Brandi Carlile. Photo courtesy of the artist.

The 12 Annual NON-COMMvention, ,which already appeared to be busting at the seams, has added additional music performers and announced the schedule of sessions.

Confirming are Brandi Carlile, Twin Cities newcomers Poliça, Rebecca Ferguson, and Jonathan Wilson, formerly of Eisley.

They join a star-studded lineup that includes veterans Willie Nelson, Sinead O’Connor, Norah Jones, Joe Jackson, and many more May 17 – 19 at World Cafe Live next to the WXPN studios in Philadelphia.

The schedule of events is taking shape, kicking off earlier than usual with a special Wednesday night performance for early arrivals featuring rock legend Paul Weller on May 16. Weller’s set will start at 10 p.m.

In addition to the musical performances, attendees will enjoy an array of sessions that kick off Thursday morning, including:

* The Digital State of the Union with Media Mechanics/TheTop22.com’s Paul Marszalek
* The NON-COMMversation with WXPN’s Dan Reed featuring pundit Bob Lefsetz
* A David Dye-hosted World Cafe taping with Joe Jackson
* Widening Your Circle of Influence — a guide on how to get the most for your station
* Competition, Partners, or Both
* Community Radio Roundtable
* Local, Local, Local, and
* The Music Meeting with Songlines’ Sean Coakley

Registration is now open, with early bird rates in effect until 5pm April 6.

The complete musical lineup can be found an the NON-COMMvention Artist Lineup Page and schedule details will be posted as they become available in the NON-COMMvention Schedule Page.

Complete details on the event, including hotel and registration can be found by navigating from the 12th Annual NON-COMMvention tab above.

PRX, the innovative startup that connected independent producers with public radio station, is taking another swing at shaking up the public media space.

Together with a $2.5 million grant from the Knight Foundation, PRX will launch PMX — the Public Media Accelerator, a project that intends to incubate media solutions from mission-driven entrepreneurs.

It’s not a new idea, with innovation projects and “entrepreneur in residence” projects all over Silicon Valley and Silicon Alley. But it is generally new to Public Media, and it’s sorely needed.

Media in general finds itself in the Wild West, as consumer habits change and business models crumble. Among the questions is where to start?

Issues in pubcasting range from technology to systemic issues, such as the increasing marginalization of radio affiliates at the hands of the major content producers and the almost existential crisis facing public television. Let’s hope PMX isn’t just about building apps.

PMX is correct to identify that the most like source of solutions to those problems will be found in individuals within the system who are otherwise unsupported by their workplace (read: banging their heads against the wall), or just as likely, individuals or groups who are outside the public media system altogether.

PMX describes itself as such:

The Public Media Accelerator is targeted at strategic innovation, identifying and accelerating ideas with the potential to transform the field. Modeled on mentorship-driven technology startup accelerators, the Public Media Accelerator will invest in both nonprofit and for-profit ventures building apps, services and media products. Successful projects will be showcased to additional funders and investors, and receive support through a partner, mentor and sponsor network.

$2.5 million won’t go very far, and if done right, it shouldn’t have to. In situations such as these, it’s less about seed money for a project, and more about the Accelerator’s Rolodex. In other words, “You got an idea? I gotta guy for you.” These connections are invaluable in moving projects forward.

Applications open in the Spring. Learn more on the PMX site and in this more detailed story in Pubcasting trade Current.

We’ll have more on PMX and innovation in upcoming posts.

Mumford and Sons with Dawes. Credit Doug Seymour for WXPN.org

Mumford and Sons and Dawes packed the stage for a performance of When My Time Comes as part of the celebration of World Cafe’s 20th Anniversary.

The show was one of many that occurred over the weekend of October 28, with performers that also included Feist, Tedeschi Trucks Band, John Hiatt, Amos Lee, and more.

Thankfully, cameras were rolling and WXPN has just released a clip of the Mumford and Sons/Dawes collaboration.

Dawes with Mumford & Sons – When My Time Comes from WXPN FM on Vimeo.

Derek Trucks and Susan Tedeschi. Credit Doug Seymour for WXPN.org

You can re-live major portions of the 20thAnniversary celebration, as WXPN and World Cafe have archived performances from Indigo Girls, The Jayhawks, Ani DiFranco, Tedeschi Trucks and more on their streaming player.

There are also plenty of photos that capture the moments.

A good place to start is on the World Cafe Tribute Concerts page, and start browsing from there.

Again, our congratulations to David Dye and all involved in this amazing run of success that has lifted the careers of countless artists.

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Robbie Robertson being interviewed by David Dye for an upcoming episode of The World Cafe

Public Radio stations with Adult Alternative music formats converged on the renovated Queen Theater in Wilmington, Delaware Thursday for the 11th Annual NON-COMMvention.

The gathering featured business related meetings, conversations with industry luminaries, and nearly a dozen music performances.

Jimmy Carter and The Blind Boys of Alabama kicked off the 11th Annual NON-COMMvention

Among the many highlights was a conversation with music business veteran Cliff Burnstein of QPrime management and the MOM + POP record label, who told backstories about Metallica and reminded the crowd on more than one occasion to look for opportunities where others have passed.

The musical performances kicked off with The Blind Boys of Alabama, and rolled throughout the day and night, including sets from John Popper and the Duskray Troubadours, Givers, Sarah Jarosz, Todd Snider, Matt Nathanson, Keb’ Mo’, Over the Rhine, The Head and the Heart, and Thurston Moore.

John Popper

Weather threw a wrench into G. Love’s expected appearance, as he was stuck on a runway in Boston, but managed to show for a late-night lounge performance that started at 12:30.

Another major highlight was David Dye’s interview with Robbie Robertson for an upcoming episode of The World Café.

Topics ranged from stories about his days with The Band, fascinating background about The Band’s support of Bob Dylan, and the inspiration and creation of his new solo album How to Become Clairvoyant.

Here’s a brief clip from that interview, where Robbie talks about meeting Sonny Boy Williamson — all in reference to David’s question about the famous “I don’t play no rock and roll” quote attributed to Mississippi Fred McDowell.

Here, Robbie suggests the line became was adopted by others, hearing it himself from Sonny Boy…

The complete interview is expected to air on The World Café in July — it’s a must-hear.

The coveted Webby

The Webby Awards has announced the winners of it’s 15th annual celebration of all things good on the web.

Pandora won the Music category ahead of nominees NPR Music, Pitchfork, and the amazing  The Wilderness Downtown — the beautiful interactive website put forth by the Arcade Fire and Google Chrome. Also nominated was the increasingly popular and interesting Soundcloud — which provides TheTop22.com with its Song of the Week player.

Other music related nominees included the amazing JohnnyCashProject, which was nominated in several categories, including NetArt and Best Use of Video or Moving Image. The Wilderness Downtown won that category.

Radio and Podcasts are a combined category, and NPR took honors of two sites from the BBC, TED, and CNN.

I hired Webby Awards creator and founder Tiffany Shlain years ago to be our internet correspondent for the KFOG morning show. A hell of an entrepreneur and increasingly strong film-maker, I thought I was doing her a favor with her little internet awards party. Little did I know at the time I should have been hitching my career wagon to her!

The Webby Awards is an excellent resource for webmasters, or any content creator, for that matter, as the site not only schools us on how it should be done, but offers countless ideas that ignite brainstorming and creativity.

Check out the various categories, such as the Best Home Page winner (Lego.com), and then quitely weep about how lame your own site looks.

More than 70 categories in total, including Weird, which this year featured the very funny Awkward Family Photos and the genius recipe aggregation site What the Fuck Should I Make for Dinner.

Find at least an hour at WebbyAwards.com, and come away amazed and inspired.

Photo by Nathan Bernier, courtesy KUT.org

Last week, from my office in D.C., I got a call from a friend who was at SXSW.

I confessed, “Have of me is jealous, and the other half is thanking God I’m not there.” My friend replied, “Half of me wishes I wasn’t here, too.”

Is this what it has come to? A few weeks ago we wondered if SXSW had become too big to matter. With 2400 official shows and countless free shows, you have to wonder.

A collection of stories:

The New York Times wrote a story about all the festival-goers pissing off their friends with useless Tweets from Austin. This may not mean SXSW is over so much as it may suggest that Twitter is over.

Then there were the stories from both NPR and Paste about the 100 best bands at SX (that stands for South-by, which is the shortened version of SXSW). Really, only 100?

Or how about this story from a heavily invested NPR, which features Adam Cohen wondering why he was there. Listen here.

And then this one from KUT — South By South-Mess.

Whether you attended or not, trips to the excellent KUT site and NPR site will give you a sense of what you missed.

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Second Update 3/9: NPR CEO Vivian Schiller (no relation) has resigned.
Update 3/9: Ron Schiller, who was to leave NPR in May, has resigned.

With Congress threatening to eliminate the $531 million subsidy for public broadcasting, stations, networks, and content producers are in overdrive to blunt the attack.

NPR is doing them no favors.

The botched firing of Juan Williams sparked a flame, and now NPR fundraising exec Ron Schiller has poured kerosene on the fire. Schiller was punk’d by right wing comedian James O’Keefe, saying on tape that, among other things, that NPR would not be affected much by the loss of funding and in the long run would “be better off without federal funding.”

It’s mind-boggling that this came from the mouth of a fundraising executive not only because it’s so off-message, but also because it’s completely uninformed. Much of NPR’s budget comes from affiliate fees, so for NPR to blow this off is myopic at best.

NPR seems intent on dragging the CPB, PBS, APTS, local stations, and hundreds of content creators under.

Fact is, there’s considerable loose talk in the system about how federal funding makes up only a fraction of the overall operating budget, and how it won’t be missed.

That’s garbage. Often it’s between six and ten percent and can reach into seven figures for some large market stations. Those who dismiss those dollars as not worth worrying about have never sat in the GM’s chair.

At every station, operating costs go up annually. Salaries, health care, rents, equipment, and on and on. Just to stay “even,” a GM needs to add from anywhere between three and nine percent in revenue every single year.

With this cut, just to stay even, they’ll need to add another six to ten percent? Now you’re talking real money.

Sadly, it looks like CPB funding is coming to an end. Even the President’s budget calls for cutting the subsidy to $451 million — a $80 million haircut.

It’s time to look at real solutions, and an obvious but overlooked solution is to link de-funding of public broadcasting to the elimination of the byzantine rules for underwriting.

Many countries have public broadcasters with a mixed commercial model. CJRT (Jazz 91FM) Toronto, for example, is a public station that is allowed to run four commercial minutes per hour. It’s a common practice elsewhere (BBC anyone?).

It’s a hard-to-deny premise for any free-market thinking lawmaker. If you want to de-fund CPB, take the handcuffs off stations and let them monetize in a way that is acceptable to their local audience. Let the market decide.

The National Association of Broadcasters will blow a gasket at the thought, and that’s just fine — they’ll lobby for the status quo.

It’s not far-fetched to imagine KPCC, KCRW, and Classical KUSC combining to suck a clean $20 million-plus out of the Los Angeles market. Imagine what KQED in San Francisco could do.

Admittedly, this idea doesn’t help producers much, but there are other models available to them as well. Just think.

In a post-CPB world, there are other ways of making up the shortfall — like extending pledge drives. But that idea is hardly a winner, and it isn’t one that fosters competition or wakes up a sleepwalking commercial side of the dial.

-Paul Marszalek

We're still pissed the Bears let these clowns into the playoffs to begin with.

Sunday’s Super Bowl drew an audience of 111 million people. Most ever.

Not bad for a dead medium.

In spite of all the doom and gloom about “old media” like TV, sometimes she can still get it done.

Point is, the argument about the superiority of new media versus old media is a bogus one. The winner will always be the one that invests in content.

Rupert Murdoch built an empire in part by methodically collecting soccer broadcast rights overseas, and took that strategy to Fox in the U.S. by grabbing football and baseball rights.

TBS saw an opportunity in Conan, and CBS is willing to give Charlie Sheen $2 million an episode. Today Keith Olbermann signed on with the also-ran Current television channel.

The Olbermann move will be interesting to watch. Averaging just 23,000 viewers in prime time (MSNBC reached more than a million), the channel is available in about 60 million homes. A “fully distributed” channel tops out at about 85 million homes.

If Olbermann can close that gap, the dividends will be significant. Current is a second-tier cable channel that probably costs customers just a few cents a month. Just for kicks, figure that we pay about 10 cents a month for the channel. Closing another 25 million homes at a dime a month would mean a $30 million annual boost for Current. And then there’s the increased ad revenue.

Looking to radio, one finds more evidence that it’s not about the medium, it’s about the content. Stern saved Sirius from certain destruction — even if it cost $500 million to do so. NPR continues to grow because it invests in content.

So that’s the good news. Any medium can benefit from an investment in exclusive content.

However, the major radio consolidators continue their fire sale. On the music side, out are the morning shows, and talent development is largely non-existent. PPM junkies are doing exactly the opposite of Murdoch, TBS, NPR, and Current, turning their media products into commodities.

It may work for a while, but the comps from last year aren’t that great, considering we had election spending this year, and last year was an unmitigated disaster.

The commodity play is a foolish one. If commercial radio stations want to be around much longer, they need to crack open their wallets and invest in the content.

Photo Credit: Martin Philbey

#1 The Audience

Nobody commands more power in Adult Rock than The Audience. The Audience has demonstrated firmly its capability to get what music it wants, when it wants it, on the platform preferred, and sometimes sadly, at the price point it demands.

And in spite of questionable business models, established media companies and entrepreneurs line up to enable The Audience. Razor thin profit margins be damned; more and more people want in.

Screw with The Audience at your own peril.

Deliver a subpar product at the wrong price point, and The Audience will just move on — just as 20 million bought into Sirius/XM, 50 million into Pandora, and an increasing number to Public Radio.

Many radio programmers think they can still outsmart The Audience, pointing to tools such as “M Scores” — which they use in place of true, statistically sound market research. It’s a severely flawed strategy, turning most music radio stations into little more than commodities that aggregate passive audiences.

The Audience knows when it is being conned.

The Audience punished MySpace for its crappy design and lack of interesting new features — they left in droves. MySpace just furloughed its staff for the holidays and is expected to lay off as much as HALF of its staff this week.

With concert ticket prices having become nothing less than ridiculous, The Audience skipped the typical shed show (think commodity) and sought better value at multi-artist festivals.

Concert ticket sales were off 15% last year, so Live Nation announced that they’ll reduce ticket prices — yet another concession to The Audience.

The Audience has options.

In the past year, I’ve facilitated focus groups with core Adult Rock radio listeners in New York, Boston, and Los Angeles.

When these radio fans were asked where else they learn about new music, not only did New York and Boston listeners cite out of market stations (mostly KCRW/Santa Monica, KEXP/Seattle, and The Current/Minneapolis), listeners in all three cities offered up an un-aided laundry list of go-to sources, including:

Pandora, Sirius/XM, NPR Music, Radio Paradise, The Alternate Side (A WFUV/New York project), Grooveshark, iTunes, Blip FM, “That David Byrne Radio Station” (and others on Live 365), LastFM, Slacker, Rhapsody, Daytrotter, Paste, and Pitchfork, just to name a few of the biggies.

The Audience gets a seat at the table.

While the music business struggles to find its way, there is a path worth following — just ask The Audience.

-Paul Marszalek

NPR released a cool set of slides showing usage of their content, hour-by-hour, by platform — right down to the iPad.

Initially, there are no real surprises, and this data serves as something of a baseline to compare against in the coming months and years. That’s when these graphs will be really fun to look at — to see the massive growth on the new media side (or not.)

Basically, we get the big NPR newsmags spiking radio numbers in mornings and afternoons, and usage of online spiking in midday as people hit the site while at work.

A couple of things to be aware of here — don’t get fooled by the size of that red line. The red scale is on the left representing the new media piece is fractional when compared to the radio listener scale on the right. For example, in middays, peak NPR.org usage is at about 75,000. Not bad, perhaps. But it’s a mere 5% of the usage NPR is getting through its 1.5 million midday hourly listeners.

And there’s what might be getting overlooked. The buzz on new media is so strong, in some organizations, the attention given to it is completely disproportionate to the return on investment. As noted in each of these slides, the usage of the new media products is in single digits as a percentage compared to the usage of radio.

Now it may not be that way for long, but that’s the snapshot for today. Remember to also view this as usage for each hour — it’s not a total “cume.” The fact is, NPR new media is being consumed by hundreds of thousands of people. But still a fraction of the 20+ million using the radio side weekly.

Seeing this again in 6 months and next year will be more telling.

(Note, if the slides are too small, hit the “view on slideshare” button in the lower right for a larger view.)

Vivian Schiller at All Things Digital, Courtesy allthingsd.com

They don’t call it National Public Radio anymore. Never mind that the medium is responsible for reaching 28 million NPR listeners every week. Radio is “too limiting” according to NPR CEO Vivian Schiller.

Then there’s Schiller’s belief in an apparently inevitable decline for terrestrial radio. According to the All Things Digital liveblog:

“Radio towers are going away within 10 years, and Internet radio will take its place. This is a huge change and we should embrace it. Mobile will play a big part.”

The more I hear Schiller talk, the more I get the vibe that she views NPR affiliates as an afterthought, despite the fact that radio delivers huge audiences and represents the number one revenue source for the network.

Additional examples:

Commenting on multiple distribution platforms: “We’re agnostic about the way they listen to it. All of our revenue streams work equally well with each delivery method. And to the listener’s ear, it’s identical. So why should we care? Forty percent of weekday listening is in the car, which makes sense. When cars are Internet-enabled, that should be the same thing.”

On whether NPR will charge for online content: “Nope. That’s our mission, to provide this stuff for free. We ask our listeners to contribute, and about 10 percent of them do, pretty consistently. That said, on a B2B level, this could change. Our stations don’t pay for our Web programming right now, but that could change. They get it free with the radio license fees they already pay.”

On what “device” is most important to her: “Of course, I need to praise the ‘magical device.’ It’s ‘all things to all people.’ I do wonder if it’s going to obsolete the iPod touch….We’ve had 300,000 downloads of the NPR iPad app. The trick is to create an app that takes particular advantage of the device.”

Now if I were a GM of a public station, I’d be having a serious Whiskey Tango Foxtrot moment.

Just take those three quotes–

“Why should we care?” — well for one, it directly affects your affiliates, and may, in turn, affect NPR’s bottom line as the current business model is in question.

“Our mission is to provide this stuff for free” — as in, finding money to pay for all this is the affiliate’s problem. Schiller is also confusing “our listeners” with the affiliate’s listeners, assuming that those pledge dollars are due to NPR content, and not possibly based on a local relationship between listener and affiliate.

And the iPad is the most important device? Hello?

You gotta admit, 300,000 downloads of the NPR iPad app when there are only 2 million iPads out there is a pretty amazing number. But Schiller’s answer lays bare the serious problems in NPR’s world view.

They’re reaching 28 million people on radio every week, but the most important device is $600 tablet that, to really operate well, requires at least a $25 per month data subscription?

It is this mentality that prevents NPR from truly expanding its audience. Instead of reaching out to new target audiences, it continues to focus on upper middle class, mostly white, elites.

The fact is, NPR is deploying a direct-to-consumer model, which makes perfect sense — for NPR.

But, as we’ve written before, it spells trouble for affiliates in the nearer term (Would You Give Ira Glass Five Bucks?, Is NPR the New Radiohead?).

Do we really think that those 300,000 early adopters of the iPad app are going to keep writing checks to their local affiliates? We’re betting on some significant erosion there. Second, the mostly younger new media consumers are chilly to the “voluntary tax” membership model that NPR and local affiliates currently employ.

And if Schiller thinks that bigger reach is the answer to the business model, don’t bet the ranch. For the foreseeable future, NPR will be trading analog dollars for digital dimes.

NPR did not hire anyone with experience in radio, so it shouldn’t be surprising that Schiller is a little fuzzy on the public radio vendor/buyer relationship.

The network has shown affiliates the game plan, and it’s up to those local stations to respond accordingly. They’ll either make themselves relevant on a local level, or they’ll fade away.

A video excerpt where Schiller talks more about partnerships with new media journalistic startups than affiliates:

Read the liveblog from the event here.

-Paul Marszalek

Recently I wrote about how my consumption of public radio has drastically changed since my work life changed – splitting my week between New York and D.C.

Out was my loyalty to NYC-based public stations and in was a mix of stations along I-95 and on-demand newscasts from NPR’s mobile app.

Most pronounced was my total switch of non-news programming to time-shifted podcasting, on-demand services, and use of streaming music channels.

Programs like This American Life, RadioLab, Fresh Air, and many others now hit my ears exclusively via my iPhone. If I happen to be driving and want music, it’s KCRW’s Eclectic 24, Classical KUSC, WERS/Boston, or WFUV’s Alternate Side. Again via iPhone plugged into my car stereo.

Sensitive to the plight of affiliates, my radical change in behavior is not lost on me. I’m an Arbitron People Meter Nightmare for what should be my home stations – WNYC, WFUV and now WAMU. I listen to pubradio content all the time, and they get zero credit for it.

Most of my time-shifted shows or services make a little pitch for cash to help pay for streaming – like Ira Glass’s ask for a fiver to help pay for This American Life’s annual six-figure bandwidth bill.

So if my pubradio consumption has changed so much, perhaps my support model should change too.

Get Your Geek On: Radiolab's Jad Albumrad and Robert Krulwich - Best Show on Radio-- By a Mile

In past years, depending on how good a year it was, I’d toss around $300-$500 to a handful of stations in the neighborhood.

That seems very dated now.

I mean, c’mon, am I really gonna turn down Ira’s request to give him a couple of bucks? Shouldn’t I redirect my support for the shows and producers themselves?

Currently, This American Life’s home station, WBEZ/Chicago gets nothing from me. Surely that bums out WBEZ head Torey Malatia. And while RadioLab’s WNYC does, they don’t make that many episodes of the show, which bums me out. (BTW, Radiolab is probably the best radio program in production today—a must listen if you really want to get schooled on how to use the radio medium.)

If I went this route – trying to fund the shows I enjoy, how would I know my dollars would actually go supporting RadioLab?

Since I’m picking off newscasts and All Things Considered stories directly from the NPR app, should I support NPR directly– instead of via the affiliates? Even just writing this idea will likely cause KCRW GM Jennifer Ferro to toss a drink in my face at the next pubradio function.

But of course the good news here is that under my new direct funding model, KCRW would see at least something from me, which they currently don’t.

And therein lies the conundrum. Who to fund, who not to fund? Who are the winners and who are the losers?

The winners and losers are easy to identify. Those who create content win. Those who are simply repeaters for NPR content lose. They’re increasingly unnecessary.

The seeds of this disruption were planted long ago, when stations killed their local lineups on the advice of just a few myopic consultants who valued Arbitron ratings over radio’s last “killer app” – serving the local community.

But that’s another story.

Ira, Torey, Jennifer – the check is in the mail.

-Paul Marszalek

This lovely chart was crafted by plugging in 2009 revenue numbers from a well-known adult rock Public Radio Station.

If you believe in the premise of The Chaos Scenario — where the ever-expanding amount of advertising inventory outpaces demand (and sends rates down), it doesn’t take long to realize that we’re gonna need new revenue streams to make stations go.

The good news for Public Radio is that they’re way ahead of the game in terms of diversification, so commercial stations, take note.

The chart above shows that this pubstation, like most, pulls most (89%) of its revenue from the traditional big three — membership, underwriting, and grants. The PD noted that the underwriting numbers were down by about 8% due to the recession.

Thankfully for them, membership pulled up some slack, and they still had other cards to play.

Because this station invests in the creation of exclusive content, it was able to turn that content into 7% of its annual revenue by syndicating it to NPR Music, other radio stations, and yes, even HD radio. 7% is not a huge number, but in a down year it’s a difference maker. In an up year, it might even prove to be a higher percentage.

In addition to diversifying the revenue streams, it’s important to remember to diversify within the revenue stream. For example, in pubradio, many stations lean on non-profits, arts groups, and concert promoters for underwriting. Stations need to go beyond — start grabbing that beer money.

In late 2007, British rock group Radiohead released their album In Rainbows directly to fans.  Upset with changes at their record label, EMI, the band leveraged the power they held as a content creator in the digital world.

Instead of a traditional release, the band went direct-to-consumer with digital downloads to fans who were allowed to set their own price.

Radiohead was not the first to go this route, but they might have been the biggest, and the move rattled the record industry into finally realizing that the business model was severely broken. Radiohead, benefitting from years of investment from the label and retailers, eliminated those very middlemen that helped it build a worldwide brand.

Now all media feels like the Wild West, with content creators, copyright holders, distributors and affiliates sitting at one big poker table.

NPR could be the next player to go “all-in” with a digital strategy.

All the pieces are in place for NPR – rabid fans, terrific brand, strong content, multiple revenue streams, and a digital strategy that is firing on all pistons.

All indications, from the release of their iPhone app to the increasing use of Associated Press content on it (not local affiliate content) suggest that NPR may pull a Radiohead.

NPR CEO Vivian Schiller, in speeches at recent public radio conferences, promised to work with affiliates to create a business model.

Affiliates are frustrated. Like the record labels and record stores that helped build Radiohead, they’ve spent years building the NPR brand, and every year they pour more money into supporting content that is increasingly available on platforms that compete with them.

Affiliates should be wary. I’m not doubting NPR’s intentions, I’m just measuring my own behavior.

Recently, I’ve started splitting my week between New York and D.C., with the commute turning into a circus of planes, trains, and automobiles. Old listening patterns out, new patterns in.

Actually, it’s radio out, iPhone in. In the D.C. metro, instead of WAMU, I hit the “newscast” podcast on the iPhone App, and cherry-pick All Things Considered stories. Instead of WNYC on weekends, it’s This American Life (from Public Radio International) podcasts on the commute. Yes, even in the car, it’s the iPhone in the auxiliary jack. You get the idea.

Perhaps exacerbating the situation is my realization that most NPR and Public Radio content is not exactly time sensitive. NPR is not strong in the breaking news category, instead built more for reaction and analysis. That’s fine – unless you’re an affiliate, and consumers have the Tivo of radio—allowing them to time shift at will.

In a time when Arbitron’s Personal People Meter measures listening, certainly affiliates will take a ratings hit, leading to lower underwriting revenue. And without those pesky fund drives reminding me to send cash, that revenue stream looks troubled as well.

For years, affiliates listened to a tiny group of researchers and consultants who preached the dumping of local content in favor of the better produced national shows. It was an effective, but myopic strategy, now leaving affiliates with little home-grown content and a potential Radiohead as their main product.

Where this leaves the vast majority of affiliates is yet to be determined.

The current idea being pushed appears to be one of NPR covering national and international news, while strong local affiliates fill in the gaps with equivalent local coverage. That may be a content strategy, but it is not a business model.

What needs attention are ugly things like who owns what and who pays for what.

If you game this out, it gets interesting.

The scenario where the affiliates take a hit is obvious. The scenario where NPR turns short-term gain into long-term pain is less obvious.

In the current business model, affiliates pay fees for NPR programming. NPR would have to be thinking these fees would continue, or a direct-to-consumer strategy could make up for that lost income. Or both.

But if Radiohead represented the power of the content creator, the reverse power play is currently being carried out in the cable television and retail worlds.

When The Food Network and HGTV (Scripps) demanded higher affiliate fees from Cablevision, the cable company called their bluff and simply dropped the networks altogether. Fox similarly went to war with Time Warner but a settlement was reached in that dispute.

We’re likely in the very early stages of an unraveling of the cable television business model. Similar to problems in the record industry, where consumers were forced to buy overpriced albums with few “good” songs, cable subscribers pay more and more for a bundle of channels, few of which they watch. It’s a perfect recipe for consumer revolt.

In the retail world, “distributors” have been flexing their muscles. Drug store chain CVS dropped Energizer batteries in favor of its own brand and Duracell. Costco recently pulled Coke products off the shelves in a pricing dispute, and Walmart has many major brands sweating as they plan to pull more of them in favor of private label products.

In the public radio world, affiliates could leverage their significant power not by dropping NPR programming, but by trimming it back to the newscasts and the major magazine shows.

In reality, it’s unlikely that NPR’s flagship programs would ever get hurt. But the also-rans and especially future launches would be stymied.

With “shelf space” newly available, the market would fill the void. Competitors such as Public Radio International, American Public Media, major market stations, and even independent producers could make headway – provided they came with affiliate-friendly business models.

It all depends on NPR’s vision for the new business model.

And here’s one worth a try: dump the affiliate fee model for the barter model. The standard in the commercial world, affiliates get content for free in exchange for inventory.

Paying less, affiliates are much less likely to be irritable about competing with their supplier.

-Paul Marszalek

Update: Comments and clarifications from affiliates, who asked not to be identified by name or call letters…

* The barter thing. It already exists in…public radio style. Not only do we pay for the programs, but there are national avails and local avails built into the programs that NPR produces (ME ATC ETC) … It gets a little more complicated on national shows that NPR distributes that are produced by other stations. There, NPR has an avail set, the producing station has an avails set and there are local avails. Editor: So unlike commercial radio barter, the producers are already double-dipping.

* I think there is one thing missing from this astute analysis.  About 80 percent of NPR’s revenue is dependent on affiliates (stations) — from corporate underwriting that airs on stations and station dues for programming.  Radiohead could sell direct and make all the money.  But stations aren’t labels…the money goes in the reverse direction here. There is nothing in the digital space that can make up for that kind of cash. No amount of banner ads or video rich displays can make up for 15 second underwriting spots on major market stations.

Editor: Correct on Radiohead, they can eliminate the middlemen without backlash. Not so with NPR. The better analogy here is probably the cable television or retail examples. It’s a great question: Who has the power in this relationship? I’d argue that there is incredible power at the affiliate level, but based on my years in the generally risk-averse community very few are willing to use it. NPR may be betting on the status quo.

UPDATE: And you thought Toyota-thon was the big year-end event. Instead, it appears that radio companies entering into pre-packaged bankruptcies is where the real action is.

Just a day after the third largest radio group, Citadel, filed for bankruptcy, now comes word that Colorado-based NextMedia has filed for bankruptcy. According to the release, there will not be any changes in senior management as a result of the bankruptcy. Naturally.

This poorly conceived group of small and suburban radio stations can’t be long for the world. Broken up, the sticks are perfect for local mom and pop operators.

Read more here.

Sunday, December 20, 2009: The worst-kept secret in radio is finally official: Citadel has entered into a “prepackaged” bankruptcy.

CEO Farid Suleman, pictured, is expected to stay at the helm. Worse, he’s quoted as saying that, throughout the bankruptcy, “business will continue as usual.”

If true, they’ll never emerge from bankruptcy.

In fact, that’s our bet — at least not before asset sales begin. JP Morgan Chase now runs the show as the senior lender. Shareholders are wiped out, including private equity firm Forstmann Little, which had about 29% of the company. They’ll reportedly lose some $250 million.

Unless Citadel adopts a new radio model, such as the one developed by the Radio Workout Team, they’ll continue to struggle mightily. JP Morgan Chase would be wise to realize that this failure was exacerbated by the economy, but it’s not the root cause.

Regent is likely next.

Read Citadel bankruptcy related stories in The Times of London and The New York Times.

In an effort to perhaps finally get a grip on their diversity problem, NPR has hired Keith Woods as VP of Diversity.

For years, NPR’s lack of diversity has long been the elephant in the room, with numerous high and low profile embarrassments. In October, Walt Swanston, the Director of Diversity, quit when one of just two African Americans in the newsroom management was let go.

Though the network has shown incredible growth while the rest of the industry stumbles, surely they’ve left incredible opportunities to expand their audience on the table. Change won’t come easy; I wrote from personal experience previously.

See the somewhat timid announcement from NPR here.

Pandora has surpassed 40 million members. More than 22 million use it weekly.

If you don’t think this affects music radio, you’re very wrong. Radio guys are quick to pooh-pooh services like Pandora or Sirius/XM because they’ve yet to make a profit.

But radio barking about business model problems is a little like the pot calling the kettle black. Commercial radio’s business model may be the worst of the three right now.

Actually, the real damage comes from how the Pandoras of the world are re-positioning music radio as lacking in musical excitement and coming in a very very tired package. 40 million people can’t be wrong.

See the WSJ article here.

Hey NPR, I know this is hard, but as a friend I need to tell you — you really need to get out more.

Look, I know that some of your best friends are black. You’ve made some great hires recently that have started diversifying the workplace.

But you keep showing little signs that while you’re down with the whole EEO thing, when we dig a little deeper, into the content, things are a little less than def.

I first got worried for you when you canceled News and Notes, really the only direct effort you were putting into targeting African Americans. You said that you were going to incorporate such content into the entire slate of programming.

But I wondered.

And it’s not just me. Earlier this month, you took a bit of a beating from Jody Rosen in a Slate post that pointed out that All Songs Considered’s “Best Music of  2009 (So Far)” was just a teeny bit insular. I mean,  among the Top 30 songs and Top 30 albums, only two were from African American artists. Two out of sixty? And while there’s some pretty good stuff on that list, most of it was populated with white male indie rockers that rarely sell out a 600 seat room.

Jody noted that beyond All Songs Considered, the African American music that did hit NPR’s air fell into something called The DORF Matrix:

D= Dead (Michael Jackson)
O= Old (on the comeback trail, or big names from a bygone era)
R= Retro (Sixties Soul revivalists)
F= “Black folks who live in far-flung places, and/or the children of Bob Marley”

Bluntly, Jody nails it. This is the kind of music that white people play when their black friends are coming over for dinner.

The music thing isn’t even my biggest worry, though. I often wonder why you’re in the music business at all. But that’s another story.

What keeps me up at night are things like your recent NPR “Digital Think In,” where everyone got all excited and ran out to San Francisco to think. In your haste, you forget something– and it wasn’t your toothbrush.

Of the 60 invited panelists, how many were African American? Would ZERO be the number?

I’ve been around the public radio system for some time now. I’ve been to your conventions, and been in the hallways of your biggest affiliates. And I must say, those hallways don’t come close to reflecting the general population.

There are days when I think that if this were a public corporation, you might have Rev. Al Sharpton picketing the offices.

Point is, what you’re doing is bad for business. By acting this way, you leave yourself vulnerable to attacks from critics of all shapes and sizes. You don’t need those headaches.

But more importantly, it’s bad for business because it limits your audience to the provincial crowd that loves you as you are.

I said that I was talking from experience, and I am.

When I started at KFOG/San Francisco, the place had a very well-earned reputation as a boys club. With the exception of the receptionist, everyone was white. Only one woman had an office.

Over time we overcame that. In my role, I hired women, blacks, Hispanics, and generally became very smug about how awesome I was in diversifying the place. Until I got warned about a potential EEO violation. Apparently, I had not hired enough Asians. Yep, based on KFOG’s zip code location, I was out of whack with the general population. Who knew? I should have. It was my job to know.

A few years later, when I was at the then-ailing VH1, the idea was floated that if we expanded our audience beyond its 96% white profile, maybe we could get out of our ratings slump.

There was a lot of head-scratching and wondering and a lot of discomfort. How would we do that?

Viacom brought in consultants and other big guns from the outside who knew about these things in hopes of training us to think in terms of diversity. I was on the committee and was off to meetings every week where we attempted to deal with this notion that there was opportunity beyond our current fiefdom. Honestly, they were brutally uncomfortable at times.

But that’s natural. We all want to believe that we’re wide open to new things, but change is difficult. It’s natural to hang with people that share your interests and point of view. But the results of that behavior in business and in life are scary– you can become part of an echo chamber.

Just look at Fox News. A couple of weeks ago Bill O’Reilly had Glenn Beck as a guest. Amazing how they agreed with each other — on nearly every point! You do an admirable job of getting different political views on the air, but I think you get my point.

At VH1, someone had the bright idea that we could do black music stories on, of all things, Behind The Music. It had never been done.

Again, much soul searching. Would anyone actually watch a BTM episode about Biggie Smalls?

When the ratings came in, showing it to be among the highest rated BTMs of all time, everyone lined up to take credit. Well, not exactly. I think a lot of us were humbled for being so stupid for so long — for missing incredible opportunity. A great story is a great story — you know that!

It was a great lesson for me and many others, and while it took years, VH1 did diversify its audience and ratings improved dramatically.

So my advice to you, NPR, is to get some help. There are people who know a lot more about this diversity thing than I do. Bring them in– because it’s not just about HR and hiring practices– it’s about educating the entire workforce to think and see and hear things differently.

It’s difficult and it will take years. No time like the present to get started.

Your pal,

Paul