Transcript The Enthusiastic Skeptic: Disruptive Innovation and Public Radio Dennis L. Haarsager Digital Distribution Implementation Initiative & Northwest Public Radio.

The Enthusiastic Skeptic:
Disruptive Innovation and Public Radio
Dennis L. Haarsager
Digital Distribution Implementation Initiative
& Northwest Public Radio
Digital Distribution Implementation Initiative
CORE WORKING GROUP
 Ed Caleca, PBS
 Jeff Clarke, KQED
A strategic investment
initiative funded by the
Corporation for Public
Broadcasting.
 Dennis Haarsager, DDII
consultant; KWSU/KTNW,
NW Public Radio
 Byron Knight, Wisconsin
 David Liroff, WGBH
 Pete Loewenstein, NPR
 Jim Paluzzi, Boise State
Radio
Joint
Radio
Television
External
Multidiscipline Experts Group
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Jon Abbott, WGBH
Brenda Barnes, KUSC
Rod Bates, Nebraska
Joe Campbell, KAET
Scott Chaffin, KUED
Beth Courtney, Louisiana
Vinnie Curren, WXPN (now CPB)
Tom DuVal, WMRA
Tim Emmons, Northern Public
Radio
Fred Esplin, Univ of Utah
Glenn Fisher, KTCA
Jack Galmiche, Oregon
John King, Vermont
Ted Krichels, WPSX
Jon McTaggart, Minn Public Radio
Paige Meriwether, KUED
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Steve Meuche, WKAR
Peter Morrill, Idaho
Meg O’Hara, WNET
Maynard Orme, Oregon
Allan Pizzato, Alabama
Lou Pugliese, onCourse
Don Rinker, Alaska
Meg Sakellarides, Conn Pub R-TV
Bert Schmidt, WVPT
Jonathan Taplin, Intertainer
Kate Tempelmeyer, Nebraska
Tom Thomas, SRG
Mike Tondreau, Oregon
David Wolff, Fathom (now
Sunburst)
Art Zygielbaum, Nebraska
Disruptive Technologies
Roadkill Menu: AM Stereo, FMX, RBDS,
Betamax, 8-tracks, 5¼” Diskettes, MS-DOS,
Local phone operators, mom & pop ownership
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 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
From Clayton M. Christensen, The Innovator’s Dilemma
Established Vs Disruptive Technologies
ESTABLISHED
DISRUPTIVE
 Photographic film
 Digital photography
 Wireline telephony
 Mobile telephony
 Full-service brokerage
 Online brokerage
 Campus-based instr’n
 Distance education
 Medical doctors
 Nurse practitioners
 MRI/CT scanning
 Ultrasound
 Offset printing
 Digital printing
 Cardiac bypass surgery
 Angioplasty
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 lowerperformance 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 advantages
 Users are beginning to take control of when they
access programming
 Subscriber-based economic models (e.g., HBO)
are competing with ad-supported ones
Radio Today
 Terrestrial radio remains strong, but landscape is
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littered with failed radio technology enhancements
Ownership consolidation widespread since ‘96;
pubradio competing with stations with 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
Pubcasting’s Diverging Fortunes
 Terrestrial digital transition is market-driven for
radio; mandatory and market-driven for TV
 National content producers in public radio is
strong mix of licensees, independents and NPR;
licensees or licensee gatekeepers dominate in
public television
 Public radio listening and members have
increased, while PTV viewing and members are
steadily declining; revenues generally following
the same vectors
 Public radio players have explored alternative
distribution platforms to a greater degree than
have PTV’s
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
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
Our Urgencies
 “To be or not to be” for public television
 “To be all we can be” for public radio
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 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
Scenario 1 – Sustaining
 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”
Scenario 2 – Repositioning
 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”
Diverging Investment Possibilities
 Public radio should be able to make strategic
investments in both the sustaining and repositioning
directions.
 Public television, because of greater investment
costs and a declining economic vector, will likely
have to choose between these directions.
Consultant’s Provocations 1
 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
Consultant’s Provocations 2 (IMA)
 Most broadcasters treat the Internet as a sustaining,
rather than disruptive, technology innovation. Most
indicators, however, point to it being the latter. How
do we design services differently in each world?
 If we consider the Internet as a disruptive
technology for broadcasters, what investment and
service strategies should we follow in delivering IP
services?
 How do we exploit the emerging Wi-Fi and other
wireless data capacities?
Contact Information
Dennis L. Haarsager, DDII Consultant
1019 Border Lane, Moscow, ID 83843-8737
208-892-9445 • e-fax 206-770-6100
[email protected]
www.technology360.com
Associate Vice President, Educational Telecommunications & Technology,
Washington State University
Box 642530, Pullman WA, 99164-2530
509-335-6530 • e-fax 888-455-1070 • [email protected]