0 1 Acknowledgements We would like to express our deepest gratitude to the WFIU staff for their support and assistance throughout the process. We especially acknowledge the guidance and advice from Perry Metz, Marianne Woodruff, Eva Zogorski, Nancy Krueger, Cary Boyce, Mia Partlow, Eoban Binder, and Heather Reese. We would also like to thank Anna Christopher Bross, Director of Media Relations at National Public Radio in Washington, D.C., for her insight on future federal funding and political support of public radio. Finally, we want to acknowledge Dr. James Perry, School of Public and Environmental Affairs, for his supervision of this project and continued dedication to our professional development. Cover Photo: Ferrell, S. 2011. http://www.politicsdaily.com/2011/03/17/house-votes-to-cut-federal- funding-of-npr/. Last accessed 11 April 2012. 2 3 Table of Contents Executive Summary ............................................................................. 3 Why NPR Matters to America .............................................................. 7 Key Questions & Answers .................................................................... 8 Political and Public Support for National Public Radio ...................... 11 House Support 11 Senate Support 13 Presidential Support 13 Public Support 14 Member Station Relationships ........................................................... 16 Member Station Relationship with the Corporation for Public Broadcasting 16 Member Station Relationship with National Public Radio 16 Inter-Station Relationships 17 Member Stations Relationships with Universities 17 WFIU’s Underwriting Relationship with Indiana University 19 Recommendations: IU Underwriting 22 Member Station Communication and Technology ............................ 23 Measuring Website Effectiveness 23 Recommendations: Using Google Analytics 24 Innovative Solutions for WFIU’s Website’s Layout 28 Recommendations: Website Layout 29 Social Media and On-Site Community Engagement Strategies 31 Recommendations: Social Media 37 Member Station Communication 38 Communication between the Station and its Underwriters 41 Federal Funding ................................................................................ 43 Overview of the Federal Appropriation Process 43 Importance of Federal Funding to NPR Member Stations 44 Allocation to Member Stations from the Corporation for Public Broadcasting 44 Community Service Grant (CSG) Process 45 Philanthropy ..................................................................................... 48 Current Philanthropic Profile for WFIU 48 Philanthropic Sources of Revenue 48 Recommendations: Grants 49 Donor Retention and Expansion 50 Additional Fund Raising Opportunities 54 WFIU Fund Drives 55 Revenue Generated through the Website 60 Recommendations: Revenue Generated through the Website 63 Recommendations: Improving Website Utilization 64 Alternative Revenue Sources ............................................................ 65 The Value of Alternative Revenue 65 Underwriting and Production Support 65 Recommendations for Underwriting and Production Support 68 Other Revenue Not Including Underwriting and Production Support 69 1 Recommendations: Additional Web-Advertising and Support 71 Alternative Revenue Ideas from Other Stations’ Current Practices 72 Station Research 73 Recommendations: Future Other Revenue Generation 74 Content Analysis of WFIU’s FM Radio Programming ....................... 76 Overview 76 Data and Results 77 Recommendations: FM Radio Content 83 Content Analysis of WFIU’s Web Programming ................................ 85 Overview 85 Process for Evaluating Programming Content 85 Recommendations: Web Programming 85 Instability & Risk: Current Outlook, Changes and Future Forecasts . 90 Overview 90 Strengths, Weaknesses, Opportunities, and Threats (SWOT) Analysis 90 Federal Funding and Member Station Vulnerability 92 Political and Public Support 93 Current Levels of the Corporation for Public Broadcastings’ Grant Allocation to Member Stations 93 Recommendations: National Level Funding 96 Economic Outlook 96 Individual Income 96 Personal Income and Per Capita Personal Income 97 Unemployment Rate and Personal Consumption Expenditure 97 Federal Individual Income Tax Revenue 99 Corporate Income 99 Federal Budget 100 Technology and the Web 101 Stress Test Implementation 104 Recommendations: Future Research 107 Five Major Technological Trends on WFIU’s Horizon 108 Member Station Innovative Practices .............................................. 110 Introduction: Capstone’s Innovative Practice Committee 110 A Modern Paradigm for Public Service Media: Incorporating Innovation 110 Examples of Industry Innovation and Collaboration 113 Recommendations: Content Creation and Delivery 115 Conclusion ....................................................................................... 118 References ........................................................................................ 119 Appendices ....................................................................................... 128 2 Executive Summary National Public Radio (NPR) was founded to bring a noncommercial radio option to Americans, providing programming that would be “responsive to the interests of the people.” Public radio is an essential source of information, an advocate of cultural awareness, and a catalyst for community engagement. In previous years, public radio was supported politically because it was seen as having significant public benefits. Facing recent budget constraints, legislatures have begun to threaten decreases of funding to public media. In this absence, public radio could disappear, as providing the service is unprofitable for private entities. Therefore, government support of public radio is needed to ensure nationwide access to high quality, local, educational, and cultural radio content and should be continued into the future. To ensure the existence of public radio, this paper addresses the most critical issues facing modern public radio. I. What will happen to NPR if federal funding is eliminated? The continuance of federal financial support for NPR is largely dependent upon the level of congressional political support. Decreased political pressure to cut federal spending will help ensure funding stability to local stations. However, if federal funding is eliminated, the majority of member stations will survive. Stations receiving a smaller fraction of their annual budgets from the Corporation for Public Broadcasting will fare better than those who are heavily reliant upon federal community service grants. Local stations would be forced to either change their operations to conform to the new fiscal environment or increase other sources of revenue to compensate for the difference. Additionally, NPR headquarters would lose significance. A decrease in demand for national program content from local stations would reduce the influence of the headquarters office. Consequently, there will be less incentive for stations to maintain working relationships with the national office. Less reliance on NPR will create increasingly independent member stations. II. What is the role of the website in augmenting traditional radio in the 21st century? Public radio stations like WFIU can utilize websites not only to archive traditional radio broadcasts, but also to display additional content. Diversifying the radio and website will attract new users and demographics to the station. In addition, stations can utilize social media via the website and Google analytics to measure content popularity, gather user feedback, engage the local community, and understand the audience. Public radio websites also provide new opportunities for revenue generation and strategic long-term planning. Commercial advertisements, proper placement of donation buttons, and the use of social media should improve website donations for local stations like WFIU. III. What other revenue sources are available to augment public radio’s revenue stream? More than any direct fundraising method, station managers say that cost control is the key to successful fundraising. To keep costs low, stations practice bartering with other organizations to cover expenses such as venue rentals, catering, talent, and more. Informing constituents of responsible cost management practices can increase donor confidence and augment contributions and public support. Increased segmentation of target audiences can also increase the efficiency of marketing efforts and facilitate the use of new, more cost-effective technologies. 3 Web gifts and syndication are two of the most popular methods used to increase earned income. While WFIU has experienced a steady increase to annual revenues due to these methods, it could do more to augment these earnings. Establishing a clear and accessible donation page on the website and increasing the promotion of original programs available for purchase through PRX are two strategies of increasing earnings. Some stations have had success with special, signature fundraising events; however, events are not feasible for stations that have limited staff resources or cannot afford the risk of an unsuccessful turnout. Other stations identify the provision of blind reading services, which make print material available to those with visual handicaps. IV. What is the nature of WFIU’s relationship with Indiana University with specific regard to funding, content, and membership? The relationship with the IU Foundation, departmental underwriting,