Originally published in Current, Nov. 25, 1996
By Steve Behrens
Executives from many of the largest public TV stations gave a hearing last week to Lawrence Grossman's proposal for a two-nights-a-week commercially supported network that would inject new money into national program production.
As a model, Grossman looks to Britain's Channel Four [related story], whose charter commits it to public-service program objectives. "The point here is that it is a commercial network with a special charter that has found both considerable financial success and a good deal of critical success."
The new American network--working title, "P-2" or, previously, "Spectrum"--wouldn't replace PBS, but would supplement it Friday and Saturday nights, during hours when PBS has no "hard-feed" schedule.
To make a success of the plan, public TV stations would need to win from Congress a limited waiver of their fundamental "noncommercial" status, and then attract a somewhat larger audience--an average primetime rating of 2.5 or 3, compared to PBS's average 2.0.
One of the biggest problems for the plan, Grossman acknowledges, is that its economics require interrupting programs to permit the airing of seven minutes of advertising per hour. "Commercial breaks will always be clustered and will fall in natural breaks in the programming," Grossman told Current.
While only a few of today's major PBS producers are for-profit businesses, the Grossman plan aims to harness the profit motive in a bigger way to attract capital needed for high-quality production--capital that nonprofits, by definition, cannot raise themselves. The new weekend network would be capitalized and part-owned by sizeable corporations, "preferably large, compatible partners from the telecommunications industry," according to a recent prospectus. Affiliated public TV stations would also be part-owners.
The private-sector investors would bear the fiscal risk, which could be considerable. All goes well if the network earns a 3 rating and sells 90 percent of its commercial time, and the venture would earn $24 million, according to Grossman's pro forma figures. But it could lose $12 million in a year if it draws an average 2.5 rating and sells just 70 percent of inventory.
The network would also need to draw a bigger share of the young adults desired by advertisers. Grossman suggests that the plan would charge $10 to $15 per thousand viewers in the 25-54 age range.
He has discussed the proposal with a variety of investors, including Channel Four itself, which "expressed interest" in becoming a partner.
Grossman, who served as president of PBS in 1975-84 and later ran NBC News, developed the plan with support from the John and Mary R. Markle Foundation and has been discussing it with widening circles of station executives.
"We haven't talked to anybody at PBS yet, but first we have to find where stations stand on this," he says.
"It's got to be driven by the stations and not imposed on them. I have no financial interest in this at all."
Station executives at the Nov. 20 meeting in Chicago showed "real interest and real concerns," Grossman said afterwards. Managers from most of public TV's Community Station Resource Group attended. This followed presentations at the CEN/EEN annual conference in April and at a Manhattan meeting in August.
James Fellows, president of Central Educational Network [and chairman of the Current Publishing Committee], says he arranged those meetings to assure that the proposal gets a full airing, so that public TV either runs with the idea or shelves it. Fellows also co-chaired last week's CSRG meeting with CSRG coordinator Bill Kobin.
But Fellows remains noncommital about the proposal, like other prominent pubcasters.
"It's an idea we have to take a look at," says Jack Willis, president of KTCA in Twin Cities. But he fears that accepting commercials on the weekend would put public broadcasting on a "slippery slope" to thorough commercialism. "Once you're relying on the income, you have to dance to that tune, broaden the audience, and downgrade programming more and more."
Though some Republican leaders will be open to a marketplace approach, getting bipartisan support for it in Congress would be difficult, Willis predicts.
Raising the issue may clarify public TV's predicament, he suggests. "If the new Congress does not want us to go commercial, they're going to have to fund us," says Willis. "They should bite that bullet. We certainly can't be kept on life support."
The Twin Cities manager likes Grossman's objective of programming that would draw a broader audience and a 3 rating. "If we can reach out to younger demographics and a multiethnic demographic, I think that's our future."
But Willis rejects the option of interrupting programs to squeeze in advertising time.
So does Al Jerome, president of KCET in Los Angeles and previously a commercial TV exec. Jerome says uninterrupted programming is "central to our branding" and helps diffentiate PBS from the cable networks. "In a media environment where there are hundreds of choices, branding your service becomes such an important part of success."
Jerome says underwriting guidelines will have to evolve, and doesn't mind 30-second underwriting spots as long as they don't interrupt shows. Public TV, like any medium, will have to decide what types of ads it will carry. "I'm not sure we are the right medium for every kind of commercial message," he says.
"As we get more aggressive in corporate underwriting, it is incumbent on stations to explain their economics to the public," says Jerome. "The viewers are our owners, so you speak with them as you would with the owner of any business. We're not trying to put something over on someone. We're trying to survive."
Other pubcasters, including several active in the Earned Income Initiatives Group that lobbied in Congress for a "nonprofit commercial" option, are less ambivalent in their support for Grossman's proposal.
Hal Bouton, president of WTVI in Charlotte, N.C., pointed to the idea as a welcome source of future revenue in a September interview with the Charlotte Business Journal.
Bouton told Current that number of experts have studied Grossman's business plan and it "holds up" to scrutiny.
But he doesn't expect Congress to promptly hand over a waiver permitting the commercial service. "We have to take a hard look to see who we need as allies and put it in a frame of reference that is not threatening," Bouton says.
Among those who need to be persuaded are commercial broadcasters. The National Association of Broadcasters was "very effective" this year in helping defeat Rep. Jack Fields' pubcasting bill with its "earned-income" provisions, he points out.
Bouton is already catching flak from the proposal at home in Charlotte. Cullie Tarleton, a nationally prominent commercial broadcaster and g.m. of Charlotte's WCCB-TV, told the Charlotte Business Journal: "Advertising flies in the face of what public broadcasting is supposed to be. A commercial is a commercial. Hal doesn't want to get into that game, because, if he does, it's a war based on ratings. And he can't win."
To Current's home page
Related story: Britain's Channel Four carries ads, but it's structured to be more than a ratings chaser.
Earlier news: Grossman develops P-2 proposal with backing from Markle Foundation.
Web page created Dec. 5, 1996