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Airing commercials rejoins list of revenue options for public TV

Originally published in Current, March 20, 1995
By Karen Everhart Bedford

Public television will initiate the first in a series of fast-track talks on its future funding, with meetings this week at both CPB and at the lobbying group America's Public Television Stations (APTS).

CPB's policy and issues review panel for television will meet March 22-23, 1994, to consider whether and how reduced federal contributions should be reallocated within the system. And across town at APTS headquarters on March 24, the CPB panel members will join with APTS's station planning advisory group and other station leaders to begin deliberating a long list of alternative funding options.

System-wide talks will proceed rapidly as the public broadcasters rush to develop their own options by June, so that the field's positions can be considered during the House of Representatives reauthorization process, according to Mike Schoenfeld, CPB spokesman. "It's in our interests to move quickly and deliberately to stay in front of the process, rather than get behind it,'' he said.

Key congressional leaders already have begun talking in specifics about how public TV can support itself without federal funding. A proposal for advertising by Rep. John Porter (R-Ill.), chairman of the Labor-HHS appropriations subcommittee, which he floated March 1 in a private meeting with public broadcasting's "president's group,'' has reopened debate on a previously proposed revenue source that has been historically divisive and controversial.

Sources within the field emphasize that advertising is one of many ideas that public television must consider as it ponders a future bereft of federal support. Profiting from leasing out excess spectrum, proposed at the same meeting by Rep. Jack Fields (R-Tex.), chairman of the telecommunications subcommittee, is another option that congressional leaders have asked public broadcasters to explore, according to David Brugger, president of APTS.

And then there's APTS's own "Long List of Options for Public Broadcasting's Future Federal-Local Relationship,'' a revised version of which went out to stations late last week. Included in the first draft were proposals to support the field innumerable ways -- from increasing public broadcasting's share of program-related ancillary revenues, to advertising, to allocating funds from spectrum auctions, to creating an endowment to support the field.

Changes in the draft were based on 85 "thoughtful responses'' from station executives and included mostly modifications to ideas already proposed, according to Ric Grefe, v.p. of APTS.

Advertising, Grefe said, "really is just one of the issues. I don't think it got any more attention than endowments or spectrum fees.''

But with the support of Rep. Porter, who will play a key role in shaping public broadcasting's financial future, the field must at least explore advertising as an option and its potential income.

"We need to talk about it because people on the Hill keep seeing it as a great idea,'' said Bernadette McGuire, APTS research and planning director. She has hired communications consultant Paul Bortz to "run the numbers'' on potential national and local ad revenues. Lehman Brothers, a Wall Street firm that CPB last week selected to research and analyze potential funding alternatives, also will look at commercials as one of many ideas, according to Schoenfeld.

Criteria that both APTS and CPB have laid out for their consultants and stations to consider in evaluating the field's options emphasize preserving or strengthing the noncommercial nature of the system. Whether public television can move toward increased reliance on ad revenues without abandoning its original public-service mission is one of the most hotly debated questions in the system's history.

Whom shall ye serve?

Opponents of advertising, who say their position is shared by the vast majority of stations, contend that airing commercials will put public TV on a "slippery slope'' toward ratings as primary motivation. The nature of programming will change to appeal to the lowest common denominator, and the field eventually will abandon its original mission of providing educational and public services not offered by commercial broadcasters.

"We would sell our birthright for a mess of pottage,'' said Fred Esplin, g.m. of KUED, Salt Lake City.

As an example of what would become of a commercialized public TV, PBS President Ervin Duggan pointed to the ad-supported A&E; cable network, which was launched with "noble ambitions of artistic excellence and quality.'' Now the cable net relies on network reruns of Columbo and Rockford Files.

Duggan acknowledged that PBS could become a commercial service. Its brand name is "powerful and well-recognized . . . [and] associated with excellence,'' an valuable asset that could be cashed-in. "The reality, however, is that our entire behavior, the entire driving force of public broadcasting would inevitably change.''

"Choose ye this day whom ye shall serve,'' he quoted from the Bible. "No man can serve both God and mammon.''

Others see public television's move toward enhanced underwriting, and local stations' use of less stringent FCC-approved underwriting guidelines as proof that ad opponents' dire scenario is overstated. "We have been forced to migrate in this direction in incremental steps,'' said Raymond Ho, president of Maryland PTV. He believes that further loosening restrictions on advertising would bring back program underwriters who have left the system in the past decade.

"We have been challenged by operating a mass medium and not succumbing to the lowest common denominator, and we have met that challenge remarkably well,'' said Rick Breitenfeld, president of WHYY, Philadelphia. Allowing advertising on public TV would simply be an "extension of that challenge.''

His station was one of ten that participated in a PTV ad experiment in the early 1980s that was part of a comprehensive examination of potential revenue sources for the field undertaken by the Temporary Commission on Alternative Financing for Public Telecommunications (TCAF). Congress created TCAF to supervise the experiment and study other funding options; Breitenfeld himself served on the panel.

Although in the end the FCC found that the potential risks of advertising far outweighed its revenue potential, Breitenfeld pointed out that the study's results showed no impact on programming, while "stations made money -- this station made $1 million -- and the audience was virtually indifferent.''

While advertising would help WHYY sustain itself in the absence if federal support, Breitenfeld recognizes that it won't be a panacea. "The real problem with advertising, to my thinking, is not, 'Oh, God! We'll look like everybody else.' It's that some of our brethren can't do this as easily as others among us.''

Both Breitenfeld and Duggan noted that many state networks are barred from carrying ads, and college licensees would, in Duggan's words, "look with horror'' on advertising.

"There is no consensus favoring commercial broadcasting within the world of public television,'' said Duggan, adding that commercial broadcasters would oppose any such move by public TV. He estimated that only 12 to 20 PTV stations are "eager to break free of the bonds that restrain public television from doing commercial advertising'' and have made appeals to Congress and the FCC. "[W]hat is missing, however, is a credible, persuasive and forceful appeal to their colleagues that would carry the day.''

For these reasons, Duggan continued, "quick commercialization of public broadcasting is not at this point a realistic alternative.''

Clusters don't earn enough

Even those enthusiastic about advertising's revenue potential say they're not sure it will work, particularly under the limits that Rep. Porter has talked about. Porter has proposed "clusters'' of ads to run during primetime and only at the beginning of a program.

"It's misleading to think there's a huge amount of money there,'' said Ho. Primetime ad clusters don't "give you much inventory,'' said Michael Hardgrove, president of KETC, St. Louis. Public broadcasters could continue offering a commercial-free block for children's programming, but would need the remainder of the broadcast day to have a chance to succeed with commercials, he said.

Not only that, but extended clusters of commercials won't exactly be inviting to advertisers. "That's begging people to go channel-surf,'' said APTS's McGuire. "As an advertising environment, that's not swell, especially if we're going to depend on it for money.''

While everyone agrees that no single approach is going to work for every station, Hardgrove and Breitenfeld both favor a proposal to launch TCAF II, with the specification that the new experiment be conducted on a broader scale for a longer time period.

Others say the system must move quickly and decisively. "The fact is that from all appearances the clock would seem to be running right now,'' said Marty McLaughlin, v.p. of corporate affairs for WTTW, Chicago. A decline in in federal funding already is "on the horizon.''

"We cannot afford to waste any more precious time,'' said Ho. "We must move expeditiously to protect our market position'' or witness the "further downward spiral of public television as we know it.''

The TV policy panels

CPB appointed a Public Television Issues and Policy Task Force to discuss whether and how the corporation's television grants programs should be revised to respond to reduced federal appropriations for public broadcasting. APTS also has invited members of this group to participate in its Alternative Funding Forum, which on March 24 will review and refine a list of funding options for systemwide talks early next month. Asterisk (*) denotes membership on both the CPB and APTS panels.

Members of the CPB panel include:
Jeff Clarke, g.m. KUHT, Houston
Fred Esplin, g.m., KUED, Salt Lake City*
Susan Howarth, executive director, Arkansas ETV
David Liroff, station manager, WGBH, Boston*
George Miles, president, WQED, Pittsburgh
James Morgese, president, KRMA, Denver
Lee O'Brien, executive director, WSIU, Carbondale, Ill.*
Jim Pagliarini, g.m., KNPB, Reno, Nev.
Judy Stone, executive director, Alabama ETV
Peter Downey, PBS senior v.p.
John Hollar, PBS executive v.p.
Bernadette McGuire, APTS planning and research director.

APTS's station planning advisory group also will participate in the alternative funding forum. Its membership includes:

Henry Cauthen, president of South Carolina ETV and CPB chairman
Burnill Clark, president of KCTS, Seattle
Mark Erstling, g.m. of WPSX, University Park, Pa.
Hope Green, president of Vermont ETV
Maynard Orme, president of Oregon Public Broadcasting
Allan Pizzato, g.m. of WSRE, Pensacola, Fla.
Art Singer, g.m. of New Hampshire PTV.

Additional participants in the Alternative Funding Forum include:

William Baker, president, WNET, New York
Mary Bitterman, president, KQED, San Francisco
Patrick Fitzgerald, g.m. of WBGU, Bowling Green, Ohio
Virginia Fox, executive director of Kentucky ETV
Robert Gardiner, g.m. of Maine Public Broadcasting
Ron Hull, associate g.m. for Nebraska ETV
William Kobin, president of KCET, Los Angeles
Mike LaBonia, president of WKNO, Memphis
William McCarter, president of WTTW, Chicago
Richard Meyer, president of KERA, Dallas
Larry Miller, executive director of Mississippi ETV
Sharon Rockefeller, president, or Neil Mahrer, executive v.p., WETA, Washington, D.C.
Mel Rogers, g.m. of KBYU, Provo, Utah
Jack Willis, president of KTCA, Twin Cities

Web page posted Aug. 24, 1995
Current: the newspaper about public TV and radio
in the United States
Current Publishing Committee, Takoma Park, Md.
Copyright 1995


Stations favoring looser guidelines rebel against PBS.