"We cannot afford to limit our services
to [the broadcast] medium and hope to survive, let alone thrive."
--PBS President Bruce Christensen

PBS links video rights to production funding

Critics of PBS video policy threaten pleas to Congress

Originally published in Current, Sept. 7, 1992

Some say that it could turn out to be a "reasonable" business deal, and others say it's nothing less than "extortion."

They're reacting to a letter that PBS President Bruce Christensen sent to major program producers last month, alerting them that PBS may expect to acquire video rights for programs that it funds.

"Starting with this fiscal year (FY 1993)," Christensen wrote, "PBS will reserve the right to condition its program funding commitments on the availability to PBS of institutional audiovisual and/or home video rights."

Though the main delivery system for PBS remains broadcasting, "we cannot afford to limit our services to that medium and hope to survive, let alone thrive," he explained in the letter.

PBS is reserving the option to put video rights in the package for negotiation, said Senior Vice President Peter Downey in an interview. The network isn't "confiscating" video rights, but only saying they will be part of the package of rights that PBS negotiates to acquire.

The video rights would cover home video, through the PBS Home Video partnership with Pacific Arts Video, as well as institutional video sales through the network's in-house PBS Video operation, and educators' off-air taping.

"When PBS-member stations put up 80 million bucks to cause programs to be made," Downey said, "they're interested in getting full benefit from the investment."

So it is with the CPB/PBS Program Challenge Fund's recent request for proposals for new 8 p.m. series. Applicants for production grants are asked to make available North American video rights "depending on the nature of the series selected."

Wait and see

The network's competitors in the videocassette trade expect to file a objection this month and may ask Congress to restrict public TV [later article]. Independent producers will join with video distributors in protesting the PBS decision through a new coalition, according to video distributor Charles Benton. But some major producers seemed to be withholding judgment. WGBH, Boston, "is not ready to talk through where they're at," a spokesperson said. Several production units declined to comment, and an attorney for a number of producers was willing to speak only for himself.

"On first blush, the policy looks ominous," said attorney Robert Gold, "but the real question is how it will work." Gold said he was not speaking on behalf of his clients, who include Bill Moyers and Ken Burns.

He said it's too early to know whether PBS would actually withhold production funds if it can't get video rights, and whether PBS would pay a reasonable amount for those rights in addition to broadcast rights. If PBS abuses its leverage, producers will find alternative sources of funding and distribution over the public TV satellite, he predicted.

"Wholly different things"

Video distributors were readier than producers to oppose the newly announced policy. PBS has wanted to "monopolize" distribution rights for the best PBS programs for some time, said Benton, chairman of Chicago-based Public Media Inc., parent company of Films Inc., a major distributor of videocassettes to schools and other institutions.

"They have every right to take a leadership position," Benton commented. Though PBS has the advantages of its logo, its advance knowledge of programs, and its ability to put sales blurbs on the air, it has otherwise "competed with us like anyone else" in asking for producers' video rights, he said. "But asking for rights and making them a condition of funding are two wholly different things."

Benton fears that PBS's interest in video will steer its program choices. "PBS is not simply in the business of producing blockbuster hits that will sell in the marketplace," he said.

As an active member of an audiovisual trade group, the Association for Information Media and Equipment (AIME), Benton is working on joint activities opposing the PBS policy. He said the new Coalition for Access to and Diversity of PBS Programming includes AIME, the Independent Media Distributors Alliance and the International Communications and Information Association.

"It's a much larger group of people than a ragtag group of independents," says Lawrence Daressa, of the San Francisco video distributor California Newsreel. By trying to "take over the educational materials industry," PBS is also taking on larger interests such as textbook publishers.

"Since it's almost impossible to make an educational program without [PBS's] money," Daressa said, the network can "extort" video rights from producers.

"We're gearing up the old network for some fun on the Hill," said Daressa, who was active in the successful lobbying campaign to win CPB funding of the Independent Television Service.

"PBS may be raising an issue broader than they wish to admit" by moving beyond the broadcast field, where FCC licensing restricts participation, into the broader fields of video and telecommunications. "There's no reason why it should all be controlled by the same tired collection of broadcast stations when there are a lot of people who can very legitimately participate in public telecommunications as nonprofit entities."

"The technology has really rendered obsolete the people who control the system," Daressa said.

"Yes, we can do that"

The PBS initiative comes at a rough time for Benton, Daressa and other distributors of videocassettes to institutions, said Downey at PBS. The low prices of home-video releases are eating into "audiovisual" sales to schools.

"AV operators are really getting squeezed, and this is not making them any happier," Downey said.

The PBS letter, dated Aug. 3 and sent to "about a dozen" producers, "was a way of saying, 'Don't be surprised that PBS may feel strongly about the availability" of video rights, Downey said. PBS has been observing the policy "for about a year," but "it did seem to be useful to go on the record and say, 'This is something we intend to do from time to time.'"

Some producers object to negotiating for funding, broadcast rights and video rights at the same time, Downey said. "Every once in a while, we encounter a producer who says, 'You can't do that.' This is to say, 'Yes, we can do that.'"

PBS won't seek video rights for every program it assists financially, the letter said, but "when we believe it is important and appropriate to secure these rights, we may require they be provided as a condition of funding (especially in the case of new productions)."

In other cases, the letter continued, PBS may require that it have "the right to match any offer the producer may receive subsequent to PBS funding."

"The terms and conditions relating to PBS's acquisition of these rights will, of course, be subject to negotiation," the letter concluded. "But there will be occasions where the ready availability of these rights will provide an added incentive for PBS and station support."

The policy will not only facilitate public access and educational use of PBS programs, but also strengthen the network's nonbroadcast distribution and its revenues, the letter said.

The growth of nonbroadcast delivery systems "is forcing us to develop a new paradigm where the goal is delivery of programs and services to end users by the best means available," Christensen wrote.

Critics of PBS video policy threaten pleas to Congress

Originally published in Current, Oct. 19, 1992

If PBS doesn't roll back its new video rights policy, an industry coalition has told the network it "intends to seek appropriate relief at the FCC and Congress."

The Coalition for Public Television Program Access and Diversity asked PBS President Bruce Christensen to meet with its representatives next week, but at Current press time PBS had not responded.

The coalition, including groups of video distributors and independent producers, argued against the PBS video policy in a letter from attorney Lewis J. Paper to Christensen Sept. 25.

Christensen had alerted major PTV producers in August that the network would sometimes insist on buying home and school video rights when it puts money into national productions.

With its warning of political action, the coalition laid out a series of arguments with potential appeal to a wide range of members of Congress.

The dispute threatens not only the PBS venture in videocassette sales but may also affect the ability of public TV's existing institutions to make the transition to nonbroadcast media of any kind.

Christensen has said PBS is developing a new "paradigm" for nonbroadcast distribution. And Larry Adelman, a San Francisco video distributor and member of the coalition's steering committee, says in a commentary in this issue of Current that PBS is unnecessarily rushing to dominate nonbroadcast distribution.

Adelman warns that PBS is moving "unilaterally" and "without public hearings and congressional authorization," which will provoke "yet another needless fight in Congress."

PBS Senior Vice President Peter Downey spelled out the PBS position in a Current commentary Oct. 5. Making its programs available to school and home viewers on videocassette "reflects a changed distribution role for public television, but one that we think is entirely appropriate," he wrote.

PBS this month reported gross videocassette sales of $7.5 million, mostly from PBS Video educational sales, but also including nearly $700,000 in royalties returned to PBS by Pacific Arts Video from PBS Home Video consumer sales. In addition, the two video lines returned almost $1.7 million in royalties and payments to producers.

Critics of the PBS video policy draw parallels to developments in commercial media industries. In its letter, the coalition compares PBS's "proposed exploitation of its monopoly position" to the commercial networks' past abuses that led to adoption of the FCC's financial interest and syndication rules. And Adelman says PBS is "vertically integrating like Time-Warner or Sony-Columbia."



To Current's home page

Later news: PBS and producers drop Pacific Arts as home-video distributor, 1993.


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