Disruptive Technologies and Public Radio Jobs

1. Disruptive Technologies and Public Radio Jobs Dennis L. Haarsager Digital Distribution Implementation Initiative and Northwest Public Radio

2. Digital Distribution Implementation Initiative • Funded by CPB • Tasked to coordinate large-scale technology initiatives and to update 1992 and 1997 work on digital scenarios • Runs from 11/2001 through 10/2003 • Scope includes both radio and television • Web site: www.technology360.com

3. 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

4. Disruptive Technologies • [Technology here means the processes by which an organization transforms labor, capital, materials and information into products and services of greater value.] • Innovations that often result in worse product performance, at least in the near term. • Bring to market a very different value proposition (typically cheaper, simpler, smaller and frequently more convenient) • Usually are the cause when leading firms fail – not sustaining innovations

5. ESTABLISHED Photographic film Wireline telephony Full-service brokerage Campus-based instr’n Medical doctors MRI/CT scanning Offset printing Cardiac bypass surgery DISRUPTIVE Digital photography Mobile telephony Online brokerage Distance education Nurse practitioners Ultrasound Digital printing Angioplasty Established vs. Disruptive Technologies From Clayton M. Christensen, The Innovator’s Dilemma

6. Disruptive Technologies in Radio

7. 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

8. Environmental Scan

9. Electronic Media Today • Conglomerates dominate ownership and control diverse distribution outlets, with both “horizontal” and “vertical” operations and pricing advantages • Users are taking control of when they access programming • Subscriber-based economic models are competing with ad-supported (and donor-supported) ones

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

11. Public Broadcasting Today • “Everyone is baking their own cookies” • “Hail Mary” method of funding depreciation • Usage strong compared to other public service providers (11.8B person contact hours annually for public radio, 5.8B hh contact hours for PTV) • Policy support of public broadcasting less assured • Our esteem is an asset that can be leveraged or squandered • Other public service entrants entering electronic media, usually using disruptive technologies

12. Radio In Five Years • Local ownership of commercial stations will have all but disappeared • AM/FM digital broadcasting established, but acceptance uncertain • Lack 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

13. Strategic Investment Scenarios Investments may be individual or collective

14. Collective Investment Modalities • Toolkits – activities or tools stations can use to achieve best practices without need for collaboration • Service Clouds – stations outsource significant activities created for specialized purposes • Colonizers – efforts to operate public broadcasting mission elements independently with or without station involvement

15. Scenario 1 – Sustaining Investments • Make strategic investments in initiatives that sustain the legacy (broadcasting) business • Tends to maintain operational independence • Preserves as much “gross tonnage” of public service as possible, at least in the near term • High investments in “Toolkits,” somewhat lower investments in “Service Clouds,” little in “Colonizers”

16. Scenario 2 – Repositioning Investments • Make strategic investments in initiatives that reposition a station in new directions consistent with historic mission • Capacity and scale created at collective level • Emphasis on editorial (programming) rather than operational independence • Increased investments in “Service Clouds” and “Colonizers”

17. 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

18. 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.

19. 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