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.] [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. 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) 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 Usually are the cause when leading firms fail – not sustaining innovations

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

6. Disruptive Technologies in Radio

7. Disruptive Innovation The pace of technological progress generated by established players inevitably outstrips customers 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 Innovators 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 TiVos 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 Everyone is baking their own cookies Hail Mary method of funding depreciation 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) 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 Policy support of public broadcasting less assured Our esteem is an asset that can be leveraged or squandered Our esteem is an asset that can be leveraged or squandered Other public service entrants entering electronic media, usually using disruptive technologies 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. Consultants 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 listeners 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 Consultant 1019 Border Lane, Moscow, ID 83843-8737 208-892-9445 haarsager@moscow.com www.technology360.com Assoc. V. P., Educational Telecommunications & Technology Northwest Public Radio, KWSU-KTNW-TV, WHETS, ISS Washington State University Box 642530, Pullman WA, 99164-2530 509-335-6530 e-fax 888-455-1070 haarsager@wsu.edu