Putting the profit in nonprofit

If you didn’t see, yesterday, Amrita and I (mostly Amrita, credit where credit is due) published a piece on WNYC’s new “broadcast to podcast” strategy. One thing that I keep mulling over — and that didn’t make it into yesterday’s story — is what duty a public media organization has to its employees, audience, and financial backers.

The corporatization of public media has been a reality for a long time, and leaders at NPR and WNYC cited a significant drop in corporate sponsorship as a major source of their current financial strife. NPR’s sponsorship revenue fell $30 million. New York Public Radio, WNYC’s parent organization, experienced a $7 million decline in corporate sponsorships this year, CFO Armando Gutierrez said at an all-staff meeting last week.

I have talked about this before, but when the economy gets wonky, corporations cut their marketing budgets before they cut operations and staff, so ad-based businesses get the brunt of that impact (and then end up laying off staff). But it’s not just macroeconomic pressure. NYPR’s corporate sponsors include companies like IBM and Netflix, and many of the individual sponsors and board members come from fields like private equity and corporate law. Let me be clear: that is not a bad thing — that is why they have money to spend, and they could do a lot worse than spending it on public media. But they do bring a business perspective that may not entirely jibe with a nonprofit’s mission (this is not limited to media nonprofits, by the way).

CEO LaFontaine Oliver gestured toward this tension in a September 29th meeting with WNYC’s union bargaining committee. Staff suggested cost-saving alternatives like furloughs and salary reductions. A staffer claimed that one WNYC host even suggested to management that everyone who makes over $250,000 take a 10 percent pay cut. As previously reported by Hell Gate, Oliver said that executives forgoing bonuses counted as a pay cut, and NYPR spokesperson Jennifer Houlihan Roussel told Hot Pod it accounts for 15 percent of their compensation. But Oliver also broadly rejected the notion that salary reductions across the board would make enough of a difference and that nothing short of a restructure would suffice. Further, Roussel told Hot Pod that sponsors were pulling from podcasting more than from broadcast and digital.

“Our work is too essential for us to be struggling. In the market that we’re in, I feel an extreme amount of pressure to get to these donors and explain to them why this organization is worth their investment,” Oliver said at the meeting. “That is one thing that I think has hurt our ability to get that cut from the big donors because they say, ‘If you don’t have a balanced budget, I am not funding deficits.’”

So there’s the issue — sponsors want to see a nonprofit that is run like a business, and that means they are not willing to wait out podcasting’s troubles or hold on to staff that are not contributing to the bottom line.

It’s an unfortunate situation. Nonprofits exist in order to provide the kind of services that contribute to the public good, even if they are unprofitable. (Isn’t that what the money is for??) Current and former employees we spoke with feel like this corporate pressure is antithetical to their mission, and they are right on the merits. But there is something that Oliver said that I can’t really shake.

“Nonprofit is our tax status. It is not our business model,” he said. “Without margin, there is no mission. If we can’t find ways, even as a nonprofit, to make sure that the things that we do are sustainable, we won’t be here for the people who depend on us.”

It’s not a flattering soundbite, but it’s not wrong, either. And it reflects a dynamic that is going to shape the future of public radio, which will invariably affect the podcast industry as a whole. If the only podcasts we get from WNYC and other member stations are those that have air time (and there is only so much air time to fill), then we are going to see a real decline in the number of deeply reported, substantive podcasts for which these outlets are known. What’s going to be left? A sea of inane celebrity chat shows? I really hope not, and Jake never lets me be too much of a downer, so let’s just call it a “maybe.”

I know a lot of you work, or have previously worked, in public media, so if you have thoughts on this corporate-nonprofit tension, feel free to reach out! I would love to hear from you.

Spotify for Podcasters debuted new features this week for creators, most notably allowing them to direct people on the best way to listen to their shows. On a podcast’s landing page, creators can now highlight an episode as the “best place to start.” They can also recommend two (and only two?) other pieces of media, like an album or audiobook, that relate to the podcast. The update also includes expanded listener and monetization analytics. The changes are part of an overall revamp of Spotify for Podcasters first announced at Podcast Movement back in August.

According to new data from Listen Notes, the number of podcasts created in 2023 is even lower so far than in 2022, which already represented a big drop from prior years. Pulling data from publicly available RSS feeds, Listen Notes found 160,821 new podcasts in 2023, compared to 241,182 in 2022 and 738,494 in 2021. It’s also worth noting that the number of new podcasts has decreased each month this year since March.

But there is a bright spot — the rate at which people are abandoning their podcasts is also decreasing. The number of “dead’ podcasts, or podcasts for which the RSS feed has been deleted or has been marked as completed, is below 20,000 this year compared to more than 50,000 in 2022. And the number of podcasts that published an episode topped 675,000 — more than double what it was the year prior. So it seems that even if fewer people are starting podcasts, they are doing so more intentionally than in the past.

That’s all for now! I’ll be back tomorrow with little bites from the week.