‘The question of length is really settled’

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A movement among big-market stations to accept 30-second underwriting spots is turning up the heat on PBS to resolve longstanding discrepancies between national underwriting policies and more permissive practices at local stations.

Some say six of the top ten stations are accepting the longer spots; others count 19 of
the top 20. Among the stations now accepting 30-second underwriting messages are WNET, New York; KCET, Los Angeles; KQED, San Francisco; WCET, Cincinnati; WTVS, Detroit, and KRMA, Denver.

The national underwriting that directly supports production of national programs has slipped in recent years, while local stations’ spot sales have grown–probably surpassing the total for national underwriting in recent years.

“We can reach 80 percent of the U.S. population with 30-second messages on public
television today,” said Keith Thompson, president of Public Broadcast Marketing, a
firm that specializes in spot sales on public radio and TV stations. He contends–although others are skeptical–that even longer, 60-second spots are available on stations reaching 40 percent of the nation.

Underwriting standards have been a contentious issue within the fractious public TV “family” since the 1980s, when a limited experiment with advertising prompted
the FCC to allow “enhanced underwriting” on public TV stations. The change was
welcomed by some stations seeking corporate aid. But PBS and most of its member stations retained stricter standards, and a philosophical rift deepened within the industry.

In 1992, a precipitous 13.5 percent drop in corporate support for national programs
forced an industry-wide reexamination of underwriting practices. PBS moved to streamline its own underwriting rules and enforce station compliance with its stricter standards. A proposal to fine stations exceeding PBS’s 15-second limit on underwriting spots prompted a bitter dispute that ended when PBS dropped the proposal and declared an uneasy truce over the issue.

The system must confront the gap between local practice and national standards, PBS President Ervin Duggan said in a recent interview. He described it as a “major item
on the agenda for public television in 1997.”

“All over the place”

Independent nonprofit “community” licensees, one of the most powerful
affinity groupings in public TV, are leading the trend toward longer underwriter credits.

Federal aid to the field is declining, and each station has its own unique set of
funding challenges. San Francisco’s KQED, for example, is saddled with massive debts. In
Los Angeles, KCET’s income from new members dropped 26 percent in 1995. WNET’s membership
and underwriting revenues are flat.

“There isn’t much government money in those stations,” explains Rob Gardiner,
president of Maine Public Broadcasting. “Government money is one of the biggest
deterrents to commercialism.”

“They’re simply trying to stabilize their income base by not taking for granted
that federal funding will continue to be there,” comments Hal Bouton, president of
WTVI, Charlotte, and an advocate for a more commercial approach.

Bouton and others also say that their acceptance of longer spots reflects the realities
of the media environment. Most underwriters no longer back public TV programs for
philanthropic reasons, and those that only want to reach PBS’s demographic can buy time on
any of the cable clone channels that accept full advertising, Bouton notes.

“Underwriters were looking for a chance to get more of their message out,”
explains Bill Baker, president of WNET. “They want something for their money.

Baker contends the debate over 30-second spots is misplaced. “Length is more of a
red herring than content.” Just because an underwriter’s message is 15 seconds long
doesn’t make it acceptable. “There’s so much squeezed into 15 seconds, it makes it
seem commercial, even if it isn’t.”

James Morgese, president of KRMA, Denver, recently conducted an unscientific survey of
stations known to have gone “beyond the traditional approach” in underwriting
practices. He spoke with 11 licensees about their experiences with looser rules.

“The amount of revenue to be realized varied dramatically from market to
market,” Morgese said. “Some stations are doing well with it, and other stations
think they’re doing well, but they [previously] may have been underperforming with
underwriting and this is a way to supplement that income.” The surveyed stations also
reported that their new approach to underwriting had “no noticeable effect on
membership.”

Morgese found wide variations in the stations’ underwriting practices. “Many have
special policies for children’s and daytime programming.” Some stations allow only
one 30-second spot to air per break, others will load the break with multiple spots.
“They’re all over the place.”

KCET started accepting 30’s last year and reported revenue of $500,000 from them. KQED
grossed slightly more last year and expects to bring in $770,000 from them this year. In
St. Louis, KETC estimates that half of its $1.4 million in underwriting revenue comes from
30-second spots, according to Mike Hardgrove, president.

“We have gotten, for the most part, a fairly understanding reaction,” says
Barbara Goen, KCET spokeswoman. “What our marketplace has told us from research is
that as long as we don’t interrupt programs, as long as we don’t pitch a product in a
commercial television manner, they understand the need for looking at additional ways of
raising revenue.”

American Express takes a trip

Opposition to more ad-like underwriting comes from many quarters–university licensees
and state networks, many of which are prohibited from airing spots that resemble
commercials; small-market stations whose areas lack the economic base to pursue corporate
revenues; and major producers WGBH, Boston, and WETA, Washington, which say the
liberalized local standards make it harder for them to attract corporate support to
national programs.

“This is undercutting our ability to fund the national program service,” says
Henry Becton, president of WGBH. He notes that American Express dropped its support for The
American Experience
and went to a multimarket, 30-second spot buy. WGBH’s program
marketers also find that companies exploring the prospects of public TV underwriting often
choose local buys over national underwriting.

“There are a handful of companies who fit the profile of a national corporate
underwriter that are doing underwriting in select markets,” says Jeff Epremian, v.p.
of program marketing for WETA. “The ability to air a longer message in local markets
has accelerated that somewhat. Stations that are getting the local underwriting grants
think that’s just fine; I’m sure it’s a trend that they welcome,” he adds. “The
long-term effect on producing stations’ ability to deliver programming to them remains to
be seen, but there is bound to be an effect.”

Many station execs view the major-market migration to longer spots as unnecessary, and
point to their own success at building corporate support with 15-second spots. KUED, in
Salt Lake–the 38th largest market in the country–took in close to $1.4 million in
corporate support last year following a “conservative interpretation of the PBS
guidelines,” according to Fred Esplin, president.

WGBH earns $3 million a year in local corporate support, a 10 percent increase over
three years, reports Becton. “We’re doing as well, if not better than stations airing
30-second spots.” Its membership is up 12 percent.

“We are pushing very aggressively to keep our public broadcasting image as
different from the other channels as possible in program content and underwriting,”
says Gardner. “We have found real success.” The Maine network’s program
marketers tell potential underwriters that “it doesn’t serve their purposes to get
too commercial-looking because it turns off the viewer.”

In the country’s 75th market, Maine Public Broadcasting will earn $500,000 in
underwriting this year. Gardner contends that Maine’s income from underwriting is growing
faster than “a lot of stations that are experimenting with 30s.”

Already ratings-driven?

Epremian notes that the revenues to be gained by going to longer spots are measurable.
“You can add them up. But the losses are difficult to quantify.” Stations stand
to lose support from foundations, members and other companies that don’t like the more
commercial environment. “Viewers who can no longer distinguish the broadcast service
don’t announce that they’ve stopped watching or donating.”

Worries that increasing commercialism will erode public TV’s distinctiveness are deeply
held by opponents of longer spots. “Noncommercial television is fundamentally
different from commercial TV,” says Tom Howe, g.m. of the UNC-TV network in Chapel
Hill. “What makes noncommercial television different is its devotion to providing a
service to viewers as opposed to attracting eyeballs. Over time, the more commercial we
become, the more that will change our programming practices.”

WNET’s Baker retorts: the system is already preoccupied with ratings, and underwriters
aren’t the ones pushing it. “Underwriters accept the audience we have,” says
Baker. “Programmers at public TV stations are more audience-driven than
mission-driven.”

But UNC-TV, and other state networks like it, bring another dilemma to the debate over
underwriting practices. Licensed to a state university and backed with state funds, UNC is
legally prohibited from any activities that compete with private business.

“If PBS ran 30-second spots that one would view as a commercial, we could no
longer be a PBS member,” explains Howe. He already views many PBS-approved
underwriting messages as “very liberal” and says the increased commercialization
of public TV in general is an issue that “needs to be resolved.”

Split system, split feed

The $154 million question–representing the total amount of corporate funding for
public broadcasting in 1995, the most recent year for which figures are available–is how
do you resolve this issue when opposing sides have such basic, philosophical differences?

“I think it’s going to be very difficult,” acknowledges Baker. He and other
advocates of the longer spots say that PBS should move to the 30-second standard.

“This question of length is really settled,” says Mike Hardgrove, president
of KETC, St. Louis. “It’s done. You’re not going to reverse that.”

Hardgrove and others suggest that PBS accommodate differences within the system by
offering two satellite feeds. Stations that air longer credits would air PBS shows with
30-second spots; those that retain the shorter standard would take a feed with 15-second
spots.

This proposal has several drawbacks: it would cost up to $2 million annually, according
to Becton; and, with the recent death of Telstar 401, PBS currently lacks the satellite
capacity.

WETA’s Epremian points to another obstacle. “Where is the airtime going to come
from?” If as many as three underwriters receive 30-second credits on national
programs, which air along with the longer local credits, stations will have “no time
to promote programming or membership, and it may get to a point where it’s hard to
distinguish your service from a commercial service.”

“I don’t think the implications have been thought through by everyone.”

Gaps between national and local
underwriting practices are shifting the wealth of corporate dollars from national
producers to stations in the major markets.

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