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public TV and radio in the United States
Commercials: divided views
on fundamental question

Bass: advertising makes too few dollars, less sense

This commentary by the general manager of WGBY-TV in Springfield, Mass. was published in Current, May 1, 1995. Steve Bass has managed the station since 1992, and served as a PBS development executive from 1982 through 1991.

Commentary by Steve Bass

The 104th Congress is requiring public broadcasting to reinvent the wheel. But some public broadcasters are busy reinventing the flat tire. Once again, advertising is proposed as a means of providing stable, long-term funding, and some in our industry are rushing forth with proposals to create "nonprofit commercial television."

Unfortunately, this proposal offers few new dollars and even less sense. At a minimum, advertising would have to replace nearly $400 million in revenues from the federal government and from national and local underwriters before providing any relief to the current financial challenges of public television.

According to an analysis prepared by Paul Bortz & Associates for APTS this spring, even aggressive advertising--10 minutes per hour in prime time, interrupting programs--would likely gross around $320 million, nationwide, $80 million less than would be lost. Here in Springfield, WGBY would have to replace $1 million in lost federal funding and local corporate underwriting, plus an unpredictable loss of membership income. That's a tall order in our $21 million ad market that currently supports only two commercial affiliates.

Still, proponents of advertising inside and outside of public television offer many seemingly persuasive arguments that advertising could work. As a skeptical general manager from the 99th Nielsen market (who formerly worked the national and local underwriting beat at PBS), these are my opinions on the arguments put forth in favor of advertising.

Argument #1: "If cable channels can have advertising and can afford to do 'good' programming, so can public television."

Let's ignore that the A&E cable network's daytime schedule consists of off-network reruns like Matlock, and their tendency to do a whole lot more "E" than "A" programming. Cable channels don't make a good comparison because their economics are vastly different from PTV's. The cost structure of public television is more similar to the commercial broadcast networks than cable; economically, we are much more like NBC than CNBC. Cable channels can reach their limited audience with a single technical facility and a satellite transponder and don't invest hundreds of millions of dollars in transmitters to reach 99 percent of the country's population. In addition, they have no local programming expenses or commitment. They can be profitable with much lower revenues than any commercial network--or commercialized public television network--could ever be. According to Cable TV Programming (May 23, 1994), net advertising revenues for Discovery and A&E last year were $116.2 million and $108.5 million respectively. This is clearly not enough revenue to sustain public television.

Argument #2: "Advertising won't change our programming."

Making this claim is like saying that on-air fundraising doesn't affect programming. How many stations don't change their regular schedules for the sake of making more money during pledge weeks? Most stations do overhaul their schedules because regular programs are less effective in bringing in on-air pledges.

If public TV ran commercials, the shift could be more extreme. Some of our regular shows would get no advertising support at all and others would come to be seen as liabilities, compared to more ad-friendly shows waiting in the wings. Many programs would go the way of the Young People's Concerts, Playhouse 90 and Captain Kangaroo, which were broadcast on commercial networks in an earlier era. Look at the stations that are pushing the advertising envelope and you'll see that many have already altered their programming. Reruns of Hill Street Blues and St. Elsewhere already are evening staples in a few markets. What's next?

Argument #3: "We'll maintain a noncommercial children's service"

Even an all-out ban on advertising during children's programming couldn't guarantee this for long. As newly minted commercial stations, how could we justify running programs for children that don't make money instead of more lucrative adult programming? Revenue pressures eventually would ensure that stations would adopt daytime formats that bring in revenue, such as all-day how-to and "infomercial" schedules.

Argument #4: "We would never interrupt our programs — that's sacred."

Have you noticed how the commercial networks are closing up the breaks between programs? They do this because advertisers won't pay as much for spots between programs, and the networks want to minimize tune-out. If public TV adopts a strategy of clustering commercials between programs, we would be selling a lower-valued commodity to the advertising world. It wouldn't take long before we learn what every other broadcast and cable network has known for years--advertising in the middle of programs is better business.

Argument #5: "Advertising will benefit the entire system."

Advertising actually would widen the gap between big and small PTV stations because the vast majority of ad revenue would go to the major markets. Advertising also would cause a migration of revenue from national underwriting, which benefits all stations through reduced programming costs, to local spots in larger markets (this is already happening to an extent right now).

Public television stations would become like commercial independent stations. In small markets, there are few independent stations, although network affiliates can survive. Affiliates get network subsidies for some of their basic operating costs. These subsidies allow them to chase after the local advertising accounts that make them profitable. Public TV stations in small markets would be like independent stations without any outside subsidy and would struggle even harder to keep their heads above water.

Argument #6: "Public TV has an audience that advertisers would pay a premium to reach."

Advertisers generally covet younger viewers. It seems unlikely that they would pay a premium for the public TV audience, which skews older. As an example, the local advertising on Sunday morning public affairs programs on the commercial networks--whose audience demographics are similar to those of many public TV programs--don't sell at a premium. In fact, they can be picked up at bargain rates in the Springfield market. Inevitably, to garner premium rates, we'd have to search out younger consumers.

Argument #7: "Let's just give underwriters what they want — commercials."

While underwriters will fight to get as much value as they can from their credits, many local and national underwriters would have little interest in a commercial public TV. At WGBY, three of our largest underwriters don't advertise in the local media. They underwrite programming on WGBY for their employees and to signal to the community their interest in the quality of life. Such companies wouldn't advertise on a commercial WGBY, and we'd have to make up the losses with many smaller accounts, which have higher costs of sales and administration.

Argument #8: "The TCAF experiment in the early 1980s proved that advertising won't affect membership."

The only thing the "experiment" conducted by the Temporary Commission on Alternative Financing (TCAF) concluded was that advertising would not be a viable financing mechanism for public broadcasting. One station of the original 12 dropped out because it was nearly bankrupt. Aside from testing whether revenues increased or decreased, there was no benchmarking and little thought given to what would constitute success or failure. In fact, membership revenues for participating stations did increase, but because membership revenues were skyrocketing at nearly all stations, this doesn't prove much. Further, it's a matter of speculation how well contributors will respond over the long-term to direct mail and pledge drives when they are bombarded by commercials like those on every other channel.

Argument #9: "Advertising will make public television freer from funding pressures on editorial decisions."

Public television's funding base is the most diverse of any media outlet in the United States. The diversity of these funding sources allows us to withstand unwelcome intrusions in our editorial decision-making. Relying on advertising would be likely to make us more, not less, susceptible to editorial interference. In recent years, Madison Avenue has taken an even stronger role in program development, and many advertising agencies are encouraging their clients to take even more control. If the commercial networks can't withstand this meddling, how would we?

Argument #10: "We can maintain favorable union and copyright arrangements that will keep down our costs of programming."

Compared to commercial television, we save considerably in the costs of stock footage, music and visuals, thanks to agreements with the national guilds of creative artists. For a recent local production, WGBY purchased the right to use footage from the Baseball Hall of Fame for about $500. Our local ABC affiliate was interested in running our program, but we discovered that commercial rights for the small amount of footage would cost at least 10 times as much. Musicians, performers and image owners give us a good deal because commerce isn't our goal. Why wouldn't they want their fare share from a commercially supported public television?

Think about this: no past programming could be aired again unless we cleared rights from hundreds of different rights holders. What a nightmare.

Testing the concept of advertising for public broadcasting is like purposely cultivating a choking vine in your backyard garden. It will quickly become established, drive out more beneficial sources of funding and drive us into the business of delivering eyeballs to advertisers.

If we must explore new avenues for public broadcasting, I look forward to the journey. But before we leave, let's make sure we have a map to tell us our destination down the road, and let's not begin the trip with a flat tire.

Web page posted June 17, 1995
Current: the newspaper about public TV and radio
in the United States
Current Publishing Committee, Takoma Park, Md.
Copyright 1995

Steve Bass



An opposing view from Hal Bouton of WTVI in Charlotte, N.C.