A Profitable Weekend Commercial Break for Public Television

THE OPEN MIND
Guests: William F. Baker and Larry Grossman
Title: A Profitable Weekend Commercial Break For Public Television?
VTR: 9/9/97

I’m Richard Heffner, your host on The Open Mind, and today I’m in the rather unusual posture of probing the opposing points of view of two distinguished public-television leaders I’ve known for years now on a subject of singular importance to them, to me, and to all of my viewers, namely: How best to find the dollars needed to help this wonderful medium not only survive, but also grow and thrive.

Of course, I first dealt with this subject 35 years ago when I helped acquire and activate Channel 13, WNET here in New York, serving as the station’s first general manager when it went on the air in September 1962. So that I trust I’m forgiven the sort of fatherly pride I feel as I see how wonderfully well Channel 13, and public television generally, now serve our nation.

But the problem of finding the dollars to maintain high quality on the air remains. One of my guests has suggested as a partial solution what he calls “PTV Weekend,” a total of eight prime-time weekend hours of commercially sponsored programs. The former president of PBS, the Public Broadcasting Service, and then of NBC News, Larry Grossman does find support for what he calls “PTV Weekend” within the public-broadcasting community. But there is much opposition to it as well, as from Dr. William F. Baker, the enormously successful president and CEO of Channel 13, WNET here in New York, who I would first ask what informs his opposition to Larry Grossman’s call for this rather lengthy commercial break for public television. Fair question?

BAKER: A very fair question. First, of course, you know, first we owe you a debt of thanks, and the community owes you a debt of thanks, and the nation, because you were the guy that really started Channel 13, and its people like me that stand on your shoulders. Larry Grossman’s a friend of mine, even though he’s sitting next to me with a gun pointed at me. And I respectfully disagree with his position about the potential of advertising on the weekends for public television, for the simple reason that I feel, unlike the jobs that Larry’s had, I’m running, day-to-day running the flagship of the public-television system. We have the most members of all the public TV stations in America. And I’m what I would call “down in the field,” or “down in the trenches,” or wherever the heck I am. And I have a direct communication with the people who are watching and are supporting our television station. And I can tell you that if we took a vote of those members I would say without question there would be a resounding and unanimous vote against heavy commercial, or commercialization at any time, weekends or any other time, because it is those people who are the critical piece of our support, the ones that have kept the station alive during thick and thin, the ones that have pressed the government to keep funding public television, etcetera, that have said to us, “Look, we want you to be different. We don’t want… We think that you’re already more commercial than we would like to see, but enough is enough, we don’t want any more.”

So I think my opinion starts there. My opinion starts down in the field with the members.

HEFFNER: Larry? Up from the field.

GROSSMAN: Well, I certainly can understand Bill’s concern, and I have enormous respect for what he has done and what you have done for Channel 13, but I’m really worried very much about the future of public television, which is more necessary than ever now in this new digital age. Here is a whole industry, a system whose money is declining, viewer contributions are either leveling out or being reduced, corporate contributions through underwriting, which are enormously important in the programming side, account for almost 30 percent of all the programming money, I think have probably too much influence but are critical and they have many more places to go now. We know that the government support is declining. And we’re entering a digital age where public television is going to have to come up with three-quarters of a billion to a billion dollars to convert itself in order to be able to get into the digital age. The question is: Where is all that money coming from?

But the most important concern is the programming, the very product. Less than half of public television’s entire budget goes into programming. And the core programs of public television are the same now as they were 20 years ago when I was running PBS, and that’s a worrisome situation. Only there are fewer of them.

So I think, as the competition increases through cable, as there are more options, public television has got to begin to examine new ways. And one way is limited advertising, modeled on what has been done in Channel Four in Great Britain and other places. There are many media that are partially supported by advertising. The whole purpose of it would be to supplement, enable it to provide substantial revenues to enhance production budgets of major new programs on weekends, appealing to adults, not for children. And I think it is foolish at this day and age to preclude a whole stream of revenues. When it takes money from corporations with expanded underwriting and has all the appearance of advertising and none of the real income that it can engender, and it is figured out how to live respectively with government funds, which are probably the most dangerous of all.

HEFFNER: Bill, let me ask, let me take one of these points that Larry has just made, the notion of enhanced underwriting, and the question of whether what he is suggesting is, in fact, terribly much different from what Channel 13 or other major channels are doing now with enhanced underwriting.

BAKER: The answer is “Yes.” Well, a couple things. First of all, the business plan, the only business plan that I’ve seen that makes any economic sense — and I too was a commercial broadcaster for over 30 years — was one, given the kind of programming that we do and the ratings that we obtain, is a plan that would put commercials interrupting programs. So, first of all, that would be a great difference from what we do right now. We don’t interrupt any television programs of any kind.

The second is that there is a considerable difference between programs, between underwriting announcements that actually go out and sell products, that ask people to buy, that show price points, that put on 800 numbers, etcetera, than the kind of corporate identification, the softer kinds of announcements that we put on public television and Channel 13 in particular.

So I think, and also I know, that the audience is sophisticated. I mean, we already have plenty of commercial television in this country. The thing we need less of is probably commercial television. And I think that the bizarre character and the bizarre way in which we were cobbled together as an institution has made us a unique American institution. And as poor and as miserable a wretch as I am out there, begging for money, I think that that nature and that character of that institution is one of the things that gives us a kind of unique dignity and unique relationship to the audience that I think would go away if we became just another commercial institution.

The other is — and the bigger picture, and this is where Larry and I can respectfully argue until the lights burn out in this studio — is that, over time, that if you take money from people who want to sell products, who are selling, doing commercials, they’re wanting to sell products, ultimately you’re going to be subtly driven by the numbers, by the ratings. Because… And will the programming be terrible programming? Will there be nude bowling on public television? Or car chases, or whatever? The answer is, “Of course not.” You know, that would never happen. But when you have a chance to kind of put on a program that gets a larger rating — you know, it’s like that nature program or something — compared to a program that gets a little lesser rating, a show like, you know, a discussion show like this one, you’d say, “Well, you know, they’re both good shows. You know, the advertisers would want, they want more audience, so let’s…” You start making subliminally those kinds of decisions. And I think ultimately we again would just be driven by the commercial imperative. That’s not where we are today, and that’s what has given us our unique character.

HEFFNER: Larry, this seems to be the crucial point, the one that Bill has just made.

GROSSMAN: The slippery…

HEFFNER: What happens…?

GROSSMAN: The slippery-slope argument.

HEFFNER: Yeah.

BAKER: Uh huh.

GROSSMAN: First of all, there are many outstanding media that are partially supported by advertising that have not corrupted their standards or lowered their quality or anything of the sort. The Library of Congress’ magazine “Civilization” won the Outstanding Editorial Award. The New England Journal of Medicine, the New York Review of Books, The New York Times. So that if you have a strong sense of mission and a real sense of purpose, there’s no reason that advertising should undercut your standards any more than government money or corporate money to attract underwriting. In fact, one of the things that advertising enables you to do — which public television now cannot do — is develop programs that meet your own priorities and needs, as opposed to programs that meet your underwriters’ priorities and needs. And there’s nothing that drives one down the slippery slope faster than poverty. It’s hard to believe, for example, if the BBC, whose world service is supported by government appropriation…

BAKER: Right.

GROSSMAN: …and the government appropriation is diminishing, now, if the BBC were to accept advertising for its world service network, would it undercut the quality or character, or subvert the nature of the news that it presents or the programs that it presents? Of course not, because the BBC is an organization that has great strength and great sense of leadership and a great sense of mission. So that it seems to me foolish to proscribe one limited way of getting money that can get very substantial amounts of money without turning the place into… In fact, it would be a business disaster to turn it into just another commercial enterprise.

The plan that we have suggested calls for limited advertising that would provide no arbitrary interruptions that would…

BAKER: But still would interrupt programming.

GROSSMAN: …it would come only in natural breaks…

HEFFNER: What is that? I read your essay. What does “naturally break” mean?

BAKER: Natural break every four minutes.

GROSSMAN: No, no, no. There are seven minutes of advertising proposed. The quid pro quo would be that the program…

BAKER: Seven minutes an hour.

GROSSMAN: …an hour, for these eight hours…

HEFFNER: For each of these eight hours.

GROSSMAN: The quid pro quo would be… No, it’s considerably less than commercial, and not quite…

HEFFNER: One would hope what appears on Channel 13 would be considerably less…

BAKER: Maybe 30 seconds an hour.

GROSSMAN: And the advertising would be clustered and would appear only between scenes, between acts, between programs. These are the kinds of regulations and requirements, just as underwriting guidelines, that would be set by public television itself. The point is it’s a way that will bring in new, major resources to supplement public television’s programming in a significant moment.

BAKER: Richard, is there a natural break in this program? Should we stop right now…

HEFFNER: At the end of 30 minutes.

GROSSMAN: Is there time for a commercial break?

BAKER: [Laughter]

HEFFNER: Larry, come on, now.

Let me ask you both the same question. I don’t want to be unfair. I’ll ask you both. What’s the downside of your respective positions? Fair?

GROSSMAN: Oh, sure. That’s why this is cast in the form of an experiment. There are many unknowns. Although a business plan has been put together, and a lot of research has been done, advertisers have said they would support it, many public-television systems around the world have been enormously successful in accepting limited advertising. Channel Four in Great Britain is a very good model. It’s probably the most successful network in Great Britain at this point. And indeed the head of the BBC, both BBC channels, Michael Jackson, went to run Channel Four when Michael Grave left. And they had a special mandate, so that, which was total, and they are totally supported by advertising. And on the BBC itself, as the London Times Sunday Reporter, is moving into advertising because they cannot continue the world service with the lowering appropriations that the British government is providing to it. And they have undertaken, gone to Sacchi and Sacchi, a major advertising agency, to attract advertising to the BBC’s world network. And they have said the same thing that we have said: “We will not downgrade our services. We will not subvert our programming. The people understand that it’s a normal way of proceeding.”

BAKER: I think all that’s easy to say, and I think that it’s also very hard to measure. Because, again, they’re not going to do programming that is terrible programming or that is offensive in some ways.

On the other hand, they’re going to, when they make decisions, they’re going to make subjective decisions, saying, “Well, what kind of a segment on this news program is likely to get us a better audience?” than “Well, how do we really feel journalistically we should do this?” I mean, Channel 13, if we were taking Great Performances and putting it on the air, if it were commercially driven, we would never put an opera on. We would probably never put a symphonic concert on. Because those get much lower numbers than other fine musical programs that we could put on that would certainly be great performances.

HEFFNER: Do you think otherwise?

GROSSMAN: Oh, of course. The business plan that we have put together actually is based on the same audience numbers that Channel 13, that PBS now gets. And it’s shown that we can raise as much as $100 million without corrupting or corroding or undercutting the programming.

HEFFNER: How do you get to that “without corrupting or corroding?” How do you respond to Bill’s point about king numbers?

GROSSMAN: King numbers drive for-profit enterprises whose responsibility is to bring the largest possible numbers down to the bottom line.

HEFFNER: Those are your advertisers, right?

GROSSMAN: Those are the advertisers, but those are the managers and the stockholders of the commercial networks and the commercial stations. But the New England Journal of Medicine takes advertising, and it is not depleting or degrading its editorial content in order to accept advertising. I don’t believe The New York Times or the New York Review of Books does that. And I certainly don’t think the BBC does that. The idea that somehow advertising is tainted money, and government money is not tainted, and corporate money is not tainted, and even during the weeks of viewer appeals, which you do not gear your programs to get the Three Tenors, and so on.

BAKER: … of course do.

GROSSMAN: …to do that. So that it all depends not on the source of money, but on the rules and guidelines and leadership and sense of mission that you have in terms of under what conditions you take that money.

BAKER: I still disagree with that. And I also think that the diversity of our funding base which we have right now, I mean, we have member dollars which are about a third of the money that we bring in, we have corporate dollars which are about a third, we have government money, state and federal, which are about 15 percent, something like that, and then, you know, other forms of income. It’s that diversity that has given us our strength and our uniqueness. I think that if we add a commercial layer to this, that we risk, we risk at least losing our membership base. And if we risk that, if that comes unwound, that’s certainly the end of public television as we know it today.

HEFFNER: Do you think you’re, that may come unwound…

BAKER: That’s what our members tell us. I talk to them. You know. I mean, you know, these are the people that I deal with.

HEFFNER: Do you think it may come unbound — Just let me ask this question, Larry — anyway?

BAKER: No.

HEFFNER: You don’t think that cable…

BAKER: I don’t, no, no… I don’t think so. I mean, I think what happened recently — and I think it’s good to remind our viewers how important they were and remain — that when the government tried to zero us out, that without any help from us, they went to their congresspersons and Senators and said, “You can’t cut public television; it’s too important.” I think that this is a unique institution, that the public knows what we are, loves us, and will continue to support us if we don’t let them down, if those of us who are running the institutions don’t let them down. And this is one of the areas where they’ve kind of very clearly spoken in my ear saying, “Bill, don’t let us down.”

HEFFNER: But, Bill, what are you going to do about the major point that Larry makes, and that is dollars, dollars, dollars, that they’re there…

BAKER: I mean, obviously I’m with Larry and respect him and love him. It’s just that we have a difference of opinion on this one. And I wish I had, I wish there were a silver bullet, and I wish, I believe that it were this. Again, I was a commercial broadcaster for over 30 years myself. I just don’t feel it is the silver bullet.

I think we can do better at what we do. I mean, I think Channel 13 in New York has already proven some of what I’m saying. We have been able to raise an endowment from zero. The station five years ago had no… We’re the size of a university, and we’ve been operating this large institution with absolutely no endowment. We’ve been able to raise a lot of money for an endowment because we went out and worked on it and tried to do that. That doesn’t support all programming, but it helps keep, keeps the institution alive from year to year. And I just think we can do better in philanthropy. I think, in fact, we can do better in government funding. I don’t think those are necessarily numbers that are going down. We have, you know, because the economy in the New York area right now is rather brisk, we have seen more corporate underwriting lately from a number that had been going down. So, I mean, I think that there, I mean, I think it’s always going to be hard, and I think for some reason that’s part of what we are. I mean, you know the people want to see me suffer. [Laughter] And here I am. And we’re prepared to suffer. But I think that, but I think that that has what, that, in a sense, that poverty, that honesty is what has made this such a unique institution and one of the reasons why I’m so proud of it.

GROSSMAN: Well, honesty I’d go along with, but poverty…

BAKER: [Laughter] Poverty you don’t believe in.

GROSSMAN: Poverty does not buy programs…

BAKER: Well, that’s true.

GROSSMAN: …or enable you to produce programs. And it’s scary when Channel 13’s budget, this year, operating budget, is less than it was five years ago. And that is true of all of public television, at a time when it has increasing competition, when it’s got to face a digital age. When you go into digital in the next three years you’re going to have to do some commercial enterprises, even if it means splitting off some of the stations and making money from them. And it’s time to start at this point. And all the evidence — I mean, that’s what’s so interesting to me, and why I’ve turned around from my initial opposition — all of the evidence and the experiments that were done on expanded underwriting on stations that provide with FCC approval 30-second, in effect, commercials, called “expanded underwriting,” in the brief period when eight stations tried, in effect, selling advertising, the successful stations have shown that viewership did not go down, that viewer support increased as their audiences increased and the programs got better. This is not a silver bullet; it’s simply a way to find some more money to preserve that balance that, I agree with you, Bill, is so important to public television. It’s not all funded by the government, and it’s not all funded by corporations, and it’s not all funded by viewers. And this is one more piece to fit into that puzzle, that jigsaw puzzle that you’ve put together…

HEFFNER: Of course, the question that occurs to me, Bill — and I think you do have to address it — you’ve been a whiz, you’ve been successful. You’re in New York. I’m not saying you wouldn’t do the same thing in other major cities. But what about the rest of the public television community? How is it going to be served?

BAKER: Well, I mean, I think a couple things. First, we’re in New York, and New York is a special place, and people are philanthropic, and they care, in New York. But in many of the cities in this country, and perhaps most of the cities, I am really proportionally, in some of the smaller communities in America, more people give to public television than they do in New York. Matter of fact, that’s one of the things I’ve been talking to our people about, saying, “Given the fact that we’re in New York, we should be doing even better than what we are doing. We’re doing well because, of course, we have a large audience.”

Larry, though, said something just now that I want to put a pin in and I don’t want to lose, because it’s something that I do agree with. And that is there’s this digital age, which is a longer discussion, but in the digital age is that all of the television stations in every city in America will be given a second television station. It’s like all of us being AM stations and we’re suddenly given an FM station by the Federal Communications Commission. On that second channel we will be able to do various things. And one of things that we can do because it’s a digital channel is multiplex, meaning we can put several television channels on one channel. It will grow over many, many years, perhaps many decades. People will require different television sets, new television sets, to use this. But ultimately, on those channels, I could see one of those channels being a commercial channel that helps support public television. But taking our primary channel, the channel now that people are supporting and understand and know it for what it is, and tinkering with that in a significant way, which I think putting advertising, even on one or two days a week, is a significant way, I’m against that because I think the risk is too great.

GROSSMAN: I this day and age, standing still is falling back. Public television is not only standing still, it is already falling back. And it simply cannot afford to. And we need it. I mean, we are all here in support of what is a desperately important service to be provided in entertainment, in education particularly, in information, in children’s programming. And yet public television is facing increasing competition with less and less money. Something’s got to be done about it.

BAKER: Larry, we are not falling back. I can’t let you get away with saying that. We fell back, and we’re going forward again. I mean, yes, Channel 13’s budget was cut dramatically. We regrouped, we tightened our belts. The station is now growing again. Next year we’ll have a larger budget than this year. That’s a positive sign. That’s a sign of growth. Our audiences are stronger now than they were two or three years ago. It’s ironic too, and interesting, that our audiences in public television, on Channel 13, are four or five times the level of audiences of the most successful cable networks. So the people, the audience, hasn’t given us up. They’re out there watching us. So, again, I’m sensitive to them, because they’re our ultimate constituency.

HEFFNER: Well, I have one question, and it’s for Larry. Larry, why two nights a week? Why not seven nights a week?

GROSSMAN: Well, I think seven nights a week would be foolish. The purpose of this is to supplement the PBS national program schedule, over two nights, from 9:00 to 12:00 on Friday night, and from 7:00 to 12:00 on Saturday night, where the public-television programming has been relatively weak, where PBS does not have a national program service. It’s a way of trying an experiment, to see if all the terrible things that Bill says begin to come pass, in which case you abort the experiment immediately. But without killing the whole system.

HEFFNER: Of course, to get a little pregnant, and then to say you can stop the experiment, is a dangerous thing.

GROSSMAN: Well, but, you know, that’s what people said when government money came in. It was not until 1976-77 that the federal government came in. Before that everybody was scared to death that somehow federal support of public television would bring the government right into programming.

HEFFNER: And what I’ve just been told is to say goodbye. Goodbye, Larry, goodbye, Bill. And thank you both for discussing this extremely important question. Obviously our lives, our futures, our honor, all of us, is at stake in this question. Thanks again for joining me today.

And thanks too, to you in the audience. I hope you join us again next week. And if you would like a transcript of today’s program, please send $4 in check or money order to: The Open Mind, P.O. Box 7977, FDR Station, New York, NY 10150.

Meanwhile, as another old friend used to say, “Good night, and good luck.”

N.B. Every effort has been made to ensure the accuracy of this transcript. It may not, however, be a verbatim copy of the program.