With “This American Life,” a Big Bet on Digital Pays Off for PRX

6/5/14Follow @curtwoodward

If you were making a Mount Rushmore of public radio, Ira Glass would definitely be carved in stone. So when the creator and host of the iconic program This American Life announced that he’d found a new company to distribute his show to radio stations nationwide, the media world took notice. 

Under the new deal, Glass and company were taking control of sponsorship sales and station marketing, rather than farming those expensive duties out to someone else. The technical work of delivering the show’s audio to more than 500 radio stations would go to Cambridge, MA-based Public Radio Exchange, commonly known as PRX.

Winning the contract for This American Life is unquestionably a big deal for PRX, a roughly 10-year-old organization that operates out of modest offices on a side street near Harvard University. But the deal also says a lot about how public radio, and the media business as a whole, is changing in the digital era.

PRX was built from the ground up as an online system, harnessing the Internet as a way to both find new programs and deliver those shows to radio stations. That’s a big shift in the public radio world, where most networks—like This American Life’s previous distributor, Public Radio International—rely on a legacy satellite system to distribute programs.

“There are not a lot of people,” PRX CEO Jake Shapiro said, “who live in this weird space between broadcast and the Web.”

Shapiro

Shapiro

PRX was launched in 2003 with the aim of helping independent radio producers get their work on the air more easily. With a Web-based system, producers would be able to easily upload audio files and offer them for sale to stations.

If it worked, such a system would dramatically simplify the established behind-the-scenes marketplace for public radio programs, which was not particularly easy to navigate for a solo producer, Shapiro said.

“You’d have to buy satellite time, not knowing if anyone wants to carry the show,” he said. “You’d have to send a CD to 20 local stations, call them up, see if the program director was interested, maybe get them to agree to carry it. And then send them an agreement and ask them for a check.”

To build an Internet-based alternative, PRX had to basically start from scratch, which meant long nights of former technical director Steve Schultze writing code and running a group of Russian software developers.

“We decided at the beginning that we actually needed to be a technology company. We looked around, there was nothing off the shelf—there were no existing platforms, none of the existing institutions or networks had anything like we wanted to build,” Shapiro said. “There was no podcasting, there was no social media, there were no mobile platforms for audio. No smartphones, no YouTube. I mean, none of that stuff existed.”

Though it was built out of necessity, owning the software has become a strong competitive advantage for PRX. As Glass said in his press release announcing the new partnership, “they’re mission-driven, they’re super-capable and apparently they’re pretty good with computers.”

This American Life had been with its traditional distribution network since 1997, just two years after the show got started. In the public radio world, those distributors often handle a wide range of business services for the content producers: they market shows to radio stations, sell sponsorship packages, collect fees that radio stations pay to carry the show, and oversee the technical side of sending out the audio files.

Despite handing over all of those functions to PRI, This American Life had retained the rights to handle its own digital distribution. That was something the traditional networks typically didn’t care about in the early days of digital audio, Shapiro said, but it’s become an increasingly valuable asset as podcasting and streaming audio services continue to grow.

That digital rights decision would also be key to PRX eventually landing This American Life’s larger business. After the introduction of the iPhone kicked off the smartphone revolution, PRX decided to experiment with developing mobile apps for programs and radio stations. One of its early clients was This American Life.

“Years later, when they reevaluated their overall distribution needs and decided to leave PRI, we of course were one of the first phone calls,” Shapiro said. “Not the only phone call. But we were definitely one of the first.”

In some ways, the switch to PRX is an upset in the public-radio world. Shapiro’s organization is much smaller than PRI—since both are nonprofits in the public-media tradition, you can compare their tax returns. For 2012, Minneapolis-based PRI reported about $17 million in revenue, most of that from program and affiliate fees. In the same year, PRX reported about $3 million in revenue, with more than half coming from contributions and grants.

But the PRX coup also wasn’t a total surprise.

The onetime upstart is now an established player in the industry, and has grown considerably from being an experimental online marketplace. PRX now co-produces original programs, including The Moth Radio Hour, a weekly national show carried on more than 300 public radio stations. It’s also the distribution partner for Radiotopia, a new group of story-driven radio shows led by Roman Mars’ flagship design-and-architecture show 99% Invisible. And to cap off their longstanding relationship, Glass’ former boss at Chicago Public Media, Torey Malatia, sits on the PRX board of directors.

One bit of irony is that although This American Life is now PRX’s most recognizable client, it probably won’t require the most work for the company’s small staff. Since Glass and Chicago Public Media are handling the marketing and sponsorship duties themselves, PRX is in charge of distributing the program over its Internet-based system and billing the stations that pay to get This American Life.

In technical terms, that distribution-system work is already done. PRX’s Internet-based system is capable of streaming audio files directly into the broadcast content management systems that radios use, essentially mimicking the way satellite-distributed shows appear on the station’s end of the transaction. PRX had waited to build that “last mile” connection, and finally pulled the trigger when The Moth Radio Hour became a weekly show that needed to be fed to hundreds of stations.

“We’ve reached a point where we built so much of what they needed, that yeah, it’s not actually a scary, huge stretch that’s going to overwhelm or transform us. It actually sort of fits right in,” Shapiro said. “They have so many stations carrying the show that it gives us more reach into those stations, which will be good. And no doubt, we’re going to make sure everything goes seamlessly—it’s such a hugely important show that we’re going to be very focused on making it work.”

PRX’s bid was probably also helped because it already offered the traditional set of distributor services in an à la carte fashion, rather than an all-in-one package that is the general rule for traditional distributors.

“There are producers—and The Moth is an example—where they actually do want all of the above,” Shapiro said. “But even with all of the above, we still offer a lot more visibility, flexibility, control, transparency—there’s just a lot more, because they’re architected to be available à la carte. It’s different than just sort of saying, `Don’t worry your pretty head, we’ll take care of it.’”

These are immensely complicated times for the media business. As The New York Times’ recently leaked internal innovation report showed, even the biggest names in journalism are often wedded to the systems and routines of the past, despite the obvious fact that digital platforms are the places where growth will happen.

As established organizations struggle with that change, we have seen a flurry of big media names leave their old-school affiliations behind and strike out with new ventures focused on digital: Nate Silver, Ezra Klein, David Pogue, Kara Swisher and Walt Mossberg, and now, Ira Glass.

Yes, even the tote-bag-carrying, jazz-loving world of public radio is not immune to a little capitalism now and then.

“It’s a funny dynamic, because it definitely feels itself to be a bit of a family—we’re all in ‘the system,’ which is how people inside the industry refer to themselves. And it’s also an industry that competes, and actually that competition can be extremely healthy for innovation,” Shapiro says. “We do feel like we’ve got this important role to play of bieng a disruptive innovator, within the family.”

Curt Woodward is a senior editor for Xconomy based in Boston. Email: cwoodward@xconomy.com Follow @curtwoodward

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