Jake Shapiro on PRX and the iPhone App That Could Change Public Radio’s Future

8/18/09Follow @wroush

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there was something missing. We weren’t using the Internet as a way to connect stations to each other and to independent producers, whose wonderful work is used once and then left by the wayside. I heard this idea and said, ‘Let’s bring it to the Berkman Center as a project.’ They said that as a matter of fact, they were actually looking for somebody to do this as an executive director and turn it into a reality, so I left the Berkman Center in the summer of 2002 to do just that.

We fortunately had gotten a small grant from the Ford Foundation to write a business plan. I brought on a consultant and we dived into and wrote a very thorough blueprint, not just for the basic functionality and business rules of PRX but also the technical requirements for the first version of the Web application. We were fortunate that it was at the low ebb of the dot-com bust, so when we put out a [request for proposals] to build the first version of the app and we only had $80,000 to spend, we got about 30 responses, from some very impressive outfits that were hungry for work. It was a rocky road to the first version but we got a lot of bang for our buck and we launched version 1.0 of the platform in September 2003.

X: What did the platform do at that time?

JS: The basic core functionality is what it does today, which is to act as an open distribution platform that enables anyone with audio or radio work that they want to offer to public radio to upload it directly to the site, and encode it in the broadcast file format, MP2, and list all their metadata and rights and licensing information. That’s the producer side of it. The flip side is the stations, who are the main customers, who were also given accounts, and a way to search, find, listen to, and ultimately buy and download these broadcast files. And on top of that, we created an economy, so that there is pricing built in. That was new terrain, as there had not really been an existing market in the public radio world.

X: A lot of people probably don’t realize that public radio actually runs on money—that stations have to buy most of their programming.

JS: Some people think it’s all done by volunteers, but people pay bills for things. It is a semi-subsidized economy, so there are a lot of strange dynamics. A producer might have a grant to pay for a work, in which case they want to give it away for free. But the hard sector to deal with was this independent work, which hadn’t been easily available before. There are a lot of hurdles to acquiring, licensing, and paying for that work. If you want to run a great documentary on the health insurance industry, finding out about it, tracking it down, getting the audio, working out an agreement, securing the rights, and paying for them were steps that inhibited a huge amount of potential distribution. One of the whole premises of PRX was to get rid of those barriers and reduce those points of friction.

We’ve stayed true to that as the core vision of PRX. We were able to solve the chicken-and-egg problem of creating a new marketplace, which meant jumping in right out of the gate and bringing in enough valuable content and enough stations wanting to use it. We started out with probably 500 works available on the site and maybe 40 stations signed up to use it, and now we’re talking about 20,000 works at any given time and approximately 400 stations, which is most of the public radio stations in the U.S.

X: How do you fund the operation?

JS: The funding is heavily reliant on some key foundation investments, the big ones being the Corporation for Public Broadcasting, the Ford Foundation, and the MacArthur Foundation [see story]. We were selected last year for their “Creative and Effective Institutions” award, their version of the genius award for institutions, which was really significant for us. The National Endowment for the Arts and the Surdna Foundation in New York are also real catalysts.

But throughout all of this, our strategy has been to continuously grow the direct revenue and become self-sustaining. We made it very clear we would be taking a percentage of the transactions on PRX, and as a result that’s a quarter of our revenue. We charge at the front end—the way stations buy content is they pay for a package of hours of content, and they pay a fee on a sliding scale based on their station’s budget, and we take a straight percentage, which at this point is 10 percent. We take a fee from producers too—anybody can create a free account and upload up to two hours of audio, but if they want more space and if they want to earn royalties from their work, they have to become a paid user, which is modestly priced at $50 per year. The site does all the transaction tracking, of which stations are using the work. Each quarter we tally up the totals and calculate the royalties due and send out the checks.

X: Can independent radio producers make a living that way?

JS: It isn’t really designed for that. There are very few ways for independent producers to make a living in public radio. It’s a small economy to begin with, and one of the hardest roles to play is to be a freelance creator. PRX is an important tool in the toolkit, but we’re definitely not the lifeline.

There is a great need to figure out how to foster that work, especially with the recent cancellation of several shows that were major showcases for independent work—Weekend America, Day to Day, and WNYC’s The Next Big Thing. It’s one of the most dynamic parts of the landscape, creatively, and it’s where a lot of the hope is pegged for the future of … Next Page »

Wade Roush is Xconomy's chief correspondent and editor of Xconomy San Francisco. You can subscribe to his Google Group or e-mail him at wroush@xconomy.com. Follow @wroush

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