An advertising downturn, timed with fiscal year planning of many public stations could create a double whammy…
By Paul Marszalek
While there isn’t complete consensus among economists that we’re heading into a recession, there is plenty of buzz that we are.
That buzz has been enough to spook advertisers, and the resulting pullback in spending is already having ramifications in the media industry.
Buzzfeed (which includes Huffpost) has axed 12% of its staff – around 180 people. AMC Networks shed 20%, Gannet 6%, and CNN, which is also under pressure from a leveraged buyout, is making deep cuts.
Closer to home, NPR has instituted a hiring freeze as it looks to save $10m by next September. Overall NPR anticipates a $20m deficit driven by an underwriting slowdown. NPR specifically mentioned that it would pump the brakes on hiring a new chief content officer. More on that in a moment.
Many public stations have non-calendar fiscal years. For example, university licensees often have June/July fiscal years. The timing of a recession, when combined with a non-calendar fiscal can sow the seeds of much longer term pain for public radio.
Here’s why: Let’s say a station with a June/July fiscal stops spending now in anticipation of a slowdown in early to mid 2023. As has happened before, new initiatives, content, and innovation get tabled — not only for the remainder of the current fiscal year, but then potentially for the next fiscal year as stations play things conservatively.
That could mean riding the brakes until calendar 2024, slowing innovations, initiatives, and content development for a pipeline that’s already pretty dry.
That’s a mistake.
Coming out of the COVID pandemic, stations have worked hard to return to normal. But normal was 2019 — which increasingly looks like ancient history. Stations should have been working on a vision for 2025.
How will commercial radio handle a recession? Who knows. With an inferior business model and having already cut to the bone, it would be no surprise to see more simulcasts, stations changing hands as values plummet, or even a large company sell-off.
Public radio could write a different story. Stations need product – new product – to keep paying members engaged through a downturn. However, that’s not likely how it will play out. Job preservation is natural and compassionate. In some cases, such as in union shops, there’s not much of a choice.
However, circling the wagons around job preservation, legacy projects, and traditional resource allocation should be discouraged. Instead, stations need to get aggressive, dumping sacred cows that don’t deliver ROI. The focus needs to be on the future, exciting the fan base, and building the brand — not on trying to return to whatever was happening almost four years ago.
As for NPR postponing the hiring of a chief content officer? The decision will play well with the current staff, but it will cost the organization over time so NPR should reconsider the idea.
With the turbulence created by the combination of changing audience behavior, changing audience demographics, and economic pressure, a chief content officer is something media organizations should be seeking out, not tabling in the name of cost-cutting.