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Further Notes on the PRI-PRX Merger

Including an interview with PRI CEO Alisa Miller and PRX CEO Kerri Hoffman

“To me, both companies look like two halves of a new kind of whole,” Alisa Miller, PRI’s President and CEO, told me when we spoke over the phone last week. She was explaining how the merger came to be, how talks seriously began only late last year, and how the decision was the culmination of on-going discussions between PRX and PRI about potential collaborations. Kerri Hoffman, PRX’s CEO, concurred in a separate conversation, noting the organizations’ mutual interest in the same question: “Could we make good on our promise to become something much more beneficial to the public radio system?”

The merger between PRI and PRX, announced last Wednesday, is a big eye-catching development that, in theory, would combine the organizations’ respective expertise in linear broadcasting and on-demand audio into a new public media organization that’s better able to take on the American palate and media industry in 2018. The question, of course, is whether, and how, the two pieces will fit together neatly, and in a way that creates something more than the sum of its parts.

At the risk of being so totally obvious, here’s why this move is significant:

  • I’m tempted to say that the merger brings meaningful change to the national-level public radio landscape. But that would be an overstatement for now. As the Wall Street Journal set the context as follows: “PRX and PRI are two of the nation’s four national distributors of programming for public-radio stations and the first to combine operations. The other networks, National Public Radio and American Public Media, are much larger.” And significantly so: in 2017, NPR’s operating revenues were over $232 million, while APM’s operating revenues were $168 million, according to data collected by the Pew Research Center. PRI brought in $18 million, while PRX brought in $8.5 million in the 2016 fiscal year, as dug up by Current’s Tyler Falk. That Wall Street Journal write-up also reported that gross revenue for the combined entity is estimated to be about $38 million in its first year.
  • PRI has been operationally troublesome for a number of years now. The organization’s revenue had decreased by 17% year-over-year in 2017 — its lowest point in the past decade, per Current — and it continues to face operating deficits. In contrast, PRX has had an expansionary few years. Its revenues grew by 75% between its 2014 and 2016 fiscal years, pushed forward by its Radiotopia podcast network, a growing list of ad sales clients, and a technology play in the form of Dovetail, which supports shows like This American Life and Serial. Both organizations may benefit from complementary components that each other previously did not have, but this merger sees PRX’s vision of the industry fully in the driver’s seat.
  • With all this in mind, then, here’s my read: a rising PRX, now armed with significant new assets and multi-platform capacities from PRI, in position to better compete with NPR and APM.

Some details to note:

  • PRX CEO Kerri Hoffman will serve as the combined entity’s new chief executive. Alisa Miller, PRI’s President and CEO, will serve as executive chair of the new organization’s board of directors during its first year.
  • No money will change hands in the merger, though WGBH, which acquired PRI in 2012, is committing $10 million to the new organization.
  • Those new funds will go towards new content development, enhancements towards existing programming, the creation of a production studio, and the expansion of PRX’s Podcast Garage initiatives, according to the press release.
  • The press release also claims that the combined entity will reach over 28.5 million listeners each month across broadcast and web. It will also have a combined 58.5 million monthly podcast downloads.

I spoke to Hoffman and Miller separately last week, a few days after they announced the merger. Here are a few key takeaways from our conversations, which I’ve broken out into sections. Their responses have been edited and condensed, obviously.

I. How the organizations fit together.

Miller: One way to look at this is that we’re melding PRI’s considerable audio production, journalism capabilities — we literally create hundreds of hours of audio programming of various forms each week — and significant reach across platforms, inclusive of broadcast and large social followings, together with PRX’s considerable distribution and technology prowess, along with their commitment to new voices.

One of the reasons this works so well is because of the question at the core of both company’s DNA: how can we create vitality within the public media system?

Hoffman: I was talking to one of our stakeholders the other day, and we hit on a metaphor I liked: we’re kind of like siblings born a generation apart. PRI was born during a creative moment in broadcasting — they were early champions of This American Life and Marketplace — and we, obviously, were born during the early days of Web 2.0 and podcasting.

PRI has two amazing daily shows. The Takeaway is a show that has so successfully transformed itself from a very difficult period, and The World is such a unique production. Both bring something very new to PRX, and when we’re in a position to combine two great daily shows with something like Reveal… well, that’s just interesting, because it’s an opportunity to give some of these journalistic efforts more shelf life.

What I also like about this merger is how it helps us double down on services that stations need. We can be better at giving training. We can build more partnerships around things like the Podcast Garage. We also have Dovetail and other podcast technology that we can use to be better at helping solve station problems.

II. Does the merger lead to better competition with NPR and APM?

Miller: We’re not looking at this as a directly competitive move. Public media is such a broad sphere — this is about serving our collective mission, and I hope it creates even more potential for collaboration with others within the public radio system. The world is an abundant place. People everywhere are craving public media as well as incredible storytelling that happens across platforms, whether they recognize it as public media or not.

III. How does the combined entity square broadcasting with on-demand?

Miller: A lot of the coverage [last week] focused on podcasting… which I completely understand, of course. It’s awesome, it’s growing, and that focus is absolutely accurate in some ways.

But I would also say that broadcast, still, is very important, because it reaches millions and millions of people. Streaming audio, as well. And so it really is a “both” thing. It’s broadcast, it’s podcast, it’s the broader web, it’s social, and it’s also live and in person — people seeing other people. We’re all about producers finding their most engaged audiences, wherever they are.

Hoffman: It’s very hard to make an apples-to-apples comparison. Just because everybody is in the same industry doesn’t mean we all contribute in the exact same way. I think it’s a false dichotomy to separate broadcast and podcast, even though I understand it intellectually. What I’m intrigued by, instead, is how we redefine what “having a show” means moving forward; a “show” vis a vis a “franchise.” The broadcast audience is huge. The digital audience is also huge. But we access them in such limited, specific ways — they’re not comparable.

The Reveal team, I think, explores this really well. They’ve won Emmys, they’ve had an Oscar nomination, they’re doing amazing stuff on the radio, and they have a strong podcast. We have to start thinking more broadly around this notion of content — and I’m not saying anything revolutionary here — but I believe this merger gives us the opportunity to make good on expanding that notion.

IV. On priorities over the next few years.

Hoffman: The short term is pretty obvious: a lot of staff getting-to-know-yous, et cetera, and we’ll be doing an audit around what we have and what’s working. Because PRX has been small for a while now, we’ve developed strong habits around constant evaluation — what are we investing in? What do we sunset? — and so this gives us an opportunity to keep doing that in a different way. I’m excited to work on a number of things: hiring strong talent, thinking through existing partner co-productions, developing more of those.

The Garage initiative has been really successful. The one in Boston has taught us a lot about what creators need. The DC garage is set to open sometime late 2018, early 2019. That’s a real priority, and we’re going to continue evaluating other cities. But we’ve got to prototype these things — work out the kinks, make sure the program is there.

We also really need to work on the skills gap. If we don’t close that gap, it’s going to keep many women and people of color from feeling like they can be successful in on-demand audio. This initiative needs to be doubled-down upon. That’s why we did Project Catapult, that’s why we’re doing so many workshops at the garage. This is an area where we feel like we can have an impact, because that’s growing the field. Podcasting can only mature if it is less “boutiquey” — if there is training and job paths that are meaningful.

V. On imminent restructuring.

Miller: As the organizations come together, we’ll be looking at assessing the new organization’s needs. We haven’t made any decisions as it relates to that. It’s Day One. But fundamentally, this is about growth and evolution. There are more needs and more opportunities than we can both satisfy alone as healthy, sound organizations. How can we come together and do even more?

Hoffman: The way I see it: mergers are naturally bumpy. Everybody’s job is changing, including mine. And there are categories of change: some people will report to different people, some people may have their jobs shift to different cities than the one they live in. We really have to make sure that we have the right person for the right job.

VI. On the new entity’s name and branding.

Hoffman: Oh, I’ve seen the Twitter jokes. The thing about brands in the world we live now… you know, a “brand” is such a nuanced thing. It’s not like one brand works well all the time. The PRX brand is really important for when we go out and talk to funders for things like Project Catapult. In some scenarios, you want the Radiotopia brand to lead the discussion; with other scenarios, Ear Hustle, 99% Invisible, and Criminal are the right brands to lead.

So, we already do a kind of “brand hierarchy,” and I think if we tackled the whole branding thing so early in the merger, we would be inviting things to grind to a halt.