Public TV evenly split on 30-second underwriting credits
Study says most productive change would be better management

Originally published in Current, April 5, 1999

By Steve Behrens

If there's a factoid in the PBS Board's $450,000 underwriting study that indicates whether it activates its pending policy restricting 30-second spots, it's from a survey of the public TV stations themselves: virtually half the stations are for the rule and half against.

That "certainly makes it more difficult to legislate a policy," observes Wayne Godwin, chairman of the PBS Board's Membership Committee, which is digesting the findings of the extensive study. "An issue that has been rather divisive within the system remains rather divisive within the system."

Except for the 50-50 split of opinion on the issue, the elaborate set of studies doesn't seem to offer clear evidence indicating PBS should either enforce or repeal its January 1995 policy, which the board left in limbo for four years after a subsequent rebellion by several dozen stations.

The pending rule would impose program-fee surcharges penalizing stations that air 30-second underwriting credits or otherwise violate PBS national underwriting guidelines immediately before or after PBS-distributed programs. PBS contended that local 30's were undercutting the 15's that help pay for national series.

The study did find a proven way to boost underwriting sales, however. "Probably the most significant way to improve performance is to look at your management practices in the underwriting area," says Rob Gardiner, president of Maine Public Broadcasting and chairman of the PBS Board subcommittee that oversaw the study.

Too many stations can't guide their underwriting sales efforts because they simply don't know key facts about how they're doing, he says.

Gardiner and other study overseers reported these and other findings to stations during a satellite videoconference March 26. Findings will be published on paper and online after a brief followup study of stations reputedly most successful at selling 30-second credits and other "enhanced" underwriting.

(Glossary item: for purposes of the study, "enhanced" was loosely defined as "more than what used to be allowed," Gardiner says.)

Board members involved in the study originally aimed to be ready for a decision at the PBS Annual Meeting in early June, he says, but they now want to give station leaders more time to digest the findings. At this stage, Gardiner declines to say where the findings lead him, but he does describe the thrust of the report.

"What it doesn't say is as important as what it does," he explains. "It doesn't say that stations ought to move to 30s. It does say that at those stations that have used 30s, there's no evidence that subscription revenues have been significantly affected."

The findings offer hope for compromise between the station factions that favor and oppose 30s. Station execs generally believe "there is probably [an area] where PBS can operate and another area where stations can operate," says Jeff Clarke, a PBS Board member and g.m. of Houston's KUHT, which airs 30s. "That's what's going to shake out over the course of the next several months."

"I don't think the studies found anything that says, 'don't do 30s'," he says. But PBS will have to weigh the views of "significant opinion-makers," as he calls them.

That's one factor PBS didn't need to learn more about. Rep. Billy Tauzin (R-La.) and Edward Markey (D-Mass.) introduced a CPB authorization bill last year that would trim underwriting blurbs from 15 or 30 seconds down to 10 at most. The two leaders of the House telecom subcommittee "are clearly in a position to reckon with," Gardiner acknowledges, and the cutback "would be a significant problem" for corporate underwriters, judging from interviews done for PBS.

Not watching the indicators

To a "vast" degree, many public TV stations don't keep or use basic data they would need to manage their underwriting sales efforts, says Chris Dann, a San Francisco consultant who oversaw the study for the PBS Board.

"It sounds terribly critical about the system," Dann comments, "but the fact of the matter is that every one of us finds that for our businesses to succeed in the future, we have to operate differently than in the past."

In some regions, key indicators don't necessarily apply, Dann adds. In rural places, businesses may still regard underwriting as philanthropy instead of marketing, but that's changing.

"It boils down to trend analysis and the ability to have a better handle on the normal financial facts one would have," says Jeff Clarke.

In case studies of eight stations, researchers found supporting evidence: the degree of staff training in underwriting sales was one of the factors most closely related to sales success, according to Gardiner.

Stations that need to upgrade their practices will get help this spring from a separate project by the Public Broadcasting Management Association. Results of PBMA's first annual report survey of best practices--in underwriting and other areas of station operation--will be published this spring, says Maura Grogan, project manager.

Stations will receive custom reports indicating how their performance compares with benchmarks--national averages of their peers. It will cover measures such as underwriting sales compared to total ad spending in the market and the number of local viewing households; selling costs; and net revenue per account executive. Later, Grogan says, PBMA will offer training on how station execs can use the data.

Members, stations, underwriters quizzed

The stations asked the PBS Board to commission independent research on "enhanced underwriting" practices in a resolution during the PBS Members Meeting in October 1997. That research will end up costing about $450,000, including $200,000 contributed by CPB, Gardiner estimates. Chris Dann managed the research, farming out pieces to different research firms.

Case studies of eight stations. To see whether policies on "enhanced" credits are helping or hurting station revenues, Arthur D. Little Inc. was asked to look closely at four stable stations that accept 30-second credits (KERA in Dallas; WNIN in Evansville, Ind.; WHYY in Philadelphia and KNPB in Reno) and four that don't (WGBH in Boston, KUED in Salt Lake City, North Carolina's UNC-TV and Wisconsin PTV).

"We couldn't find a pattern that relates enhancement of the credits to underwriting or membership performance," summarizes Gardiner. There was a possible, positive relationship between enhancement and the average revenue per underwriter, which Dann calls "a no-brainer."

The researchers don't claim that the eight-station study was a valid national sample, with results that can be projected nationally, Gardiner emphasizes. In fact, the consultants didn't compare results from one station with others, according to Dann; they looked for trends and effects within each station's experience, over time.

Surveys of station members. The board hired Yankelovich Partners to do phone surveys of 500 station members in each of two markets, Boston (home of the relatively purist WGBH) and Philadelphia. And the results were not as different as expected. Gardiner interprets the results as meaning that members get used to stations' practices over time. The people surveyed were "retained" members--those who had renewed their memberships at least once.

Interviews with national underwriters. Yankelovich also did extended interviews with 18 past and present corporate underwriters. Most were less interested in credit length than permissible content.

System-wide survey of underwriting practices. Chris Dann himself managed a survey of the stations, which yielded responses from 122 of the 178 licensees.

The survey found that stations' policies are generally consistent with PBS guidelines. In practice, stations allowed different "degrees of enhancement," Gardiner said, but the range was not very great. Very few credits at any stations were more than 15 seconds long.

The political findings were more dramatic: most stations want more "enhancement," one-third say they don't comply entirely with PBS guidelines and half believe PBS should't penalize stations for 30's. "That says this enforcement issue is going to be a hard one," remarks Gardiner.

Review of earlier studies. The project also drew on more than a dozen earlier studies with such findings as: people don't like program interruptions; they see all television becoming more commercial, and public TV not the most so; and there's no reliable formula for determining what makes certain credits unacceptable.

In Gardiner's view, the continuing debate reveals a "totally healthy" tension among public TV leaders. "It shows there is vitality--concern about long-term financial health, about the mission and not just the [short-term] dollars," he says. "I think any general manager worth his salt should be torn by these objectives."

To Current's home page

Earlier news: Many major-market stations sell 30-second credits, 1997.

Current Briefing on public broadcasting's non-federal revenue sources.

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