1. PUBLIC RADIO ONLINE SUBSCRIPTION and PAID ACCESS WEB SERVICES Why Public Radio needs them : How they work S T E P H E N H I L L

2. Running head (section title) Subscription Services for Public Radio 2 the Network Era : a sea change for broadcasters

3. Running head (section title) Subscription Services for Public Radio 3 "disruptive technology" paradigm new medium less appealing at first, gets better rapid rise to dominance after it meets needs of mainstream audience hardware in place; broadband booming; wireless networks coming soon digital distribution near tipping point already digital, vs. analog radio HD digital radio will be too little, too late

4. Running head (section title) Subscription Services for Public Radio 4 coming soon: integrated portable devices cell phone WI-FI data receiver AM/FM/Satellite? radio PDA features media player with massive storage desktop integration for automatic transfer and backup; facilitates use of downloads gets media from online service providers works everywhere

5. Running head (section title) Subscription Services for Public Radio 5 new competition will cause audience fragmentation same as public TV when cable became pervasive already happening due to format focusing, but hidden by core growth; will accelerate future listeners will be less loyal -- they will have many more choices! voluntary subscriptions less appealing when competing with bundled services and special interest suppliers doom and gloom scenario: competition and fragmentation lead to downward spiral -- declining revenue, worsening service, fewer choices

6. Running head (section title) Subscription Services for Public Radio 6 what Internet program delivery can mean for public radio expand historic service model with additional programming deepen service to core audience with on-demand content support niche audiences without compromise offer programming by subject, genre, type, or audience end technical limitations on program capacity end daypart limitations logical destiny of the discrete program aggregation model

7. Running head (section title) Subscription Services for Public Radio 7 web delivery pros allows unlimited channels n time-shifted, alternative, archival content allows on-demand use n still underestimated! a true paradigm shift for listeners "metamedia" platform : audio plus text and graphics n delivers additional information easily serves niche audiences as well as core n no need to choose, alienate specialty listeners "locks in" the subscription model n builds ongoing provider -> audience relationship

8. Running head (section title) Subscription Services for Public Radio 8 public radio advantages historical n 50 years of experience with subscriber model n 50 years of aggregating quality programming n 50 years of delivering small audience content functional n ability to promote web services on-air n ability to cross promote all services to community n ability to mix local & regional with national & international content n multiple income streams : non-commercial status allows public and institutional funding as well as direct subscriber support n non-commerical status qualifies for royalty concessions on use of copyrighted media

9. Running head (section title) Subscription Services for Public Radio 9 public radio weaknesses underfunded even for 'normal' operation n limited, insufficient development capital generally small or overloaded staffs n little or no headroom to support intensive web production lack of technical expertise in online development n will require use of 3rd party services to start culture of quiet acceptance, middle-aged torpor n little incentive for an entrepreneurial culture

10. Running head (section title) Subscription Services for Public Radio 10 Q: 'free' or subscription? A: both. give away primary air stream online to increase access give away any on-demand programming that can be funded by normal membership revenues or external underwriting use expanded content and on-demand access to drive a premium class of membership for bundled content CPB fears re system defunding? Highly unlikely. Current services remain; additional 'free' services can be offered online as well. Only premium content delivery services that expand the system's mission are charged for.

11. Running head (section title) Subscription Services for Public Radio 11 'Public Radio Online' : core models Marketing Model : deep service and expanded choice n on-demand access n alternate formats n access to archives Distribution Model : web syndication n same as satellite for broadcast syndication, but targeting station web sites n multi-channel medium means virtually unlimited inventory, so program direction (though possible) is less critical Business Model : tiers of service n free service over the air n additional free services on station websites n expanded service by subscription

12. Running head (section title) Subscription Services for Public Radio 12 3 tier program delivery service Tier One : free on-air service. n formatted News/Information or music services to local communities. Revenue comes from voluntary memberships, public and foundation grants and institutional support. Tier Two : additional free online services. n a stream of the station's air service, PLUS other free streams and on-demand programming underwritten by public or private funding sources. Revenue comes from online fundraising. Tier Three : "Public Radio Online" -- premium bundled programming package n revenue comes from subscriptions or prepaid access n in depth archives of all the major syndicated programs n multiple side streams or alternate music channels n on-demand programming from across the system

13. Running head (section title) Subscription Services for Public Radio 13 The Bundle: a premium service package must create an overwhelming listener value proposition components n time-shiftable versions of core daily programming n alternate channels or 'side streams' n niche audience services : Latino, Asian, Native, local ethnic, etc. n on-demand Archives of blue-chip PR content. Example: INTERVIEWS : Fresh Air, ATC, ME, Living On Earth, etc. MEDIA REVIEWS : Fresh Air, ATC, local shows STORIES : This American Life FEATURES : ATC/ME, Living On Earth, others MONOLOGUES : Keillor, Codreascu, Joe Frank, others SPEECHES : Alternative Radio, Commonwealth Club, Press Club MUSIC CHANNELS and ARCHIVES: The Thistle & Shamrock Celtic Afropop World World Café AAA Hearts of Space contemplative/world Echoes, KCRW eclectic

14. Running head (section title) Subscription Services for Public Radio 14 key issues in monetizing the audience-broadcaster relationship who controls the user relationship? n station = the primary point of contact for listener n content provider = the producer or program source n service provider = the online program aggregator which way does the money flow? n from station to content provider same as conventional syndication, but metered n from station to service provider major syndicators like NPR, PRI, MPR, BBC Public Interactive, PRX, independent syndicators n from content provider to station commission models (new)- station gets paid for program usage n from service provider to station 'bundled' commission models - station gets paid for bundle usage

15. Running head (section title) Subscription Services for Public Radio 15 1st generation payment model flat rate/unlimited subscription systems created by the adult industry for web services components n web hosting n stream hosting n transaction processing (VeriSign, iBill, Paycom, etc.) supplies online customer interface and phone support supports recurring monthly & quarterly billing

16. Running head (section title) Subscription Services for Public Radio 16 tracking usage key enabler of 2nd generation systems PROS n enables flexible service plans (measured by the minute) n facilitates royalty reporting n used to calculate cost of measured syndication services (flat-rate/unlimited services still require tracking and accounting) n adds security, prevents fraud CONS n privacy issues when linked to personal accounts n tracking and data usage policies need very careful consideration n complicates user experience if not done properly

17. Running head (section title) Subscription Services for Public Radio 17 flat rate vs. incremental usage plans conventional wisdom : flat rate preferred over incremental usage plans by consumers n true, but art is in the configuration of the offer maximum usage paradox : even if you offer flat-rate/ unlimited service, people use only what fits their schedule n service pricing can be determined by average use if you cap usage intelligently, it will not deter subcriptions n limits need to be set high enough so it 'feels unlimited' tracking controls the heaviest users n tames "bandwidth-sucking vampires" n can still offer unlimited service for a premium price

18. Running head (section title) Subscription Services for Public Radio 18 tracked/measured subscription systems enable more sophisticated user service plans n limited use plans (1000 minutes/month, rollover minutes etc.) n pay per listen (with drawdown credit account) n prepaid minutes (one-time use, gifts, promotions) n subscription (recurring monthly or quarterly charges) enable web-only syndication ! n tracks usage, allows syndicators to charge for actual traffic n allows distribution of income across multiple syndicators n tracks usage, allows syndictors to pay commissions to station components : n web hosting : everything appears on the station site n stream hosting : CDNs necessary for subscription services n transaction processing : credit cards, online accounts, etc. n authentication/authorization/reporting/customer support

19. Running head (section title) Subscription Services for Public Radio 19 authenticate, authorize, track, report authenticate n maintain user account database n verify user is who they say they are n pass user data to transaction service provider as required authorize n recalls user privileges, enables access to media n manages user "session," pops up messages if needed track n record user choices n measure stream usage n send to tracking database report n web accessible interface for data access by stations & syndicators n used for royalty calculation by syndicator and/or station n supports precision research customer support n account help, tech support

20. Running head (section title) Subscription Services for Public Radio 20 subscription service network diagram flow diagram for user relationship with content provider or syndicator; (diagram for user relationship with station would vary slightly) streaming server station website transaction gateway online reports tracking plug-in authentication network subscriber credit card company content provider or syndicator merchant bank provides web interface electronic transfer "register" content auth orize authenticate authentication and clearing tracking data station's bank $ commissions Verisign, iBill, Paycom, PayPal MindPort, etc. $ $

21. Running head (section title) Subscription Services for Public Radio 21 Entriq media authorization network This is the vendor Hearts of Space is working with to build these functions. Microsoft will offer this functionality eventually in the Windows Media platform.

22. Running head (section title) Subscription Services for Public Radio 22 Entriq network feature set

23. Running head (section title) Subscription Services for Public Radio 23 conclusions and prognosis system has 3-4 years to act before it is hit by a 'perfect storm' of competition from other online program services targeting desktop listeners and improved portable devices public radio is extremely well-positioned to offer competitive subscription and prepaid access services system must resolve the philosophical issue of charging for premium services and test pricing plans and thresholds creation of bundled subscription services will require industry-wide cooperation and CPB support rights and reporting issues will clarify soon and will not be a big problem going forward, especially for subscription services