An Analysis of the NPR Network with a Short Budget Gap: The Role of Advertising in the Digital Media and the Technology Industries’ Prospects
NPR moved this week to trim 10% of its staff and stop production of three popular podcasts in order to close a $30 million budget gap.
On an annual budget of roughly $300 million, Lansing says, revenues are likely to fall short by close to $30 million, although that gap could reach $32 million.
“We’re not seeing signs of a recovery in the advertising market,” Lansing says in an interview. “Nothing is nailed down yet except the principles and what we know we have to reach.”
Lansing has also put significant stock into what he calls the NPR Network, which calls for greater unity of coverage and digital initiatives, such as newsletters, streaming, podcasts and more. It is intended to align the strategy of its often fractious member stations with one another and NPR itself and to allow NPR, for the first time, to raise money digitally from its audience in concert with those stations.
I don’t anticipate that it would be like a haircut across all the divisions, because it’s not management. “Management involves making tough decisions and committing to strategy.”
Lansing, formerly a top television executive for the E.W. Scripps Co., says whenever an economic slowdown appears imminent, marketing budgets get slashed. Corporate sponsors are not permitted to call for radio listeners to purchase goods or services, which makes advertising on NPR’s side of the radio business a form of underwriting.
Last year, the network booked $134 million in such corporate underwriting, a record built on strong growth in podcasting revenue in recent years. Fearing a tepid economy, Lansing and his corporate team projected that revenue would stay flat for the fiscal year that began October 1.
Within a few weeks, Lansing became convinced that projection would be unreachable. The network made a total of $20 million in cuts in late November.
“We were doing everything we could against the tide and couldn’t keep clipping our costs as the revenue kept slipping,” said Lansing. There was nothing that we could have done to fill that hole.
Tech companies that also rely heavily on advertising are undergoing layoffs too. Amazon, Google, Meta and Microsoft have announced more than 50,000 job cuts combined in just the past few months. Yet the tech and media industries’ prospects stand at odds with a tight labor market and low unemployment more broadly.
When announcing the earlier cuts, Lansing said the network would have to make difficult choices and do less with less. The show How I Built This is licensed to Amazon’s streaming services and it brings in 8 million dollars a year.
“It’s always difficult in these situations, and I don’t want to minimize the impact that it will have on our colleagues and in some cases, you know, our ability to do what we do,” Lee says. “However, when you think how we look out longer term, right, not just for 20 years, but several years out, it’s really about building a sustainable financial future for NPR.”
Disclosure: This story was reported and written by NPR Media Correspondent David Folkenflik and edited by Acting Chief Business Editor Emily Kopp. No corporate official or news executive was involved in the review of the story before it was posted.
The network also canceled a comedy podcast unveiled just a year ago called Everyone & Their Mom, a spinoff of the mainstay radio program Wait. Don’t tell me.
A number of long-time NPR staffers have chosen to leave. Some familiar voices are among them, including Senior European Correspondent Sylvia Poggioli, who has been with NPR for 41 years. The network did not make any specific announcements, instead giving those who were leaving the ability to share the news.
“We’ve tried to keep the essential things that will keep us going forward, and it has been a challenge,” said NPR’s senior VP of programming and audience development who oversees the network’s entertainment and music content.
NPR says that all of its investigative and enterprise narratives series will stream under the umbrella of the investigative podcast series Embedded. Officials say that it will become a reliable source for listening to NPR content.
“It’s been emotional, I have to tell you that,” said Pat O’Donnell, executive director of SAG-Aftra’s Mid-Atlantic division. The news and programming people are mostly represented by the union. “The financial paperwork and the meetings with SAG-Aftra proved they needed to do something. They had to do something. It’s real.”
O’Donnell said the company agreed, in negotiations with the union, to enhance the severance package for laid-off workers above what was required by the collective bargaining agreement.
O’Donnell said that they had a lot of thought behind it. “Nobody will be happy. I believe they told us that they would negotiate it and that they carried it out to their best ability.