Why NPR is Thriving (They’re Not Afraid of Digital Media)

http://www.ikiw.org/2009/04/25/why-npr-is-thriving-theyre-not-afraid-of-digital-media/

by madh • 17 years ago

34 16 17 years ago

GavinB• 17 years ago

The interesting point for me here is NPR's revenue model. They're supported by tasteful sponsorships and donations, and they give their content away. They're more successful at this model than any website that I can think of.

They are the one traditional news outlet that isn't damaged by changes in distribution methods. The only change might be that they need to spread their pledge drives out more broadly so that it's harder to skip or tune out.

neilk• 17 years ago

They still don't use peer-to-peer sharing. Every now and then Ira Glass will plead with podcast listeners to fund the hundreds of thousands of dollars in bandwidth that This American Life costs. I emailed them once about why they didn't simply send the cost of this down to zero by going peer-to-peer, and they said they'd looked into it (and didn't supply further details).

Possibly there would be problems tracking downloads for sponsors. Or, maybe it's the structure of how pledge drives work, where a breakout show like TAL helps fund the entire station.

tjic2• 17 years ago

> They're supported by tasteful sponsorships and donations

They get 50% of their budget from taxes, and most of the "tasteful sponsorships" are large companies that either get large subsidies from the overnment, or work under lots of government regulation and want to buy favor with congress.

The largest sponsor of NPR is Archer Daniels Midland, an agricultural corporation. Want to know why Scientific American is talking about how food shortages could kill tens of millions over the next few years?

http://www.sciam.com/article.cfm?id=civilization-food-shorta...

It's because ADM has been using its NPR sponsorship to buy access in Washington, where it can push biofuel mandates, turning food into a poor substitute for gasoline, thus boosting the price of it beyond the reach of the global poor.

jdminhbg• 17 years ago

I'd imagine the government subsidies and not needing to pay for their chunk of the FM spectrum probably have a lot to do with it, too.

eli3• 17 years ago

I believe the plurality of money comes from pledge drives, not the government. But point taken.

AndrewO• 17 years ago

The subsidies are quite low, actually. NPR itself only gets between 1-2% of its funding from the government.

Member stations average about 11% from the Corporation for Public Broadcasting, which is government funded. The rest comes from listeners during those annoying, but necessary pledge drives, private grants, and corporate sponsorship (and I can tell you from experience, they place a lot of constraints on what they'll say in that underwriting spot you pay for).

Details here: http://www.npr.org/about/privatesupport.html

tjic2• 17 years ago

This is blatantly false, for reasons I'll explain below.

Also, you're conflating NPR (NPR, Inc.) with member stations. These are different entities.

The topic is NPR.

The numbers that you cite are not numbers for NPR.

They are not even number for NPR member stations.

They are aggregate numbers for public broadcasting stations ... including those not affiliated with NPR.

Getting the truth out of NPR's reports can be tricky. They haven't filed an annual report in four years, and the financials are split up between NPR, Inc., the NPR foundation, the CPB, and various member stations. You have to read a LOT of documents to figure out some of this stuff.

Let's start with NPR's financial documents.

   http://www.npr.org/about/statements/fy2008/fy08nprincreport.pdf

I note $2.5 million in membership dues (individual donations) out of $172 mill total. Thus, individual subscribers and pledges make up 1.45% of NPR's budget.

$68 million comes from station programming fees. What are these? These are fees that local affiliates pay to National Public Radio, Inc. Where do those dollars come from? A typical affiliate gets two thirds or more of its budget from the Corporation for Public Broadcasting. The CPB is a shell corporation / funnel that connects federal dollars to NPR with a cut-out step. See the CPB financials here:

  http://www.cpb.org/aboutcpb/financials/budget/

The CPB gets $400 million per year from taxes, takes 10% off the top for operations, and funnels 90% of the money to local affiliates, which then funnel most of the money back to NPR.

The data that you cite about the sources of funding are not for typical NPR affiliate stations: first, it includes many stations that aren't NPR stations, then it excludes many stations that are NPR stations (they mention this in a footnote).

Where else does NPR get its revenue? Grants, contributions, and sponsorships total $52 mill. Let's be generous and say that half of that comes from private sources (in fact, most of these grants are coming from other government funded organizations).

A big contributions to NPR's top line is from the NPR Foundation, which gave 15 mill in 2008. ...but look back at the 2005 numbers, and it was just 1.7 mill. Why the huge (1,000 %) increase in money from the NPR foundation? Read the NPR Foundation's reports and the Consolidated reports

   http://www.npr.org/about/statements/fy2008/fy08nprfoundationreport.pdf

   http://www.npr.org/about/statements/fy2008/fy08consolidatedreport.pdf

and you can see that they've been investing in highly leveraged hedge funds and interest rate swap contracts these past few years. To put it mildly, this doesn't look like sustainable money.

Putting aside the non-sustainable NPR Foundation money, the federal government makes up $90 mill of NPR's after-removing-the-Foundation revenues of $152 mill.

So, where does NPR get its money?

* federal dollars: 60%

* individual contributions: 1.5%

* advertising, misc: 38.5%

eli3• 17 years ago

Also, they're not afraid of getting replaced in a shareholders' revolt.

eli3• 17 years ago

NPR may be "thriving" in terms of audience size, but just a few months ago they canceled a show and announced layoffs due to a lack of funds.

garyrichardson• 17 years ago

NPR makes up about 50% of the podcasts I listen to. I've been able to plug my ipod into my car for 4 years now. I never listen to the radio (music or talk) at all any more.

I mostly listen to Science Friday. They're constantly pushing alternative interaction methods, like second life and twitter. I always figured it was an attempt to engage 'the kids' into science.

mahmud• 17 years ago

NPR is thriving because it manages to be the best information source in any medium. It's not the economist, but it's informative, entertaining, cultured yet very humane. The Saturday programming alone forces me out of bed early; Weekend Edition, Car Talk, Wait Wait Don't Tell Me, This American Life, Studio 360, Market Place, On the Media and All Things Considered. You just can't find that anywhere.

TV and regular media have no chance. Commercial FM radio is just obnoxious and loud. I'm shocked and offended every time I get my car back from a borrowing relative and have the preset on some loud annoying jockey. American television .. best left unsubscribed to. Its best hours are 5PM to 9PM of the Sunday Fox programming; when it shows animated shows, which can now easily be watched on Hulu.

For those of you who read the Economist, I can recommend Mother Jones to balance out the right-wing nuttjobery that pervades the otherwise excellent publication.

geofffox• 17 years ago

Is someone in an alternate universe? From Friday's NY Times:

"In a new round of cost-cutting, National Public Radio said it would lay off 13 employees, eliminate contributions to employee retirement accounts for the rest of fiscal 2009 and impose five days of furloughs for all employees before the fiscal year ends on Sept. 30."

No one--not even NPR can monetize their audience to pay for programming. Programs like "All Things Considered" and "Prairie Home Companion" are dependent on an expensive infrastructure and staff.

I work in 'old media' and the problem for businesses and employees alike is an eyeball on the Internet is worth less money than an eyeball on TV or ears on radio. As we move people to our websites we do so at our own peril. We can afford to produce less for an Internet than TV viewer.

I am no Rupert Murdoch fan, but he put it best when he pointed out ad space on the Internet is unlimited. Therefore there will always be downward pressure on advertising rates.

In the short term this isn't a big deal for end users. In the long run people will realize much of the news and entertainment programming we all enjoy (not all and not necessarily the best) will no longer be produced.

murrayh• 17 years ago

Billboard space in our universe is unlimited (in the same sense as ad space on the Internet is unlimited) as well. Not all locations are equal, and hence there will be competition for the best locations.

njharman• 17 years ago

Is NPR really considered "mainstream-media"?

To me "mainstream-media" means the big for-profit corporate conglomerates.

I bet not needing to make a 10-15% profit has much to do with it. Not only monetarily but also integrity("no worries a show/statement will alienate advertisers") and public perception. In fact I'd wager the not afraid of digital is a symptom of being a NPO.

jgamman• 17 years ago

arrgghh the graphics hurt my brain... memo to self: gotta stop reading tufte

Why NPR is Thriving (They’re Not Afraid of Digital Media)

Related Stories