(Updated March 2, 8:20a)
Our previous posting mentioned that NPR and stations would have to make some sacrifices if NPR's flagship news programs were to appear on satellite radio in real time.
The sacrifice for stations is obvious. They will receive more competition for their current audience and that creates financial risk.
NPR's sacrifice is on the financial side as well.
These days, NPR brings in essentially the same amount of money in corporate underwriting as it does in station fees and dues.
NPR's program pricing policy allows NPR to charge stations up to 50% of the gross financial value stations derive from NPR's newsmagazines.
Put another way, NPR has staked itself a 50% claim on all individual contributions and business income stations raise on-air and off-air due to programs such as Morning Edition and All Things Considered. NPR doesn't charge that much today, but for some stations, it's getting close.
So NPR gets to keep 100% of the money it raises by selling station
audiences to national underwriters. It gets to keep 100% of the money it raises by selling books, CDs, and t-shirts to station
listeners through the NPR on-line shop. It is allowed to charge stations up to 50% of the money NPR newsmagazines generate locally.
That means in the NPR-Station Partnership, where one needs the other to raise significant funds, NPR is entitled to around 67% of the money. (note: the original post stated 75%, which was based on a different set of assumption than the ones used here.)
That wasn't a good economic model to begin with, which is why NPR has had to offer dues relief to stations for several years. It's an even worse economic model for stations when listening to public radio is in decline and NPR wants to reach listeners directly via satellite. Those changes are direct threats to station revenue.
Certainly, changing the NPR-Station financial equation to help stations has it risks. And it won't be as easy to do as it is to write about. But the whole reason for getting NPR newsmagazines on the satellite is to grow public radio's public service to the nation and the world. If NPR isn't willing to take a financial risk to do that, why should stations?