Understanding the PRX Economy
The PRX economy is a key innovation that drives 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, and builds a joint station-producer community of increasing gains.
- A single annual subscription payment by stations permits downloading programs without numerous financial transactions
- A points-based payment system 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
Points are currency in the PRX economy. 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 buys 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 producer's account.
Why we we do it this way:
- Once a station joins PRX, they do not have to handle any direct financial transactions or negotiations with producers — PRX takes care of that.
- A member station has essentially "pre-paid" for programming and has an incentive to use its points and therefore broadcast the pieces it has purchased.
- All of the points are tracked automatically in the PRX database. Stations and producers can view and print reports of these transactions.
The PRX Economy and Royalties
Converting Points into Royalties: PRX royalties are determined by multiplying the number of points (based on the length of the piece) earned by the value of each point. The value of each point is generally determined by the size of the PRX member station buying the piece (each station's PRX membership is figured on a sliding scale). Thus, the larger the overall station membership, the higher the royalty for the producer.
We guarantee a minimum base royalty of $.10 per point ($.50/minute) regardless of the size of the purchasing station. Therefore, royalties for the producer will float up if the purchasing station is in a larger market but it will not drop below $.10 per point.
- If your piece is worth 100 points and it is purchased by a station that has a purchasing point value of $.25, you will earn the minimum $.10 guaranteed by PRX plus an additional $.15 per point.
- If your piece is purchased by a station that has a purchasing point value of $.08, you will earn the minimum $.10 guaranteed by PRX.