A Perspective for Carnegie Corporation’s
meeting about public BROADCASTING
November 14, 2007

In the United States—but in no other major country—public television came after commercial television. Elsewhere, because it came first, public television established itself across the whole spectrum of content—from news and sport to all forms of entertainment, information and education. Commercial television, when it arrived (generally in the 1950s and ‘60s), was largely modeled on the norms already established by public television, and it took 30 to 40 years in most countries for commercial companies to win the biggest sporting and entertainment contracts and thereby to establish ratings dominance—although, even today, a lot of public broadcasters are highly competitive in ratings terms.

American public television, by contrast, was established in the wake of commercial television. It should, according to the 1967 Carnegie Commission, “include all that is of human interest and importance which is not at the moment appropriate or available for support by advertising.” So there was never any intention that it should be part of the mainstream of popular television: rather, it was to be an extension of the system of educational stations that covered almost two-thirds of the U.S. population in 1967, and that already boasted its own national program service.

The Business Plan
Having ruled out advertising as a source of revenue, there was no real argument about the business plan that would be imposed on public television. In Britain in the 1920s it had been possible to enforce a business plan that said (in not quite so many words): “Pay the BBC an annual license fee for your radio [later television] receiver, or go to prison.” Most people elected to pay, and they still do, which is rather more surprising. In the United States, 45 years later, this was never really an option—not a politically viable one, at any rate. Instead, the easy way out was taken: the business plan of the educational stations already in existence was adopted, with the important addition of a provision for federal funding through the newly invented Corporation for Public Broadcasting (CPB), which received Congressional appropriations and then spread out the money among the stations. It wasn’t very much in 1968 (just $5 million) but it grew over the years and has eventually come to average about 16 percent of public broadcasting’s total income—a useful core on which to base a budget, especially if (as was intended but has almost never happened) the Congress authorizes multiyear funding three (or, for one giddy moment, five) years in advance.

The business plan of the educational stations in 1967 was based largely on a quaint mixture of grants (from state governments, local authorities and university licensees, as appropriate), sponsorship (not on any account to be thought of as advertising) and philanthropy, and this became the lot, by inheritance, of public television. As a business plan, it never worked well, but it did work tolerably well in the early years when most communities had a mere four to ten stations on the dial (very little cable, no satellites, no VCRs) and when PBS was compiling a raft of exciting new series, several of which are still on the air 30 to 40 years later. In the late 1970s and early ‘80s, however, a torrent of new cable channels arrived, many of them devoted to the content niches that public television had pioneered. Programming costs rose astronomically, would-be sponsors became harder to find, local programming declined and the average viewer’s dial became seriously crowded. The business plan kept pace into the mid-1980s, but it never seemed to have any way of answering developments in the industry. And that, of course, became a much more crucial consideration in the last years of the twentieth century, as a whole new world opened up before us: the Internet, broadband, digital television, cell phones and the like, bringing with them massive societal changes in the ways we learn, do business, get news and receive entertainment.

In pure dollar terms, it is possible to argue that the business plan has coped. In 1990 public television’s total income was $1.24 billion. In 2005 (the last year for which there are published figures) it had risen to $1.78 billion. But a business that relies so significantly on its philanthropic income needs to look with special care at the line items that show how deep are its roots in public esteem. The 1990 statistics show that a total of 5.1 million Americans subscribed $280.7 million in that year (an average of $55.04 per subscriber). In 2005 the total dollar amount had risen to $369.5 million, but the number of subscribers was very significantly reduced (to 3.7 million), even if their average contribution was a good deal higher ($98.84).

Public television has many accomplishments to boast of in its first forty years, not the least of which is the recognition factor of its brand. PBS is constantly cited as one of the half-dozen most recognizable brands in the nation, which is hardly surprising when you consider that most American children are raised on its preschool programs. So criticism of public television’s business plan is not to suggest that the system itself is in danger of collapsing. There is, maybe, a feeling that it has been treading water for some years, and it is no surprise that those years have coincided with a period in which stations have been striving to fulfill an unfunded mandate from the federal government to switch to digital technology. That switch has largely (but not entirely), and very expensively, been achieved. Most public stations will be ready to turn off their analog transmitters by the appointed day—February 17, 2009—and become all-digital operations. But that, in itself, is the reason that the business plan so urgently needs reconfiguring.

When you read the Carnegie Commission report of 1967—or even the much more turgid prose of the Public Broadcasting Act—it is as if public television has been waiting all these years for the digital revolution to happen. The system was predicated on a nationwide network of healthy stations. Carnegie I devoted the first of its twelve recommendations to underlining this fact and pleading for the stations to be properly financed. They never were—partly because of the inherent weakness of the business plan, partly because licensees failed to fulfill their responsibilities, but mainly because the stations never had the wherewithal to establish themselves within their communities as genuine community partners. If there were new revenue streams available to them, then it would be within their communities that they would be found, but the continuous rounds of pledging and fundraising were all that most stations could manage. Contributing to their communities through local programming and services became increasingly rare as the first forty years rolled by.

Now, however, the stations have technology that enables them not just to “push” content from their transmitters to the viewers’ receivers. It also enables the viewers to be participants—to “pull” content at times, and to places, that suit their convenience. Digital technology makes television compatible with, and interoperable with, computers, cell phones and other broadband communicators. In all of this, public television is ideally positioned to be a community enabler, to become the sort of “hub” or nexus of a community that forward thinkers foresaw as far back as 1967. Among them was President Johnson, who stated, “I believe the time has come to stake another claim in the name of all the people, stake a claim based upon the combined resources of communications,” and called for creation of a network of knowledge, incorporating computers, satellites and other means.

The Local Imperative
If the business plan upon which public television is based is to be altered in any way, then it is highly unlikely to happen in Washington. It is something the stations will have to do for themselves. Years of waiting for the Congress to move toward some other form of funding—a tax on the transfer of commercial licenses, a tax on households having a television set (as in Britain), a portion of the proceeds from spectrum auctions, and many other proposals—have gone nowhere. There is no real incentive for the Congress to move on this issue, and a lot of disincentives. The stations, on the other hand, do have incentives (survival, growth, new revenues)—and public television’s Washington-based institutions (CPB, PBS and the Association of Public Television Stations, or APTS, which is the lobbying arm) have just as many incentives to help them.

It may not look that way, but in public television everything percolates upward from the stations. They are the sovereign institutions—the ones with digital frequencies and licenses to broadcast. It is true that CPB distributes $400 million in federal funding, but, by law, it sends 89 percent of it directly to the stations according to a pre-set formula. PBS, of course, is the stations’ own membership organization: it provides services (including national programming) to the stations, who own it. So everything comes back to the stations. There are 355 of them (168 licensees) scattered across the nation, but to describe them as a single entity would be nonsense. They are 168 entities, each of them sovereign in its own territory, with the health of the whole system dependent on the health of the stations, which is dependent on the health of the national system and so on.

Breaking out of this vicious circle is not going to happen by divine intervention, nor even by federal mandate. It requires the stations to take the initiative—actually, lots of initiatives, station by station. Almost every one of them has to reinvent itself as a community institution. Yes, they will continue to be broadcasters first and foremost, but they will certainly need to operate on other platforms as well (most of them already do, to some degree) and they will certainly need to form partnerships with, and within, their communities (something far too few of them do in any meaningful way). These partnerships, in turn, will almost certainly require the rethinking of established guidelines for editorial control, financial responsibility and other traditional roles in broadcasting—but that’s fine: there is little that is sacred about those guidelines, other than the requirement that each licensee takes sole legal responsibility for everything that is transmitted over its airwaves.

No one, least of all the stations, is talking of throwing out the old business plan and substituting a brand new one. The dream of being able to abolish pledge weeks is just that—a dream. Moreover, most of the component parts of the old plan still work, to a greater or lesser degree. The problem is that they don’t add up to much more than a marginal existence, and a marginal existence for the stations means that PBS’s National Program Service will deliver a lot less than its full potential.

As a generalization (and admittedly generalizations are dangerous when you are talking of 168 separate licensees) what has to change is the relationship between stations and their communities.

That relationship has often been defined more by competitiveness than by partnership. Stations are perceived by other community institutions as competitors in fundraising. Moreover, they are generally viewed as the Goliaths of local fundraising (in terms of noise made rather than cash raised) because they use a very big megaphone for the purpose: their own airwaves. Nor do they customarily offer that facility to anyone else; why would they? And when partnerships are formed with other community institutions, the partnerships most frequently break down over the issue of shared control. Broadcasters have traditionally objected to such a concept on grounds that production and editorial control do not work well when they are shared or exercised by some sort of committee—and anyway, broadcasters know best!

So why should things be any different now? Partly it is because the broadcasters are very aware that you don’t have to be a broadcaster to make effective use of digital and broadband communications. If you have content, you can produce it and distribute it yourself, often as effectively as a broadcaster can. Partly it is because broadcasters don’t possess, and cannot afford, anything like enough content to fill the far greater number of outlets that digital technology gives them. It is not just the innovation of multicast broadcasting, which enables them simultaneously to transmit four or five channels on a single frequency, but also their online operations, which lap up video content at a great rate. Partly it is because it is clear to many stations that the only possible way they have of expanding their sources of revenue is by expanding their community service.

The biggest change public broadcasters have to make in order to accommodate all this is a change of culture and attitude. Changing their attitude to their community neighbors, with all it implies about partnering, sharing and editorial control, is radical enough. But far more scary, in all probability, is coming to terms with what “content” means. Broadcasters have always thought about it as “programs,” but in the digital age content is as likely to involve the distribution of services (health information services, social services, educational services) as it is the transmission of familiar 30- or 60-minute programs. And whether it comes in the form of services or programs, the content is much more likely to belong to someone else (a local museum, a hospital, the city government) than it is to the public broadcaster.

Partnership and collaboration and sharing are the watchwords of this new kind of broadcasting, but the realities of those words are not easy for broadcasters to accept, accustomed as they are to “pushing” their product down a one-way transmission line, on their schedule, under their total control.