Sent: Wednesday, November 16, 2005 4:47 PM
To: Yasko, Stephen M.
Several things jump out for comment from your otherwise very cogent and valuable survey and comments on podcasting.
• Podcasters make us waste money! Only 21% of podcasters actually listen to every podcast they download. And only 37% listen to most of what they download. Worse, in financial terms of the bandwidth required to service these listeners, 19% listen to “less than half” or “just a few” of what they download, leaving 22% listening to half of what they take off the buffet table. My, the sounds of money being flushed down the toilet haven’t been this loud since when we thought public radio listeners would love on-line chats with the hosts!
• Podcaster Addicts don’t exist, but pigs at the trough do. While slicing the data this far down makes it statistically unreliable, heavy podcasters, subscribing to 5 or more podcasts, listen to very few of them. 80% listened to half, less than half or very few. 0% listened to all of what they download.
Unless you have an unbelievable amount of traffic on the podcasts you are hosting, I can't imagine that the bandwidth bills you are seeing could be this much of issue. If they are, you are being overcharged and need a hosting service that is in the business of delivering streams and downloads for a competitive bulk price.
Though you really can't compare the efficiency of service via transmitters to online methods, bandwidth prices have been dropping every year since 2000 and and are now a very affordable commodity, even for individual public broadcasters and independents like me. We use a California company called STREAMGUYS for this. We deliver hundreds of gigabytes every month and the cost is really minimal. Of course, we have a mostly paid service, but even if you are aiming for memberships it should be pretty easy to cover the raw distribution costs. See below for taking the next step.
So what does this all mean? I’m not sure. Except that this is a very costly game to play with no sign that there is any real value in it to turn listeners into members. After all, even if you put a membership pitch in the cast, you’ve barely got a 50/50 chance it will be heard, let alone acted on.
Paul Marzeleck was criticized at the PRPD for suggesting that we charge for podcasts from non members. Frankly, I think he’s on to something. If I could independently set up a per download charge (not Audible, not NPR, not iTunes affiliated) where I could openly and honestly tell people that their fee directly and entirely supported the creation of the content they are downloading, I would set it up in a minute.
You CAN set up direct payments to your station independent of any of the companies you mention, and in my opinion, you should. It's relatively easy, and though it won't take 'a minute' you can do it in a few weeks of organized work. Streamguys offers a couple of methods to do this, and there are several other service providers who provide a range of customizable monetization schemes for delivery of digital content, including Entriq, The Platform, Live365.com and others.
HOWEVER....you should be very clear that you are crossing a line into an entirely new business when you do this.
You are currently a public radio station experimenting with providing Internet service as an add-on to your legacy distribution model and trying to tie it to your existing business model. But as soon as you take the step into charging for access you become an "Internet Content/Service Provider" competing with every other digital content provider.
Essentially, online content delivery is a new business -- with new methods, new responsibilities, and new competencies. Your situation is further complicated by the music licensing situation, which limits what you can do with download schemes like podcasting, vs. streaming for which we have existing licenses and defined payments.
While your existing broadcast business gives you a platform to produce, promote and market your Internet business, to develop this new business you will have to become a kind of "online application integrator." You will have to define service policies, prices, choose 3rd party service and transaction processing providers, and pull them together into a working service.
I've been doing this since 2001 with our archive of music programming as a paid streaming service, and I have a pretty good perspective and on-the-ground experience with what it takes. But frankly, after 4 years of experience we are still learning (or unlearning) basic things every week, so you need to take a long-term view of the whole venture. On the other hand...if you don't do this, you and every other local station risk becoming "incumbent roadkill." So it's not really a choice.
What concerns me is that we have a desire to provide more services to our listeners, especially in these new technologies like podcasting. It’s right and proper to claim this space, but on the other hand….we have CPB telling us that our net revenue is on a downward slope. Given the cost of these activities and the less than optimistic membership, and even underwriting, conversions are we shooting ourselves in the foot by not tying specific revenue generation to Podcasting and other innovation? After all, what would an underwriter pay for a medium where 50% of the downloads are not listened too?
In my opinion there is very little possibility that you will generate enough traffic from your own original content to aggregate an audience that will be attractive to any national underwriter. Local underwriters might be found for specific types of locally focused programming, but it's a tough fit for music stations.
However (again, my opinion) you could create enough value within your chosen music niche to make it viable for individual listeners to pay for service -- assuming that the quantity and quality of your offering was compelling to them. Whether you choose to do this on purely voluntary basis, or force users to pay for access is your decision. The entire area of payments for digital entertainment services is still in a nascent and undefined state, so you would be pioneering the new models along with everyone else.
One more fear. Until the internet came into full bloom, stations generally saw issues of bypass only in terms of their relationship with NPR: Major donor solicitations, streaming NPR programming on npr.org in real or delayed time, NPR supplying programming to Sirius radio. Podcasting does allow stations to extend their brand into other geographic areas with just one decision by the listener. Streaming at least requires the listener to make the decision each time to consume the out of market content.
One thing is for sure, bypass is now defined as a relationship between stations in differing markets as well as between stations and national organizations. When I look at the number of folks who are subscribing to podcasts from stations from other markets, I worry about TSL erosion for WTMD. Of course we each strive to be the best in servicing our listeners, and that now means making sure they don’t subscribe to content other providers are distributing with similar content and different packaging. Someone call Mark Burnett, it sounds like someone could get voted off the dial if they don’t win the immunity challenge.
Mark Burnett won't save you -- there is no immunity. In fact, there's absolutely no question at this point that Internet media delivery is going to completely overturn all the old local and national monopolies on both audio content and service. It's only a matter of time, and the clock is ticking faster these days as broadband and wireless Internet services become ubiquitous.
In my opinion, the correct response is NOT to worry about obsolete issues like "bypass" and waste time defending your local service against the inevitable erosion of its old franchise. Start thinking inclusively rather than defensively, and figure out how to superserve both your local and a new national/international audience with content that builds on your artistic and cultural choices for broadcast service. This means adding value to your service by aggregating and delivering more content and providing better service -- not trying to prevent your listeners from doing what comes naturally. Instead, give them the incentive to do it naturally with you.
The best model for this is any station with a unique format who is leveraging their local talent and and production expertise and is providing a valued, growing Internet service. WKSU's "Folk Alley" service is just one example, and they are still using the voluntary contribution model. KCRW is another poster child for successful leveraging of local talent and original content, as are KQED, WNYC, WGBH and others. If the product is not serving an unmet audience need, growing in unique listeners and total TSL and is revenue positive, then you can be certain that underlying concept is wrong.
As is often said, This Changes Everything.
Absolutely correct. The question is....what are you going to do about it?
I'd be happy to speak with you about our experience building a niche music service online and recommend others you can talk to. With your permission, I'd also like to quote from your original letter on my blog.
Regards :: SH