facilitating the addition of new channels.
Public service outcomes will vary market by market. The outcome may be the creation of multiple focused formats or services within a market that super-serve the existing audience and/or provide service to new and more diverse audiences.
The scope of this initiative is to assess and facilitate systematic and strategic methods of acquiring new, primarily terrestrial channels. SSHAC is focused on identifying potential spectrum expansion opportunities rather than recommending specific local format and service outcomes.
For the efficient use of public and private resources, the project will strive to:
Utilize existing public radio infrastructure to expand public radio services in local markets, and to strengthen the readiness of existing stations to participate in service expansion.
Where appropriate, facilitate partnerships between public radio stations in multiple station markets or regions.
Encourage the development of new services. Seek to maximize public by helping identify new programming service opportunities in multiple station markets. Support expansion of complementary program service offerings.
Cooperate and collaborate with other entities focused on expansion objectives (such as Public Radio Capital, PTFP, and CPB). Support and encourage relevant incentives to public radio stations striving to extend programming services.
Encourage the rapid development and readiness to deploy capital and operational resources to avoid the loss of existing channels or of new channel opportunities.
Project Acorn Working Committees
Administrative Committee
Mike Starling, Project Manager, VP, Engineering & Operations, NPR
Jan Andrews, Senior Engineer
Bud Aiello, Director of Engineering Technology
John Kean, consulting engineer to NPR
Dana Davis Rehm, VP Member & Program Services
Jackie Nixon, Director, Audience Research
National Coverage Needs & Spectrum Vulnerability Study
Doug Vernier, V-Soft Communications, Cedar Falls, Iowa
Jim Paluzzi, GM, BSU Network, Boise, Idaho
Ed Perry, Educational FM Associates, Marshfield, Massachusetts
Francois Conway, Director, Spectrum Planning, CBC, Montreal
Jeff Hutton, WBUR, Boston
Best Engineering Practices Working Group
John Huntley, CE, New Hampshire Public Radio
Dan Mansergh, Director of Engineering, KQED, San Francisco
Bill Fawcett, CE WMRA, Harrisonburg, Virginia
Francois Conway, Director, Spectrum Planning, CBC, Montreal
Readiness Working Group
Dennis Hamilton & Patti Dodgen, Transformations, St. Paul, Minnesota
Susan Harmon, Public Radio Capital, Muncie, Indiana
Don Mullally, WILL Stations, Urbana, Illinois
Jon Schwartz, Wyoming Public Radio, Laramie
SSHAC Advisory Committee
Terry Green, California Public Radio
John Muhammed, WVPR, Eastern Public Radio
Stewart Vanderwilt, KUT, Austin, Southern Public Radio
Ron Kramer, Jefferson Public Radio, Western States Public Radio
Bill McGinley, Public Radio in Mid-America
Terry Clifford, SRG, Tacoma Park, MD
Vinnie Curren, CPB, Washington, D.C.
Bill Cooperman, PTFP, Washington, D.C.
Mike Starling (mstarling@npr.org)/ 202-513-2484 (cell: 202-744-7655) or
Monitor project status online via http://www.euonline.org/members/acorn/
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