PRX HAS CHANGED THE MODEL FOR NONCOM SYNDICATION

Earlier this week New York Public Radio – WNYC – announced that two of its national programs are leaving NPR distribution. According to WNYC sources, Radiolab and On the Media will “self distribute” as of October 1, 2015. People are speculating that the programs are moving to PRX.  This makes sense to me.

PRX had no comment.

[DISCLOSURE: My company, Ken Mills Agency, LLC, represents American Routes, which is distributed by PRX. In the past I have been a paid consultant for PRX.]

HOW THE PUBLIC RADIO NETWORKS MAKE MONEY

Pubic radio has three networks: NPR, American Public Media (“APM”) and Public Radio International (“PRI”).

Member stations own and govern NPR. Stations pay lots of money for membership and even more for programs like Morning Edition and ATC.  NPR also distributes programs owned by others including Car Talk, Wait, Wait and Latino USA. Typically stations must be members in order to access/buy programming from NPR.

APM and PRI use the Country Club Model.  Stations must pay a fee to become affiliates.  Affiliation fees are determined by the size of the market and Total Station Revenue (“TSR”), as reported to CPB.  The fee is a cover charge that gives stations access to the network’s programming.  After becoming affiliates, stations pay carriage fees for the programs they carry. With a handful of exceptions, only affiliates can air APM and PRI programs.

This business model has worked very, very well for APM and PRI.  Both networks use the revenue from affiliation fees to pay for their daily operations.  APM and PRI also receive a portion of carriage fees paid by stations. This percentage comes out of producer’s pocket and can vary from 10% to 40% depending on the program.

STATIONS DISLIKE THE NETWORK “TAX” ON PROGRAMMING

Over the years I have heard from station folks complaining that APM and PRI affiliation fees offer no benefit to stations.  The perception is that affiliation fees are used to pay comfy salaries to network executives etc. But, the stations keep paying the fees because it is the only way they can get programs that are valued by listeners.

The networks do offer advantages to stations and producers: 

Stations like one stop shopping and quick access to support services from the networks.  Though they say they don’t do it, all three networks sometimes bundle programs to save the stations some money.

Producers like the convenience the networks provide. The networks bill and collect carriage fees, market programs and often help with Content Depot expenses.  Some producers feel there is value to being associated with a network.  But, the network halo doesn’t seem to be as bright anymore.

ENTER PRX

PRX became a for-real national program distributor in the late 2000s. Now they distribute This American Life, The Moth, Reveal, Sound Opinions, American Routes [my client] and many, many more.  They sponsor a number of creative initiatives.  Unlike NPR, APM and PRI, PRX can make quick decisions and react to market trends as they happen.

Stations like PRX because it is cheap and easy – almost any noncommercial station can join and participate.  PRX’s SubAuto system – the method of delivering programming to stations – works well according to users.

Producers like PRX because SubAuto provides optional automated carriage fee billing and payment. PRX now provides marketing services for certain programs.  PRX doesn’t intrude into producers editorial and creative process. 

Perhaps the most important reason stations and producers like PRX is the LACK OF NETWORK POLITICS.  PRX plays well with everyone.  The only people who seem to dislike PRX are at organizations that compete with PRX.

THIS AMERICAN LIFE SHOWS ONE OF PRX’s BIGGEST ADVANTAGES

MORE MONEY GOES TO THE PRODUCERS.  PRX typically retains a much smaller percentage of the carriage fees paid by stations. Here is a hypothetical and illustrative scenario that is solely my creation and is NOT based on info from PRX:

Lets say a certain program brings in $2,000,000 of station carriage fees.   Say the network takes 25% of the revenue and pays the remainder to the producer.  The network pockets $500,000.

The program’s producer moves distribution to PRX. Hypothetically, PRX takes only 10% of the fee revenue: $200,000. $300,000 moves immediately to the producer’s bottom line.  Sweet deal.

Plus, the programming is available to more stations.  PRX’s inexpensive affiliation fee means a larger universe of stations.

Will Radiolab and On the Media move to PRX? They might but even if they don’t the new distribution template will be The PRX Model.