The most successful hybrid of old and new media comes from the last place you'd expect. How NPR's digital smarts, nonprofit structure, and good old-fashioned shoe leather just might save the news.
Days before the inauguration of Barack Obama, three dozen essential employees of the country's largest news organization are finalizing logistics in their Washington, D.C., war room. The A team of editors and producers will arrive the night before and sleep in cots on-premises, while reporters take up positions around D.C. in subfreezing temperatures, to go live at 5 a.m. Remote broadcasting units will be powered with battery packs stuck inside insulated pizza boxes, heated with chemical hand warmers. The rambunctious room quiets when the silver-haired editorial director delivers his Hill Street Blues speech: Be careful out there. "What I worry about is something bad happening in the real world," he says. "We are planning coverage of a scripted event, but it may not be scripted."

As the world now knows, the big day went off with scarcely a hitch. And National Public Radio proved once again that it's the country's brainiest, brawniest news-gathering giant, as several million people tuned in and more than 40,000 sent in updates from across the Mall and around the world by YouTube, SMS, Twitter, Flickr, and iPhone.

Yes, it's true: In one of the great under-told media success stories of the past decade, NPR has emerged not as the bespectacled schoolmarm of our imagination but as a massive news machine poised for what Dick Meyer, editorial director for digital media, half-jokingly calls "world domination." NPR's listenership has nearly doubled since 1999, even as newspaper circulation dropped off a cliff. Its programming now reaches 26.4 million listeners weekly — far more than USA Today's 2.3 million daily circ or Fox News' 2.8 million prime-time audience. When newspapers were closing bureaus, NPR was opening them, and now runs 38 around the world, better than CNN. It has 860 member stations — "boots on the ground in every town" that no newspaper or TV network can claim. It has moved boldly into new media as well: 14 million monthly podcast downloads, 8 million Web visitors, NPR Mobile, an open platform, a social network, even crowdsourcing. And although the nonprofit has been hit by the downturn like everyone else, its multiple revenue streams look far healthier long term than the ad-driven model of commercial media. (In 2003, Joan Kroc, widow of McDonald's founder Ray, gave a $200 million endowment to NPR, the largest gift ever to an American cultural institution. She must have gotten one hell of a tote bag.)

In one of the great undertold media success stories of the past decade, NPR has emerged as a massive news machine poised for what one exec half-jokingly calls "world domination."

In the past few months, a fresh crop of new executives and editors have arrived at NPR from the storm-tossed commercial media world. Meyer came from CBS; Kinsey Wilson landed from USA Today as general manager for digital media; and in January, Vivian Schiller joined from NYTimes.com as the new CEO. Their mission — seizing even greater audience share — is more aggressive than most for-profit operations' in this age of retrenchment. But with that ambition comes great responsibility. "Part of our desire to bring more NPR to more people is that, with the evisceration of commercial journalism, there's a dire need for it," Meyer says. "Major mainstream stories are increasingly going uncovered. And I think it might be the nonprofit journalism world that meets that huge market need, which is also a basic need of a democratic society and an information-based economy."

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It's a bit of a mystery how NPR managed to grow its audience so dramatically even as other news outlets suffered. Brand-new CEO Schiller has one of the most popular theories. On her ninth day of work, her office is still full of congratulatory flower arrangements — the perfect setting for her rosy take on the source of NPR's true strength: the human element. When her appointment was announced, she explains, she got more than a thousand emails from family, friends, and old coworkers, and each had a personal anecdote about a local station or drive-time ritual. "I've worked in a lot of big media companies now," she says. "I mean, this is my fifth [The New York Times, Discovery Channel, CNN, TBS], and I've never seen such a connection between the institution and the audience members. The power of that is extraordinary. The journalism and the credibility — that's the obvious stuff. It's the personal connection that's the secret sauce."

That intimate, knowing voice in your ear is just one of several characteristics of public radio that adapt shockingly well to a world of information overload. Another is its lower cost, which is helped by the near-absence of a star system or marketing budget. ("There are TV news anchors whose salary is three times the budget of Morning Edition," says veteran VP for news Ellen Weiss.) Then there's convenience. NPR board chair and Harvard Business School professor Howard Stevenson says, "As commutes lengthen, the importance of drive-time radio has grown. People don't have 15 minutes to sit at home and read the newspaper, but you can get accurate, in-depth reporting as you sit in traffic," or make dinner, or clean out the garage. It's a screen-free complement to online browsing.

At least as important as those factors — or so journalists would like to believe — is NPR's commitment to doing better work. Former CEO Ken Stern and Kevin Klose, president of NPR from 1998 to 2008, are both credited with shelving musty classical music programming to beef up the news operation. That evolution began with Tiananmen Square in 1989, the Gulf War in 1990, and the debut of cable news as a competitor, says Weiss. When she started 27 years ago, "it wasn't really a primary news organization," she recalls. "We used to say we'll do a story a day late and call it 'analysis.' Now we get up earlier in the morning." That means key news managers now come in at 7 a.m., and there's a 24-hour staff for flagship Morning Edition.

Combine the personal touch with the patience to do serious explanatory journalism, and you get one of NPR's major editorial triumphs of the past year: "The Giant Pool of Money," an hour-long episode of This American Life about the financial crisis first broadcast in May 2008. The show was the first-ever coproduction between NPR and TAL (Ira Glass & Co. are produced by WBEZ in Chicago and Public Radio International, an independent production company). NPR business reporter Adam Davidson and TAL producer Alex Blumberg coaxed global economists into breaking down terms such as derivatives, tranches, short selling, and credit swaps. They used vivid narrative and humor to bring these stultifying concepts to life. You hear from guys like Glen Pizzolorusso, who spent his days approving "liar loans" and his nights at Marquee with Christina Aguilera. Throughout, Blumberg and Davidson's frank dismay at the chicanery comes through.

To hear Davidson tell it, the economic crisis demands public-radio-style journalism. "I don't think this is a good story for newspapers, to be honest with you. Because it's an emotional story, it's a shocking story. We're used to all the people who formed the architecture of our economic infrastructure having the voice of God — like Alan Greenspan. They're the experts and they understand the world and they're going to explain it. And business journalists had that tone too. We're now in a world where anybody who tells you they know exactly what's going on, you can just dismiss them as a liar."

To continue to get that kind of programming out to as many consumers as possible, everyone from Schiller on down sees technology as the key. "We have to skate where the puck is going," she says (in what may be the first use of a hockey metaphor by an NPR CEO). Certainly "The Giant Pool of Money" demonstrated how easily a strong NPR show can be repurposed as multiple digital streams. It has been downloaded as a podcast more than half a million times and spawned a thrice-weekly NPR podcast and blog, Planet Money, which are getting 1 million downloads and 400,000 page views a month, respectively. But NPR's digital efforts are much broader. It was the first mainstream-media organization to enter podcasting and often has several programs in the iTunes top 10. An open platform introduced last year allows listeners to mix their own podcasts and otherwise play around with NPR content — one fan built an NPR iPhone app. And NPR is putting all of its editorial employees — every editor, producer, and reporter — through multimedia training, with support from the Knight Foundation. Traffic on NPR.org grew 78% from 2007 to 2008.

New-media pundits, such as Buzzmachine's Jeff Jarvis, author of What Would Google Do?, applaud NPR's catholic approach. "It's got very smart people thinking about its online strategy," Jarvis says. "Like the BBC, it sees itself as a public trust, so its aim is to get its content distributed as widely as possible. Old media expected us to come to them. Now they need to come to us." Multiplatform distribution dovetails nicely with NPR's public-service mission, and — significantly — helps attract a younger audience too: NPR's median radio listener is 49; its median podcast listener is 33.

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New technology may be the key to NPR's future success, but it also represents a significant threat to its current revenue model. Like many families, NPR and its member stations are fighting about money. Public radio has a highly collaborative structure that inverts that of most commercial media. The nation's public-broadcasting stations pooled their resources to start National Public Radio in 1970, and they still control its board.NPR doesn't broadcast, but produces Morning Edition, All Things Considered, and several other shows and sends them to local stations where they're blended with regional coverage and shows produced elsewhere, such as Fresh Air from WHYY in Philadelphia. Forty-three percent of NPR's budget comes from the dues and fees member stations send in for those rebroadcast rights, prorated by audience — $1.4 million a year from L.A.'s KCRW, for example. Twenty-nine percent comes from corporate underwriting (the 10-second spots that stand in for ads) and another 15% from foundations and grants, less than 2% of which is government money. That means the money you send in to your local station's pledge drive really is the biggest piece of the pie.

By offering its content online, however, NPR effectively becomes a competitor to its member stations, undercutting the exclusive broadcast rights they pay for. Paul Farhi, who covers public media for The Washington Post, explains, "If I'm running a station in Chapel Hill or Bloomington, I pay dues to NPR to get the marquee programming that brings people to my station — All Things Considered and Morning Edition. I don't care about your digital initiative, or your All Songs Considered [primarily a podcast] — you're siphoning my dues to build your national brand. That's the essence of the conflict." For now, audio streams of the tent-pole programs are posted on NPR.org with a time delay and are not offered as podcasts, a compromise that satisfies no one.

It was Schiller's predecessor, Ken Stern, who oversaw the aggressive move into live streaming and podcasting, making member stations unhappy enough to push him out last year. Many insiders say Schiller was chosen in part for her diplomatic skills on this very issue. Indeed, she tells me she doesn't see conflict in NPR's digital divide, but rather an "enormous opportunity … to build the future of media in partnership with those stations." Her challenge, she says, is to "figure out a way to work together so that people in every community who go to their local NPR-member-station sites can get the benefit of NPR's international, national, and local coverage in a seamless experience."

Not so fast, says Ruth Seymour, who has been at KCRW in Los Angeles since the early 1970s and is now the general manager. "There is a hope on NPR's part that somehow we can work collaboratively online. I am truly dubious about it. In online, everybody is competitive with everybody else. You are not limited anymore by your coverage area." KCRW, for example, is known for the indie- and world-music show Morning Becomes Eclectic, which is streamed online, placing kcrw.com in direct competition with a new national site, npr.org/music. The latter features lots of video content, streams of live concerts, and exclusive "First Listens" of albums from artists ranging from Bruce Springsteen to Animal Collective. It also works with 12 partner stations around the country — emphatically not including KCRW. "This is our turf," Seymour says. "We happen to be in a market that is a capital for the entertainment business. I don't know how you can be connected in Washington. The business isn't there."

NPR's new staffers in digital media say they should be able to tamp down the conflict by goosing online fund-raising to support digital initiatives and supplement member-station dues. They're helped along by an audience that is perhaps more ready than most for the radical concept of paying for the content they consume. "One can't help but look at the success the Obama campaign had in direct engagement with the base that they were trying to mobilize and in fund-raising," says Wilson, the head of digital media. "They were not just making a direct appeal but creating an ecosystem and a culture that encouraged steady low-level giving." Meyer agrees, "When we had to announce layoffs and cuts in December, there were comments on some of our stories: 'How can we help? Where's the give button?' There's a sense that the organization is leaving money on the table. People would like to contribute more to this service that they adore and depend on."

Of course, if anyone knew how to support quality journalism exclusively online, the media business wouldn't be hemorrhaging jobs. Currently, digital underwriting on NPR.org makes up 12% of total corporate-sponsorship revenue, a figure that's growing but has a long way to go before it matches the power of the on-air appeal.

Last fall, NPR folded a youth-skewed news show called The Bryant Park Project, which had found an audience online but for which stations were reluctant to pay. Besides, even if NPR.org somehow became a fund-raising powerhouse, it would still have to work out a revenue- and content-sharing scheme to please reluctant station managers like Seymour. This is where having 860 stations becomes more of a block than a boon. "The business aspect of online, no one wants to pay too much attention to," says Seymour, "because the promise is so enticing and seductive and overwhelming that we're all like groupies. But the fact is, no one has come up with a feasible business plan, and that's a major concern. So how do you sustain this gorgeous blonde? How do you keep her in furs?"

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Before it can become the king of all media, NPR has to weather this downturn like everybody else. All sources of funding, from corporate underwriting to foundation grants, dipped last year, causing a projected $23 million budget shortfall for fiscal 2009. NPR cut staff by 7% and canceled two shows (News and Notes and Day to Day), both out of NPR West, the L.A. production outpost opened to great fanfare just a few years ago. It's NPR's worst budget crunch since the early 1980s, although it now has a protected endowment and was able to draw on up to $15 million in reserves to make up the shortfall.

Yet execs and reporters alike are confident that because audiences have stayed strong, and because NPR doesn't depend primarily on advertising, it will make it through this down cycle and come out even healthier. "One of the things that struck me as a newcomer is the strong sense of optimism that still pervades the organization," says digital media GM Wilson. "It stands in quite stark contrast to the atmosphere you encounter in newsrooms these days. There is still a very strong passion around the mission, what we're able to do on a day-to-day basis. And that may be fairly unique."

As a result, someday soon we may be looking at a world where public radio emerges as the main local-news source in many communities coast to coast. In Minneapolis, where the Star-Tribune is in bankruptcy, for example, the population may be about to get a lot less of columnist Chip Scoggins on the Vikings and a lot more of Garrison Keillor musing about Powdermilk Biscuits. It's worth asking what might be lost in the transition. NPR's audience may be surprisingly balanced among liberals, conservatives, and moderates, but it's overwhelmingly college-educated and affluent. "I think people like to listen to us because at the end of the day it makes them feel a little smarter," says Weiss. So will NPR have to bone up on the wildcat offense, or will the rest of America learn to love WTO coverage from Singapore?

Either way, to cement NPR's success in this climate, Schiller must bring to bear all of her considerable skill and charm to get people to hit that give button. "It's tough," she says. "I don't want to sugarcoat it. However, this is an opportunity to make our case, which is that NPR is one of the most, if not the most, vital news and information organizations. I certainly plan to pitch that case to our listeners who give to local stations, to foundations, to corporations, internally to our constituents, to anyone who will listen. And I believe it to be true."