Royalties: Getting Paid For Your Work

When creating a piece listing on PRX, you set a price for it - in points. When you have a pro account on PRX, those points mean quarterly cash.

Can you quit your day job? Probably not, but you may be going out more often. Read on for information on points, the PRX Economy, and where all of this comes from, anyway.

By the way

As of January 2007 PRX has paid out over $400,000 in royalties to more than 700 producers and stations!

The PRX Economy

The PRX economy is a key innovation that drives the incentives and opportunities for growth for all users of the system. The PRX economy supports a robust marketplace, makes transactions easy and efficient for all, builds a joint station-producer community of increasing gains.

Basics

A single annual subscription payment by stations that permits acquisition of programming without numerous transactions
A points-based payment system that allows for uniform pricing, account tracking, and opportunities to introduce incentives
A formula-based recommended rate for programming that creates a fair and transparent basis for pricing content
A dedicated producer payment pool that establishes a revenue stream for acquisitions

The Points System

First off, what are points?

Points are currency in the PRX economy. Points are a proxy for minutes (the length of pieces) and for dollars (money paid pieces that have been licensed).

Member stations are given a number of points to spend on licensing pieces, and member producers (and station producers) earn points when their pieces are licensed.

For example, when a station licenses a 300-point piece (usually 60 minutes if set at the PRX default rate) 300 points are automatically deducted from the station account and put in the licensor's account.

By using points instead of actual dollar amounts we can more easily automate transactions securely and flexibly and adjust prices and rates.

Points are currency in the PRX economy. Points are a proxy for minutes (the length of pieces) and for dollars (money paid pieces that have been licensed).
Member stations are given a number of points to spend on licensing pieces, and member producers (and station producers) earn points when their pieces are licensed.
For example, when a station licenses a 300-point piece (usually 60 minutes if set at the PRX default rate) 300 points are automatically deducted from the station account and put in the licensor's account.
By using points instead of actual dollar amounts we can more easily automate transactions securely and flexibly and adjust prices and rates.
All of the points are tracked automatically in the PRX database. Stations and producers can view, print, and export reports of these transactions.

Key Features

Why do we do it this way? The points system, subscriptions, and pricing create several notable effects:

Once a station subscribes it does not have to handle any direct financial transactions or negotiations with producers.
A subscribing station has essentially "pre-paid" for programming and has an incentive to use its points, and use the pieces it licenses.
The dollar-per-point and point-per-minute rates create a consistent and neutral market and takes the guesswork out of pricing.
Producers' ability to add premiums and discounts to prices still allows flexibility and control without undermining pricing guidelines.
Producers have the option of donating points back to the pool, to the greater benefit of fellow producers.
Growth of the producer payment pool - a key measure of success for PRX - anticipates PRX expenses decreasing as a percentage of total revenue over time.

There you have it.

PRX Payment Policy

1. Payments are made quarterly and are based on the point/dollar ratio posted at the end of each quarter. The current dollar/point ratio is .10/point.
2. Payments are due only to producers, stations, and groups who have maintained accounts in good standing during the preceding fiscal quarter.
3. At the end of each fiscal quarter the PRX will create a report for each member who has a positive balance of points earned from piece licenses.
4. PRX payment reports take into account various bonus points, trial accounts, discounts, and other administrative factors that may affect the final point total.
5. Payments will be issued by check along with a report within 60 days of the end of the fiscal quarter.
6. Members wishing to get paid must keep their mailing address and contact information up to date via the MyPRX section of the Site.

Payment FAQ

Who gets paid?
Any member of PRX with a current, paid membership gets paid when their pieces, that carry a price, are licensed by stations and others authorized to license. In order to get paid a producer MUST provide PRX with a tax ID number. Send that information by faxing --NOT EMAILING – your legal name and social security number to 802-485-9509.

Where does the money for PRX come from?
Revenue comes into PRX from station membership fees, producer membership fees, grants, and ancillary services. Of these, station subscriptions and grant funding account for over 90% of PRX revenue.

How is the price of my piece determined?
The price attached to a piece is determined by its length; longer pieces carry higher PRX point prices than short ones. But all pieces are based on a default price of 5 points/minute. The price is what someone who licenses your piece pays when they spend PRX points. You have three options when choosing the price of your piece:

Accept the default price of 5 points/minute (300 PRX points is the default for an hour-long piece). This number will show up on the drop-down menu after you have attached your piece.
Double your price to twice the default rate.
Make your piece 'free' by setting the price to zero points. Some producers are funded by grants, for example, that do not allow any kind of income to be made from distributing the piece. If you'd simply rather not receive payment, however, you can always set your piece to the standard rate and donate those points back into the PRX payment pool. Hurray!

Points = money?
The current payment rate to producers is based on 10-cents/point, which equals $.50 per minute at default rate, and $1 per minute at the premium price. A 60-minute piece would generate $30 at the default rate or $60 at the highest rate when licensed by a single station.

PRX occasionally pays a royalty premium for licensed pieces. The royalty rate can rise above the default payment depending on how much money is in the Payment Pool during a given fiscal quarter.

For example, in Q1 2004 the bonus multiple was 4, resulting in a rate of $0.40/point. Again, the bonus is discretionary based on the amount of funds available in the Payment Pool.

What is the Payment Pool?
The Payment Pool is the cash reserve set aside to pay PRX members for points they accumulate from stations licensing their pieces.

The Pool is derived from station subscriptions and other income, and is set by PRX with a goal of creating a consistent, sustainable, and growing source of revenue for participating producers and stations.

PRX station and producer members can also donate their earned points back to the Payment Pool to help increase the rates paid to other members.

What if I DON'T want to charge anything for my piece?
You can set the price of your piece to zero on PRX. It's not exactly the same as giving a piece away for free - many stations pay to subscribe to PRX - but if a station wishes to license and air your piece, no points will be deducted from its pre-paid account.

In general, we encourage producers not to price to zero, at least to "give points a chance." There is currently no way to search for "free" pieces on the site, so it's unlikely that pricing to zero will give anyone a competitive edge; by pricing to zero you are simply forfeiting the points you would otherwise earn. You could, for example, donate your earned points back to the PRX Payment Pool to help increase the rates paid to other members.

There are some producers who are required to distribute for free due to the terms of their funding, so of course they can and should price to zero.

What if I want to charge more for my work?
Currently you can only price your piece(s) within the range set by the PRX Economy. PRX is nonexclusive and you are free to sell or license your work to stations and others outside of PRX.

The PRX Economy is designed to create a fair market for licensing produced radio pieces to noncommercial radio stations. It is not intended to supplant existing sources of production funding or compete with rates for commissioned work.

How do PRX royalty rates compare to others?
For the most part there are no direct comparisons for the PRX marketplace. Prior to PRX if a producer wished to sell an existing piece directly to public radio stations the going rate had been $0. Most stations do not have acquisition budgets for acquiring independent work, and there is a tremendous amount of free programming offered over the satellite and by CD.

Many of the national daily and weekly shows distributed by NPR, PRI, and APM charge "carriage fees" to stations, based on the size and budget of the station. For example, a weekly one-hour arts program from a network might charge small stations $600 per year and large stations $6000 per year to carry the show. So, on a per-minute basis that comes out to $0.19 per minute to $1.92 per minute.

Rates for commissioned work are much higher than for distribution and carriage. National shows can pay from $75 to $200 per minute for pieces that they commission from producers. There are a few local shows at major stations that will also pay $40-$80 per minute.

PRX rates are not intended to compete with or displace commissioned work rates. For the most part PRX is an after-market for existing work.

Do I get paid if I have a free starter account?
No. Only members with paid accounts will be credited for pieces licensed by stations.

How do station subscriptions work?
Stations subscribe annually to PRX on a tiered basis according to annual station revenue. The subscription cost is analogous to an annual acquisition fee for carrying a new public radio network program and is determined through research, cost comparisons, and economic models of PRX operations.

Do station points expire?
Yes. Subscribing member stations are given a number of points each year based on how many hours of programming they intend to acquire. Any unspent points will expire at the end of the year, and new points will be put in the station account at the beginning of the next subscription year.

Stations with starter accounts are given 1800 points (approximately 6 hours worth) and will be invited to upgrade to a full membership when those points run out.