Monday, May 17, 2010

The Financial Burden on Stations Grows

Fifteen years ago, the cost of NPR Newsmagazines was capped at 10.2% of a station's total revenue. Today, under a different pricing model, the NPR Newsmagazines eat up as much as 19% of a station's total revenue.

That's gross revenue. A more instructive story is told when the price of the NPR Newsmagazines is compared to the station's net cash revenue -- the revenue left after the cost of fundraising is accounted for. That number varies by station but is typically around 25%. One out of every four dollars an NPR News station spends each year is on the NPR Newsmagazines.

This is an extraordinary investment for stations especially when they are trying to find money to produce more local programming and expand to new platforms. It also reminds us that the financial issues facing public radio are as much on the spending side as on the fundraising side.

In our next posting, the financial implications of listeners leaving stations to hear NPR direct through mobile apps.

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