People on radio need to be very careful about what they say without thinking about it ahead of time.
Back in 1981, Garrison Keillor of Prairie Home Companion fame, offered listeners a free poster for the fictional Powdermilk Biscuits if they wrote in. Much to their surprise, 50,000 requests arrived in the mail – the printing cost alone was going to be $60,000 that MPR didn’t have.
MPR’s head William Kling smelled opportunity. He decided to use the free poster to promote selling other types of merchandise like coffee mugs and T-Shirts. It worked. The sales more than covered the costs of the free posters.
As the venture grew more than MPR could handle, Mr Kling set up a for-profit venture in 1986 called Rivertown Trading Company to sell mugs, t-shirts, music CDs and other merchandise. By 1998, the company was generating $200 million a year in sales, and by 2000 had generated a total of over $175 million in net income. The money was plowed back into an endowment to fund the operations of MPR.
Public Radio is not immune to the problems hitting the radio business. Having loaded up on well compensated staff during the good times, and now facing competition from other entertainment sources, and reductions in giving, Public radio is having to reduce staff and cancel programming that isn’t generating enough listener interest.
MPR has the largest network of full power FM public radio stations in the country, and has used them to leverage other income by renting tower space to cell phone companies and wireless broadband providers, as well as forming the backbone of the state’s EAS emergency communications network.
The beginning of the MPR story is here, but it’s a very complex story with many moving parts. The key thing to take away from this is that “non profit” doesn’t mean you can’t make a lot of money.