麦肯锡公共电视运营模式

麦肯锡公共电视运营模式2024/3/11麦肯锡公共电视运营模式PROJECTASPIRATIONSANDKEYQUESTIONSIdentifyanddrivemajorchangesthatwillputpublictelevisiononamoresoundeconomicfootingandensureitsfuturesuccessHowsevereandlonglastingarethefinancialpressuresonthesystem?Howshouldwelaunchtheseinitiativesandeffectlastingchange?Whichperformanceimprovementopportunitiesofferthemostpromise?麦肯锡公共电视运营模式CHALLENGES:BOTHSTATIONECONOMIESANDPROGRAMDEVELOPMENTAREAT-RISK *Excludescapitalfundingfordigitalupgrade.Revenuesnotadjustedforinflation** Growthratefrom1994-2001Source: CPBAuditedFinancialReports(AFR),PBSanalysis(dues),AppendixQfromPBSSGwhitepaper(“FundingforPBSNPSProgrammingbyFunderCategory”)$1.93Billion$450Million2001LocalStationEconomy2001NationalProgramFundingProspectsforfuturerevenuegrowth3.5%peryear*3.1%peryear**Historicalgrowth

inrevenues(1990-2001)Current

sizeDeclineinrealtermsduetofallingnetmemberrevenuesAsystemdecision5.4%peryearFlattoveryslowlygrowing(1%aboveinflation)2001StationAssessment$107M麦肯锡公共电视运营模式273.3374.0249.4328.5230.5330.5205.6347.6128.6259.6104.2145.662.994.5TotalPTVsystemrevenue,*1990and2001$MillionsUniversityIn-kindCorporateandfoundationgivingUnrelatedbusinessStateandlocal

fundingFederalfunding**Membergiving * Excludescapitalfundingfordigitalupgrade,additionalcapitalfundraising,endowment,andinterest ** Federalagencygrantsfor2001areestimated(assumed5%growthover2000)Source: AFR;federalreports;PBSannualreports$1.25billion$1.88billionCHALLENGES:ONLYGROWTHAREASAREUNRELATEDBUSINESSANDUNDERWRITING199020013.83.16.64.93.32.9AnnualGrowth%1990-20012.5Driversofgrowth麦肯锡公共电视运营模式CHALLENGES:HISTORICALLY,THESYSTEMHASGROWNTHROUGHDIVERSIFICATION–NOWALLREVENUESOURCESARETHREATENED

Source: AFRs;TeamperspectiveFutureOutlook麦肯锡公共电视运营模式CHALLENGES:NETSTATIONMEMBERSHIPREVENUEHASDECLINEDINREALTERMSSINCE1990 *Allgrowthratesarecompoundannualgrowthrates.Source: AFRs;BureauofLaborStatisticsFundraisingcosts:1.0%Netmembershiprevenues:-0.9%$17millionlostincome$Millions,Adjustedforinflationtoconstant2001$Grossrevenues:0.1%*麦肯锡公共电视运营模式CHALLENGES:DECLINESWILLCONTINUEINNETMEMBERSUPPORTPledge,whichistheengineofnewmemberacquisition,hasseenrisingcostsrelativetonewmemberyieldinlinewithdecliningproductivitytrendsoutsidePTVNetrenewalrevenuewillnotoffsetdecliningacquisitionStationsalreadyhaveamongthenonprofitsector’shighestrenewalratesRenewalmail’sproductivityisflattodecliningDecliningratingsincreasestations’challengeFallingratingslikelycontributetothelongtermmembershipdecline,bothbecausetheprospectpoolwithaconnectiontoPTVshrinksandbecausemembershiprenewalishighlycorrelatedwithaudienceWiththenumberofnonprofitsgrowingtwiceasfastasrealhouseholdcharitablegiving,stationswillbehardpressedtogrowtheirshareofmembers’wallets Source: “DonorCentricsComparisonReportforPublicTelevision,December2000;”DMAFactbook2001;GivingUSA2002AudienceSizeNewMemberRenewingMemberPhilanthropicEnvironmentMembershipRevenueDriversOutlook麦肯锡公共电视运营模式CHALLENGES:STATIONHAVEMETTHESECHALLENGESINTHEPASTBYCONTROLLINGCOSTSACROSSTHEBOARD1990UnderwritingPrograminformationFundraisingManagementand

generalBroadcastingProgrammingand

production100%=$1.80billion7.93.33.83.14.03.8 *ExpensesdonotincludeCPBorPBSoverheadorCPBprovidednonstationgrantsSource: AFR;PBSannualreport,2001AnnualGrowthRate1990-2001Stationsexpense,1990and2001Percent100%=$1.19billion2001NPSduesandservices4.0Nearly1/3ofstationprogrammingandproductioncostsareconcentratedinproducingstationsfornationalprogramming麦肯锡公共电视运营模式2001Actual2010IllustrativeBroadcastopsMembershipEduc./outreachOtherCHALLENGES:REVENUEDECREASESWILLPROMPTREPEATEDPAINFULCOSTREDUCTIONSSource: SABS;interviewsStationcost-cuttingscenario:15%revenuelossAcquisition&schedulingProg.productionGeneral&administrative$10.7millionUnderwritingWebsite76Reduceheadcountby26%,from80to59Cutlocalproductionbudgetby40%,reducingannuallocallyproducedhoursfrom109to65EliminatetheProgramGuideMaintainorslightlydecreaseinvestmentinwebsiteandeducation76$9.1millionIllustrativeexpensebudgetforanaveragemedium/largecommunitystation100%=麦肯锡公共电视运营模式CHALLENGES:CAPITALINVESTMENTSMAYFURTHERREDUCEAVAILABLEFUNDINGOnly$800millionoftheestimated$1.7billiongoalhasbeenraisedDigitalConversionPlansaretoreplacecurrentinfrastructureby2006usingCPB’s$177millionappropriationrequest Source: CPB;APTSDigitalClearinghouse;PBSestimatesNextGenerationInterconnectDigitalMediaNewServicesPlannedcapitalinvestmentsPotentialstrategicinvestmentsBringingthebestofpublictelevisionintoadigitalmediaworldthroughtheuseofdigitalcable,VOD,PVRsandHighDefinitionprogrammingInnovatingandlaunchingnewservicessuchasdistancelearningornewmediaservicesthatmaynotgenerateincome,atleastinthenearterm麦肯锡公共电视运营模式CHALLENGES:NATIONALPROGRAMMING,LIKEWISE,FACESUNPRECENTEDPRESSURESUnprecedentedchangesinaudiencedemographicsandviewingenvironmentIncreasinginvestmentinprogrammingandpromotionfromcablecompetitorsExternalPressuresInternalPressuresLittleornogrowthintraditionalsourcesofrevenueRisingcostsandnewcosts(suchasHDproduction)ResponsesIntroducingnew/limitedseriesandspecialstoslowratingsdeclineIncreasingfundingfromCPBandPBStocoverrisingperhourcostsGreaterrelianceonfully-fundedprogramsPeriodiccostreductionNationalProgramming麦肯锡公共电视运营模式CHALLENGES:NORELIEFFROMTRADITIONALPROGRAMMINGFUNDINGSOURCES * IncludesgovernmentagenciessuchasNSFandNEH,butnotCPBappropriation Source: PBSSG’sEnvironmentalScanofthePBSSponsorshipSalesModelAugust2002;2002figuresareestimatesasof12/12/02Growthintotalprogramminginvestment-NPS/Plus/SIP/Select(1991-2001)$MillionsCorporate,Foundation,privateproducer,other*Station,PBS,andCPB1991-2001GrowthRate7.1%5.4%2.6%266301338267291327370311326379450ProspectsforfuturefundinggrowthSource

1991-2001GrowthRatePercent

Futureoutlook

PBS/stations

4

-Stationfinancialchallengesmakeitimpossibletoincreaseassessmentsabsentverycompellingcase

Corporateunderwriters5

AbilitytojoininrecoveryofTVadmarketthreatenedbyturnoverofkeyunderwritersandcommercialcompetitionCPB

3

Federaldeficits,fiscalenvironmentthreatenrequestedincreases

Foundations

9

Slowergrowthlikelyasfoundationsstabilizegivinglevelsafterrapidincreasesinthelate1990sandshrinkingendowmentssince2000

Independentproducers

8

Continuedgrowthuncertain

Governmentagencies

9

Threatenedbygovernmentdeficits

Other

10

Toosmalltomakeadifference

432麦肯锡公共电视运营模式CHALLENGES:INCREASINGLY,NATIONALPROGRAMMINGDOLLARSHAVELESSLEVERAGERELATIVETOCOMPETITIONGrowthRate

19.9%

Programming

investmentof4

comparablecablenetsAnnualprogramminginvestment,1993-2001$MillionsSource: Kagan'sEconomicsofBasicCableNetworks2002;TVProgramInvestor;PBSNPSoriginalbroadcastandre-upspendingGrowthRate

4.7%Averageinvestment$41M/yearPTV

investment$334M/yearPTVinvestment$450M/yearAverage=$183M/year8:12.5:1麦肯锡公共电视运营模式CHALLENGES:INDEPENDENTCOMMERCIALBROADCASTSTATIONSFACESIMILARPRESSUREANDARERESPONDINGWITHSIMILARSOLUTIONS–INCREASESCALEANDIMPROVEPRACTICESPressureonlocalnews–thecashcowfrom:AudiencefragmentationGreatercompetitionRatingsforsyndicatedprogrammingdownwhilecostsareupDecreases/eliminationofnetworkcompensationDifficultadmarketDTVmandatesThreatfrommoreO&OsIndustryPressuresAcquisition/consolidationtoachievescaleProgramacquisitionTechnologyinvestment(e.g.trafficoperations,salessystems,graphics)Sharedservices(e.g.accounting,HR)Upgradeofsalespracticesandsystems(e.g.pricing)IndustryResponses麦肯锡公共电视运营模式OPTIONS:WEBEGANTHEPROCESSBYDEFININGASETOFCRITERIACriterion1:Likely,large,andnear-term:represents>$10Mnetperyearwithin5years,basedonclearbusinesscasefromcompellinginternalexamplesorrelevantexternalbenchmarksCriterion2:UnderPTVcontrol:Achievingtheopportunitydidnotrelysolelyona“happyaccident”outsideofthesystem’scontrolCriterion3:Nomajorstrategicissues:pursuingthiswouldnotrequiremajorconsultationtoreassess/reaffirmthestrategy,mission,positioningofPTV麦肯锡公共电视运营模式OPTIONS:ABROADRANGEOFIDEASWERECOLLECTEDTHATWEBELIEVEDMIGHTMEETTHECRITERIATraditionalRevenueSourcesA.MembershipRetentionMajorGiftsCostsofMembershipB.UnderwritingNationalSalesUnwiredNetworkSalesLocalC.FoundationsD.LocalPartnershipsE.FederalDollarsDept.ofEducation,NEASpectrumAuctionTaxonInternetAncillarySourcesA.OtherPlatformsCableVODTivoOnlineB.RightsMgt.Video/DVDLicensingDomesticSyndicationInternationalSalesDigitalTelevisionA.NewServicesDistanceEducationDatacastingHomelandSecurityISPWorkforceTrainingGovernmentServicesNonprofitServicesMemberSubscriptionsTVMulticastB.FederalSupportB.CollaborationMasterControlCommercialPartnersMembership/UnderwritingSalesC.TechnologyInterconnectionAssetManagementMasterControlA.ThirdPartyFundsNationalProgrammingFundCo-ProductionB.ChangeProgrammingMixC.IndividualProgramsLowerPer-HourCostIncreaseRepeatsSystemEfficienciesProgrammingA.ImproveLowerPerformingStations麦肯锡公共电视运营模式OPTIONS:WEANALYZEDTHEIDEASAGAINSTEACHCRITERIONCriterion3-NomajorstrategicissuesCriterion2:UnderPTVcontrolCriterion1:Likely,large,nearterm:MajorgiftsMemberretentionMembershipcostNationalunderwritingLocalunderwritingFoundationfundraisingCableChannelDomesticwindowingVOD/TIVONewdigitalservicesIncreasedfederalsupportforDTVRightsmanagementSystemefficienciesNeedastrategicplantopursueCableChannelDomesticwindowingPrepareforbutavoidover-investmentVOD/TIVOIncreasedfederalsupportforDTVGoodideasbutinsufficienttosecurefinancialhealthNewdigitalservicesMemberretentionMembershipcostLocalunderwritingMajorgiftsMemberretentionMembershipcostNationalunderwritingLocalunderwritingFoundationfundraisingVOD/TIVONewdigitalservicesIncreasedfederalsupportforDTVRightsmanagementSystemefficienciesMajorgiftsMemberretentionMembershipcostNationalunderwritingLocalunderwritingFoundationfundraisingNewdigitalservicesRightsmanagementSystemefficienciesMajorgiftsNationalunderwritingFoundationfundraisingRightsmanagementSystemefficiencies麦肯锡公共电视运营模式OPTIONS:THREEPOTENTIALSOLUTIONSPASSEDEACHSCREENExpandmajorandplannedgivingeffortsPursuecostsavingsthroughstationandsystemefficienciesImprovemodelforNationalProgramming麦肯锡公共电视运营模式 * Basedoncasestudystations,includingKUED,OPTV,KNPB,andWGBHSource: Stationinterviews;McKinseyNonprofitPracticeGivingpyramidfortypicalstationbeforelaunchingmajorgifteffort*GivingpyramidfortypicalstationafterlaunchingmajorgivingeffortMajorgivingrevenue6%94%13%87%SOLUTIONS:MAJORGIVINGHASAPOTENTIALIMPACT–$20-$35MILLIONNETREVENUEIfallstationscouldseecomparableimprovements,systemcouldraise$20-35millionnetrevenue麦肯锡公共电视运营模式SOLUTIONS:CASESTUDIESOFFERUSEFULROLEMODELSFORSTATIONSLAUNCHINGHIGHTOUCHDEVELOPMENTEFFORTS Source: Stationdata(KLRU,KNPB,OregonPTV,andKUED)6.51.61.6CostperdollarraisedPercent4.76.02.0-17.2.9KNPB’smajorgivingeffortwassuccessfulbecausetheyaggressivelytargetedhighnetworthindividualsforlargegifts$ThousandsKLRU’smajorgivingeffortgrew~3timesasfastastheirregularmembershipefforts$ThousandsOregonhasbeensuccessfulbecausetheyexpandedafullrangeofhightouchdevelopmentefforts,includingmajorgiving,plannedgiving,andanendowmentfund$Thousands7590113Numberofmajordonors27477110625.6MidlevelgivingMajorgivingPlannedgivingEndowment348082122112Numberofmajordonors76385N/A9512733.6**1,701787460615697Costperdonor$0814575N/A960632-10.4***KUED’slong-terminvestmentinmajorgivinghasledtoaten-foldincreaseinthisrevenue$ThousandsGrowthRate25.5**1,4202,1743,0543,7904,5197,8538,495GrowthRate28.9GrowthRate14.0麦肯锡公共电视运营模式SOLUTIONS:SUCCESSREQUIRESSIGNIFICANTACTION*Definedasstationswithnoorlimitedmajorgivingeffortsorreporting,lessthan6%oftotalmemberrevenuesfrommajorgifts)**Definedasstationswheremajorgivingrevenuesaccountfor6-13%oftotalmemberrevenue***Definedasstationswheremajorgivingrevenuesaccountfor+14%oftotalmemberrevenueSource: SABSStationssegmentedbymajorgifteffortsTotal=176$374MNumberofstationsTotalmemberrevenueStrongmajorgifteffort***Limitedmajorgifteffort*Somemajorgifteffort**Establishfullrangeofhightouchdevelopmentefforts(i.e.,majorgiving,plannedgiving,endowmentdevelopment)OpportunityPotential$10-20MnetrevenueRaisecurrenteffortsuptobestpractice(e.g.,improveexistingmajorgiving,expandmenuofhightouchdevelopmentofferings)$8-15MnetrevenueContinueeffortstoachievefullpotentialTotalunknown$20-35M+麦肯锡公共电视运营模式SOLUTIONS:MEMBERSHIPSTAFFOUTNUMBERSMAJORGIVINGSTAFFOVER6:1Source: SABSServeover1.5millionmembersandover$120millioninrevenueServe8500majorgiversandover$40millioninrevenue麦肯锡公共电视运营模式SOLUTIONS:KEYELEMENTSOFOURPLANWILLINCLUDEDEVELOPINGCAPACITYATSTATIONS–WITHGMsANDBOARDS,ASWELLASWITHINDEVELOPMENTDEPARTMENTSBenchmarkstoFocusOurEffortsIDmajorgivingcohortsSetkeystationbenchmarksTrackimprovementCommunicationCampaigntoEnsureBuy-inClearunderstandingofourpastIdentifychangeagentsandearlyadoptersIdentifystationsuccessfactorsToolkitstoSupportImplementationDesignandimplementnewprogramsforGMsandBoardMembersCreateaninventoryof“whatweknow”Createcopypoints,jobdescriptions,etc.CreationofaNationalEnvironmentforSuccessPeer-to-peerGMnetworksLaunchnationalcampaignAddt’lfinancialincentivesIdentifyeconomiesofscaleinmembershiptofreeupresources麦肯锡公共电视运营模式McKinseyStudySOLUTIONS:SYSTEMWIDEOPERATIONALEFFICIENCIESHASTHEPOTENTIALFOR$40-$200MILLIONCentralizedMasterControlRegionalNationalConsolidatedtransmissionfacilitiesFullyautomatedtrafficmanagement&schedulingCentralizedIngestProducingcentersInterconnectionPOPConsolidatedarchivingCentralized/nationalpurchasingConsolidatedIT/TelcomfunctionalityAdministrative/Backofficeconsolidation=OpportunityCostSavings$$BoozAllenStudyAccentureStudy麦肯锡公共电视运营模式SOLUTIONS:BROADCASTOPERATIONSWORKFLOWSPROJECTDECISIONIMPLEMENTATIONANALYSIS&PLANDEVELOPMENTCOMMUNICATIONSLAUNCHTechConfpresentationCPBroundtablesTDCReviewStationmemosExpandworkingteamCommunicatevaluetostations2-3commoncauseprojectsTrackbookedcostsavings12-18monthsReviewprojectsquarterlyFullPTVimplementation?CPBSABsdataPreviousstudiesReviewpastOEprojectsMcKinseyassumptions&analysisDevelopimplementationplan麦肯锡公共电视运营模式SGsellsadditionalsponsorshipInventorySOLUTIONS:NATIONALPROGRAMMING’SOBJECTIVE–IDENTIFYIMPROVEMENTSINVALUECHAIN(NEWPROCESSES,DIFFERENTROLES)ResearchCommissioning/rightsacquisition/fundingSponsor