P-2 commercial network proposal for public TV is feasible, Grossman finds

Originally published in Current, May 13, 1996

By Steve Behrens

Lawrence Grossman, a former PBS president, says his study of the proposed advertising-funded network that would bring strong programming to public TV stations is "quite encouraging," though "obviously, it's a longshot."

The new network, which he proposes to supplement PBS--distributing six hours of high-quality programming a week to public TV stations--would be able to spend as much as $1 million an hour on production if it could maintain its target rating of 3.0 or even 2.5, compared to the PBS average of about 2, he told Current recently. The network would have to obtain special FCC waivers for stations to carry commercials.

Grossman--who tried to start an arts cable channel for PBS when he was its president in the early 1980s, and is still working on a smaller-scale cultural channel in conjunction with PBS--wants to bring new resources to public TV so that it can continue to air costly top-quality programming in competition with commercial cable channels.

He put forth the idea in a Senate hearing last September and led a study of the proposal this winter, with support from the John and Mary R. Markle Foundation. Last week, he discussed the results at the Central Educational Network/Eastern Educational TV Network conference in Cincinnati.

The idea is one of several under discussion that would bring together private programming investment with the extensive broadcast reach of public TV stations.

Lehman Brothers, a major Wall Street investment bank, has been discussing such possibilities with pubcasters, CPB confirmed last week. Wing Blake, a Lehman Brothers vice president, declined to describe the possible venture. Blake worked on a Lehman Brothers study for CPB last year that concluded on-air advertising, under certain assumptions, would result in a net loss for public TV stations. CPB's recent involvement has only been to respond to Lehman's inquiry, according to Senior Vice President Michael Schoenfeld.

The Discovery Channel and other cable programmers in the orbit of cable colossus TCI have also held private talks with executives of major public TV stations about possible program deals.

Grossman says he proposed a program service that would regard public TV as its major outlet and would get its capital from a major private investor. That investor might be a firm like Discovery Channel, he acknowledged, adding, "I would go first elsewhere, myself, because I think there are other possibilities more directly in the programming business that are not competing distribution agents." TCI already has enough clout without being given more, he adds.

P-2, as Grossman refers to the proposed network, would be structured like a broadcast network---owned separately from the stations, arranging for carriage through contracts with them. Stations would be partners in the project, with representatives on its board. "Clearly," Grossman adds, "a lot of the structure depends on who puts up the money, and how much, and on what terms."

The new network would supply public TV stations with only certain kinds of programs that earn relatively high ratings by PBS standards. He has in mind programs like a high-profile drama starring Dustin Hoffman, or a satirical series with Michael ("Roger and Me") Moore, or a suspense series.

Other kinds of public TV programs would not be viable with commercial support and would continue to be supported noncommercially, including public affairs and children's programs, Grossman said.

Dark on the Horizons

Grossman also gave a status report at the CEN/EEN meeting about an earlier program distribution proposal--public TV's Horizons cable network. Horizons, which he has been developing with PBS, WGBH and WNET, still lacks agreements for enough cable carriage, and enough capital, to make it viable. In the meantime, he plans a second batch of three pilots for demonstration broadcasts via PBS.

"It's almost impossible for an independent program service to get distribution, unless it's willing to take a good number of years and tens of millions of dollars," Grossman told Current before leaving for the CEN/EEN meeting. Cable operators generally haven't vastly increased their channel capacity, yet they face a clamoring multitude of channel programmers, including big broadcast companies that have allowed cable to continue retransmitting their broadcasts in exchange for carriage of new cable nets.

Horizons expects to make three new pilots from scratch this summer and fall, and offer them to PBS for broadcast distribution, he said. Earlier pilots were based on wonderful preexisting videotapes made for other purposes, Grossman said, but "just were not shot very well."

The new pilots follow the modest-budget, narrow-audience Horizons plan, basing programs on cultural and intellectual events staged in major cities. There are "pretty firm" plans for a tape sampling of Irish and American actors reading James Joyce in a marathon at New York's Symphony Space, for instance. Other possibilities include an evening with the University of Chicago's stable of Nobel Prize-winning economists, and a Civil War parley to be staged at Gettysburg College.

He estimates production costs at about $66,000 each.


Commercial sister network would subsidize public TV

Adapted from Current, Oct. 9, 1995

The John and Mary R. Markle Foundation has commissioned Lawrence Grossman, former PBS president, to study the feasibility of his proposal for an advertising-supported sister network for PBS.

Grossman proposed a "new self-supporting quality network'' in testimony before Sen. Larry Pressler's communications subcommittee on Sept. 12, [1995] the day after the Markle Foundation's board of directors backed the study.

Rather than having some stations begin carrying real commercials on a haphazard, market-by-market basis, Grossman suggests a national network that would offer free, high-quality programs to public TV stations for perhaps six hours a week. In exchange, the network could sell the commercials.

For the rest of the week, stations would use PBS and other noncommercial programs, with subsidy from revenues they receive as limited partners in PBS-2. Though PBS-2 would carry only programs that fit public TV's mission, Grossman expects that civic and children's programs should continue to be supported only through noncommercial means.

Edith Bjornson, program officer with the Markle Foundation, said this is an "elegant'' aspect of the proposal: that the network would not only support its own fare but also give stations income for local public affairs programming and children's programming that wouldn't attract commercial support.

Like the Fox network, the new network would start with two or three nights of programs a week, but unlike Fox, it would aim for top quality. If the new network dropped its standards and started carrying Lawrence Welk reruns, Grossman told Current, the FCC would be able to withdraw the waiver that permits commercials on public TV. He compared the idea to Britain's Channel 4, which carries ads but operates under a mandate to serve alternative audiences.

Stations would not be obliged to participate, he said. Instead, the network would ask them to become affiliates and partners.

"There's been a lot of loose talk about commercials and expanded underwriting,'' said Grossman. "None of it will work effectively in an atmosphere of every man for himself. ... The key for the system is to have a businesslike attitude toward it."

Grossman said the feasibility study for Markle, to be completed by early 1996, will look at potential revenues and costs of the network, the issues within public TV and the legal and political questions involved. "The job is to see if any of this makes sense.'' He will take no fee for the work, Grossman said.

In his Senate testimony, Grossman---who served as news president at NBC-TV after leaving PBS in 1983---also endorsed Pressler's proposal for spectrum fees to support a public broadcasting trust fund as well as reduce the federal deficit. "I urge you not to give away valuable additional frequencies to wealthy telecommunications companies that have already profited spectacularly from the government's spectrum largesse," he told the senators.


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Current Briefing: Commercialism and public broadcasting

Later news: Grossman discusses refined P-2 plan with major station leaders; reaction is divided.


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