NPR Plans Mandatory Digital Tax on Stations
NPR is unveiling an expansive network-station digital strategy at a series of meetings around the country. NPR is promising the moon to stations and ending the presentation with a “business model” that is nothing more than a mandatory tax on all stations for NPR digital services, whether the station uses the services or not.
That’s right, NPR management wants to force stations to buy its digital services package for up to $99,500 per year even if the station doesn’t want to use those digital services.
The presentation suggests that stations will earn revenue by using NPR’s digital services, but no revenue projections are given. A station paying nearly $100,000 per year has to take it on faith that it will see a return on its mandatory investment in NPR services.
It’s clear that NPR’s primary goal behind this strategy is to raise cash for its national digital services, which continue to lose money. NPR wants stations to believe, without showing revenue potential, that they can profit through NPR’s digital services even though NPR itself cannot.
When the NPR board adopted listener-hour pricing for the newsmagazines, it established the principle that the return on investment for stations should be at least 100%.* That same principle should apply to NPR’s digital services.
A true business model would show stations a meaningful financial return on their investment through new revenues, not cost-savings. Heck, a true business model would require NPR digital services to compete for a piece of the station’s budget. Instead, the “business model” taxes the revenues stations raise from their broadcast operations to fund NPR’s money losing, direct-to-listeners programming service.
None of this should be surprising, however, given NPR’s approach to digital in the past 24 months. Every time NPR has talked about partnering with stations on digital, it has talked about charging stations money.
That’s not partnership talk. Think about it. How many businesses talk publicly about taking money out of their partner’s wallet? Even fewer talk about forcing their partners to give them money when the partner doesn't want to participate in the venture.
It looks as though the Vivian Schiller station-relations philosophy has yet to leave the building.
* Stations currently derive a larger gross return on investment on the newsmagazines. The 100% return rate is actually too low on a gross-revenue basis to sustain stations so the pricing model never reached that threshold. If NPR ever pushed rates that far, many stations would have to drop All Things Considered and maybe even Morning Edition.