NPR’s board of directors will consider a proposal later this month that would change the formula determining what stations pay to use the Public Radio Satellite System.
Under the proposed structure, each station would pay a percentage of total annual revenue at a rate set annually by the Distribution/Interconnection committee of NPR’s board. A fee cap and minimum fee would also be determined annually.
Station now pay a flat fee of $9,020 if their total annual revenue exceeds $235,000; those under that level pay based on a sliding scale, with a minimum of $500. According to PRSS, a new rate of 0.75 percent of total revenue would raise payments for 166 of the 413 stations using the system, assuming a $20,000 cap and a $500 minimum. Seventy-nine of the stations seeing an increase would hit that cap.
If the total revenue percentage were set to 1 percent, 200 stations would see an increase, with 96 reaching the cap.
About 20 stations now pay a flat fee of $4,510 to acquire only files from PRSS, rather than live feeds. Under the new proposal, those stations would pay half of the percentage of revenue set by the D/I Committee.
PRSS is making the change in part because its clients, especially smaller stations, have said that the current fee structure puts a larger financial burden on stations with lower revenue, said Mike Beach, NPR’s v.p. of distribution.
Under the current structure, “the impact on the station budget varies pretty widely,” Beach said during a webinar last month. A station with total revenue of $200,000 pays 3.72 percent of that amount in fees, whereas a station with total revenue of $20 million is paying just 0.04 percent of its income.
More than a year ago, PRSS shared stations’ feedback with the D/I Committee, which asked PRSS to devise alternative fee structures. The full NPR board is expected to consider the proposal at its meeting Feb. 25 and 26. If passed, the D/I Committee will set the fee for 2017, and the new structure will go into effect Jan. 1, 2017.
“NPR Distribution is officially agnostic on what the NPR Board does,” Beach told Current.
PRSS is also considering the change because of uncertainty about federal funding and a decline in clients, Beach said. The future of federal funding for public broadcasting’s interconnection system is unresolved. Meanwhile, PRSS saw a net loss of 11 stations from its client pool between January 2014 and December 2015 due to sales, consolidation or broadcasters going out of business, according to Beach. If stations continue to leave the system and federal funding dries up, clients would have to contribute more to keep PRSS running.
Stations fees make up 18 percent of PRSS’s annual revenue, roughly $18 million. The rest comes from sources including federal funding, sales of extra capacity on the satellite, and producer distribution fees.
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