How NPR Leapt Forward in Proximity

In March of 2008, the United States’ national public radio system (NPR) seemed to have a fatal and too common choice: to bet on the past rather than the future. It’s the kind of decision that has initiated the fall of many once-great companies: Toys “R” Us, Polaroid, Borders, Macy’s, RadioShack, and BlackBerry, to name a few.

The pattern often begins with a shift in the “point of demand” that the incumbent chooses to ignore. BlackBerry ignored that the point of demand of mobile phones was shifting from IT managers to working consumers who started to demand they be allowed to bring their own devices to work. For innumerable retailers it was the shift from stores to online. For Polaroid and Kodak, it was the shift of demand from paper to digital.

When the point of demand shifts, some companies cling hopefully to the possibility demand will shift back. Others follow the point of the demand, shifting how they produce and deliver value.

By 2008, NPR had been following an historical shift in how people were consuming radio. As podcasts started taking off, NPR was early to the game. They had launched their podcasts three years earlier, offering a collection of nearly 200 programs. They quickly could claim 5 million downloads. When an NPR fan, a college student, launched an NPR Facebook page in 2008, NPR quickly took over its management.

Conflicting ambitions

But the organization’s digital media ambitions conflicted with the ambitions of their independently owned and operated member stations who saw their audiences being swept away. The rift between NPR and its member stations reached a breaking point. In March of 2008, the NPR board (composed of radio stations and other public members) decided to part ways with the CEO, Ken Stern, who had been aggressively pushing NPR to leap ahead in new media.

Though officially the separation was mutual and amicable, a Washington Post article reported, “People at NPR said, however, that Stern and the organization’s 17-member board had clashed repeatedly over several of Stern’s initiatives, including NPR’s expansion into new media. Those initiatives often riled station managers, who saw them coming at the expense of serving the hundreds of public stations that pay dues annually to NPR.”

It seemed this 37-year-old public institution was heading for irrelevance.

Walking the line between innovation and tradition

However, after going through a line of CEOs in the years after Stern, NPR named Jarl Mohn as CEO in 2014, bringing much-needed stability to the organization and setting the stage for record-high ratings and five of its best years in its 50-year history.

Mohn brought with him an understanding of the importance of innovation and of expanding into the digital world, but he also believed that, contrary to what many people were saying, terrestrial radio was not dead. And so he managed to walk the fine line between innovation and tradition, creating a strategy that focused both on growing digitally and on giving traditional radio the attention it needed.

Mohn also “placed great emphasis on collaborative initiatives with member stations,” earning their support and making huge strides in reducing tensions and increasing trust, something his predecessors had failed to do.

NPR’s unique strengths

In addition to a supportive CEO, NPR also had some unique strengths that made it different from the Kodaks and BlackBerrys of the past. First, its funding model was actually quite novel. Thomas Hjelm, NPR’s chief digital officer, likes to point out that NPR was the first “crowd funding” site. Long before Kickstarter, Indiegogo, or GoFundMe, NPR was funding itself by donations from its audience. “They are not paying for something. They are funding,” Hjelm says. Your funding model significantly influences the strategic options you will see and consider.

Second, half of NPR’s board is composed of smart, forward-thinking leaders from a variety of industries. Today, for example, it includes Neal Zuckerman, partner and managing director of the Boston Consulting Group; Howard Wollner, retired senior vice president of Starbucks; Carlos Watson, CEO and co-founder of a global digital media company called OZY Media, Inc.; and Jacqueline Reses, head of Square Capital and chief people officer of Square. Diversity of leadership, blending perspectives across sectors and experiences, increases a company’s innovativeness and resilience.

How media consumption has evolved over time

Radio was evolving. It was splintering. It was changing form. To see this graphically, I conducted an analysis of the percent of US households that use different forms of media over time. Pulling data from the Pew Research Center, supplemented with other sources, I mapped out how media consumption was already changing by 2008 and would rapidly evolve. The point of demand, as you can see, would soon explode into diversity of channels. (Note we do not have data for every year in the graph below.)

While traditional broadcast radio demand remains only slightly down at 90% of US households, we see the rapid rise of people consuming radio on their phones and via podcasts, channels that play well to NPR’s strengths in producing audio content.

But you also see the rise of social media platforms. Facebook, the largest social media platform, would rise to touch 70% of Americans, but platforms like Pinterest, LinkedIn, Snapchat, and WhatsApp would quickly steal consumers’ eyes and ears. More recently, TikTok has swiftly taken hold, indicating how rapidly new forms of consuming media can emerge, rise, and fall. Smart speakers (not included here) are another recent phenomenon.

In other words, the point of demand is becoming much more a dynamic moving target than a channel a company can build a steady business model around.

The spectrum of NPR’s strategy

And NPR has responded. With the speed and agility of a new-tech media firm, this public service has proven its prowess at following closely as the point of demand moves.

Hjelm thinks NPR’s strategy has a spectrum. On one end you have content as an event. Decades ago, a family might all sit around a radio at a particular time to listen to a program together. Today, you might turn on NPR during its popular “Morning Edition” program driving to work or “All Things Considered” on your commute home. At the other end of the spectrum you have people discovering and accessing content on demand, getting podcast recommendations from friends, say, and listening to them while they are working out. NPR seeks to be relevant across that entire spectrum.

They were one of the first to integrate with smart speakers like Amazon’s Alexa. Today, you can say “Alexa, play NPR” or “Play Marketplace” or “What’s the news” or “Play my local NPR station” and immediately get the content you want while cooking in your kitchen (as I do often).

NPR Kids TikTok is popular among the young kids who flock to that platform. Its more popular Twitter accounts (NPR, NPR Extra, and NPR Politics) are followed by over 10 million people. Its Facebook page has 7.3 million followers. Its NPR One app is considered a breakthrough in digital media. The app allows you to listen to live streams and pick out shows you like, and as it learns your preferences, it starts feeding you content you might enjoy.

It is fueling this strategy also with a cutting-edge backend. In 2018, it acquired the podcasting app Pocket Casts and launched Remote Audio Data (RAD), an open-source technology built in collaboration with other content creators to share listening metrics of podcasts.

It fills these channels with content ideally suited for modern digital consumption. Through production studios on two coasts and its network of over 1,000 independent stations, it is able to produce pieces that can be cut, combined, curated and shared in multitudes of ways.

Conclusion

If a non-profit public institution can pull this off, you should be able to as well. As history shows us, what you need to overcome is not technological prowess, but a willingness to fight the urge of complacency, the courage to embrace the fact your industry is changing, the true desire to listen to and follow your consumers as their behaviors change, and the strategic acumen to play to your strengths.

As I wrote in a prior blog, the future will be shaped by those who embrace proximity: the idea that the production and provision of value moves ever closer to the point of demand.

Consider the following:

• Point of demand: How are your customers’ behaviors changing?
• Provision: What channels are emerging to deliver your value?
• Production: How can you produce value that is fluid enough to follow your ever-changing customers through ever-changing channels?

Photo by bongkarn thanyakij from Pexels