Another editorial on federal funding of public broadcasting

[TheBigA]

Here's what I don't understand: if a station is making it financially with their unique Public Radio format, why would they drop the format if the NAB's teeth could be knocked out of their lobby and non-comms had the option to run commercials.

You're changing the nature of the beast. You're basically taking a woman, pumping her up with male hormones, changing her physical characteristics, and then asking why she doesn't kiss you like she used to. There's a scary thought. And the changes might not be as dramatic or instantaneous. It took a long time for commercial radio to sound the way it does. And there are some commercial stations that are run like non-coms, and vice versa.

This is a debate that's been argued at the Public Radio Conference for 35 years. One one side, you have a handful of rich stations that want to play in the big boy world, and you have the vast majority of college professors who like the educational world. You're seeing one of the issues that led to the civil war, with the industrial north battling the rural agrarian south. The folks in Congress fight that battle every day.

Once again, commercials don't come from the same part of a company as underwriting. The Ford Foundation is not the Ford Motor Company. These are different things and they expect to be treated differently. And some stations are ready for the change and could handle it easily. But most would have huge problems.

And like most things in government, you don't just eliminate regulations. It's a very tangled web that's been woven in Washington. You have lots of intersecting lines. The way these things play out, they might eliminate some rules, while creating new ones, to ensure all parties are taken care of. That creates a whole new set of problems, as we discovered with the Prescription Drug plan a couple years ago. And then at what point do changing the funding rules for non commercial radio affect the Tax Code, which is the holy grail in DC. It's one thing to cut $400 million from appropriations. It's a whole nother thing if you can also grab ahold of some of their money and turn it into a revenue source. That's how the FCC changed from regulating in the public interest to selling spectrum space. If you think that didn't change the very nature of that agency and how they work, you haven't been paying attention.

 

[MattParker]

@Aaron: Some advertisers would be very comfortable within the public radio's restrictions on advertising/underwriting announcements. I've lived and worked in several markets which (at the time) had commercial classical music stations (and in a couple of them, jazz stations). These stations, like public radio now, delivered an elite audience to advertisers who wanted to reach it. Volvo dealers. Mercedes dealers. Bank trust departments. Brokerage firms. Carriage trade retailers (Nordstrom's, Bonwit's and the like). These kinds of advertisers aren't on the radio any more but I still see their ads in the glossy local magazines most cities have. That's whom public radio be selling/developing. Not the usual suspects of commercial radio. For all its stated intentions to reach minority or urban audiences, public radio is an elite medium and at least part of its appeal is snob appeal.

And before you say it, yes, those commercial classical and jazz stations aren't around any more. Part of the reason is public radio started competing with them in those same formats for those same listeners. Many fans of those genres decided they didn't need to have their music sullied by commercials and switched allegiances to the competing public station. Then they decided they didn't need to pledge either and therefore many public radio stations have dropped music formats.

Much of public radio's impact has been to kill off certain types of programming in commercial radio: Long-form news. Classical. Jazz. AAA may be next. How can a commercial station directly compete with a station that doesn't pay taxes and instead gets money from the government, from listeners (who get tax deductions) and from sponsors?

 

[TheBigA]

Part of the reason is public radio started competing with them in those same formats for those same listeners. Many fans of those genres decided they didn't need to have their music sullied by commercials and switched allegiances to the competing public station.

That's absolutely not true in the three major cities I've studied: WGMS Washington, WQXR New York, and WCRB Boston.

In the case of WGMS, this was a heritage classical station that was still Top 10 in the ratings, competing well in overall numbers against other formats. The public classical station, WETA was much lower in the ratings. However, the thing that killed WGMS was its aging demographic. Advertising agencies don't like aging demos, and recommend against them for their clients. The death blow came when a major jewelry store stopped advertising on the station. Declining revenues, caused by an aging audience, killed WGMS, not increased competition from WETA. A non-profit station isn't affected as much by the age of a station's audience. It's providing a membership service. In New York and Boston, the public stations took the commercial classical format, put it on a weaker frequency, and turned their primary station to a news/talk format. So obviously they recognize classical will be a money loser, but they're a non-profit anyway.

By the way, in all three cases, the audiences of the former commercial classical stations are extremely unhappy with the new non-commercial stations. They feel their music has been made the poor stepchild of a larger operation. In Boston, there have been numerous editorials about the way the Boston Symphony has been treated. In New York, the Opera has lost significant revenue because of the loss of a commercial radio outlet. Typically orchestras get commercial positions to sell as part of their deal with radio stations. They've now lost that in those three markets.

The idea that a non-com could attract advertisers seeking an "elite" audience is a nice theory but runs into the same brick wall commercial stations hit: The age of the audience. The reason companies like Rolex and Fidelity don't advertise on the radio isn't because of the format, but because of the age of the audience. The ad agencies have determined that radio is an inefficient way to reach customers of those services. That opinion holds regardless if the station is commercial or non-commercial. It's idealistic to believe those opinions will change because of losing in funding regulations.

As far as public radio "killing off" certain formats, I suggest it's more self-inflicted. Triple A suffers from multiple problems from an aging audience to one with a splintered musical taste. That is more likely to kill the format on commercial radio than increased non-commercial competition.

 

[bturner]

I'm glad commercial classical music stations were brought up. I think that if you take a look at the evolution of the FM dial you can make a good case for Public Radio remaining non-commercial. We would need to agree that greed is found in people and can rear it's ugly head at both commercial and non-commercial stations.

While the FM dial was draining money from their richer AM counterparts, there were many classical commercial FMs. As listeners flocked to FM, companies began to seek out wider appeal formats that offered greater success monetarily. The result was only a few classical commercial stations could stand the test of time. Granted a few markets have very successful commercial classical FMs.

I think, The Big A, what you are saying is the commercial changes attitudes and opens the door to greed taking control in Public Radio. A tiny dirt clod tossed in a puddle soon turns the water from clear to murky. In other words, if the commercial was allowed, in time, the commercial could dictate the format.

MattParker points out what we should all know. Public Radio attracts a rather exclusive list of clients who find a comfortable setting in Public Radio to market themselves very effectively. It needn't be the foundations for an underwriting base but those businesses striving to reach an audience that will acknowledge and find favor with the unique qualities offered by a business. From what I have observed from observing marketing, those companies that offer, many times the same product or service, bring their own aire or exclusive twist to the product or service that makes it better than the norm in the potential customer's eyes. Look at chocolate candies. Hershey bars and the numerous 'more exclusive' brand names that typically carry a much higher price tag. Whether the quality of the chocolate is great enough to justify the higher price is usually not considered, it is the 'exclusive' quality of the brand. The same goes for car 'brands'. The name implies better quality but we all know the name itself is a big factor in the price. This is not to imply these companies offer average products at above average prices but I am saying the names imply an exclusive feel, much like a club that restricts membership to a select bunch. It is this sort of advertiser that seems to be the more likely candidate for underwriting.

From an 'advertising' perspective, consider this: With all the price and item commercials and the limited time sales, if a business already offers a fair price for its product, why reduce the price for a limited time to reach the small universe of people ready to buy at that very moment. $10,000 off dealer invoice doesn't sell cars to people not in the market to buy a car this week. 50% off Maytag Washers and Dryers doesn't make you buy if your washer and dryer are working fine. Is price and item really as effective as we tend to think it is? I know I shop around for a good price when I buy something but I do not buy what I don't need. In this scenario, would I tend to visit the business that underwrites versus the commercial advertiser. My answer is I will visit the business I hear about frequently because I assume them to be successful and a place where I can get a good deal. It is not the sale or price and item that brings me to their door but the fact I have heard about them several times that will make me 'shop' them and they'll likely top my list. Certainly 'familiar' brings a level of comfort and trust to the potential customer. Hearing about a business several times develops comfort and trust in the potential customer. After all, all underwriting and advertising can do is bring potential customers to their door. It is how that company handles the rest of the experience determines if I make their cash register ring.

 

[Talk_Dude]

@Aaron: Some advertisers would be very comfortable within the public radio's restrictions on advertising/underwriting announcements. I've lived and worked in several markets which (at the time) had commercial classical music stations (and in a couple of them, jazz stations). These stations, like public radio now, delivered an elite audience to advertisers who wanted to reach it. Volvo dealers. Mercedes dealers. Bank trust departments. Brokerage firms. Carriage trade retailers (Nordstrom's, Bonwit's and the like). These kinds of advertisers aren't on the radio any more but I still see their ads in the glossy local magazines most cities have. That's whom public radio be selling/developing. Not the usual suspects of commercial radio. For all its stated intentions to reach minority or urban audiences, public radio is an elite medium and at least part of its appeal is snob appeal.

And before you say it, yes, those commercial classical and jazz stations aren't around any more. Part of the reason is public radio started competing with them in those same formats for those same listeners. Many fans of those genres decided they didn't need to have their music sullied by commercials and switched allegiances to the competing public station. Then they decided they didn't need to pledge either and therefore many public radio stations have dropped music formats.

Much of public radio's impact has been to kill off certain types of programming in commercial radio: Long-form news. Classical. Jazz. AAA may be next. How can a commercial station directly compete with a station that doesn't pay taxes and instead gets money from the government, from listeners (who get tax deductions) and from sponsors?

That statement I bolded in your post is something more people need to understand. Attempting to compare radio today with the situation back in the 1960's and 70's when the "beautiful music" FM stations converted to mass appeal formats is totally bogus. Times are very different today. I'll wager that just as cable TV networks like the Discovery Channel and A&E took over carrying much of the programming that used to be the province of public television, and made a profit doing it, if the bandwidth being used by government subsidised public radio were turned over to entrepreneurs, they could have similar success running public radio style programs on commercial channels.

All it could take would be a small rule change to limit ownership of the newly-commercialized stations on the left end of the dial to only one local owner or locally held corporation.

 

[MattParker]

@BigA: I don't dispute your data. You've clearly done a lot of homework on this. I do question the assumption, which a lot of people seem to share, that age-prejudice in the advertising industry is a key factor. Product managers (on the client side) and media buyers (on the agency) side also deal in data. If a product's core consumers are 50 plus, then that's how they target their media buys. Now, human - and corporate - nature being what it is, marketers put more emphasis on attracting new consumers and even expanding the market to new demos. So, they might try to sell Rolexs to young dudes and refrigerators to Eskimos. Those attempts usually don't last long (and neither do product managers who try them). That DC jewelry store is probably still advertising - just not in radio. What many, especially in radio, don't want to accept is evidence that marketing and advertising people have decided that radio - any radio, to any target demographic - is not effective and does not provide an effective return on investment. There is a lot of advertiser-targeting of fifty plus people - just not much in radio.

I have also observed, at least in the context of public radio, classical music lovers also feel a strong sense of entitlement. Somebody is not going to like it whatever you do, and they complain - loudly.

@Talk_Dude: Good point. Too bad the FCC did not see fit to use VHF channels five and six to expand the FM band. That plus IBOC sub-channels. It would be interesting to see what might have happened.

@btuner: Absolutely, right. Greed raises its head in both commercial and non-commercial broadcasting. Commercial radio has stock holders who expect stock prices to go up and dividends to be paid. But both commercial and non-commercial managers are judged (and paid) by how much money they can bring in. Classical music has been dropped on many public radio stations because news-talk brings in more money. If a station has a choice between Car Talk and On The Media, guess what decides which gets cleared. Public radio managers seldom look away from the bottom line (and their own raises and bonuses).

 

[johnbasalla]

The nation is up to its ears in debt. Federal spending MUST be lowered, not just on this topic, but others as well. Defending the continuation of federal funds to broadcasting by saying, "it's so little, actually" doesn't change the fact that everything will help and is needed.

 

[TheBigA]

All it could take would be a small rule change to limit ownership of the newly-commercialized stations on the left end of the dial to only one local owner or locally held corporation.

That's not a "small rule change." That changes the very nature of the operation, makes it a de facto commercial radio station, and changes its tax exempt status. And commercial stations simply will not let it happen without a fight, and some kind of give-back. There hundreds of commercial radio stations that operate that way now, with one local owner, and are on life support. If the former NCE stations can air commercials with other revenue sources, why not them? I know a lot of commercial AM operators who would love to own non-commercial FM stations IF they could run them as commercial stations. The current rules keep the wolves out of the hen house.

I do question the assumption, which a lot of people seem to share, that age-prejudice in the advertising industry is a key factor.

It's not an "assumption." It's a fact. I deal with these agencies every day, and all they care about are numbers. Why else would an ethical company like Bonneville take a Top 5 radio station like WGMS, donate its assets to WETA, and give up what was once a profitable format? Are they stupid? Are they crazy? No. The advertising for the format dried up, and it would not improve just my moving the format to a commercialized non-commercial station. In addition to the three stations I mentioned, you can also study the recent change for KING in Seattle. This was once a locally owned commercial classical station that was at a funding crossroads: Either sell to a non-profit, or become non-profit itself. It chose the latter.

I have spoken with fringe format commercial owners who'd like to retain their bluegrass or Americana format, but simply can't attract advertising support. These owners are considering becoming non-commercial, member supported stations, to get the tax benefit, and become member supported. It's the only way to go when you're in a fringe format. Elite or boutique radio stations are simply inefficient. It's more direct to reach those same people online or in print. Call it "The grass is greener on the other side" syndrome.

Historically, non-commercial radio stations received a loosening of regulations many years ago. There was a time when a non-com couldn't show a logo or air a jingle. They can now. They can describe the product or service in detail. That was prohibited in the early days. The thing they can't do is break into programming with a funding announcement. It must occur at a top or bottom of the hour. They can also credit multiple funders, which is very close to a cluster of commercials. So other than airing an agency-produced spot, with a call to action, I don't know how much further these stations can go. And as I said, once they shift from working with a marketing person to someone at an agency, the nature of the transaction changes.

 

[TheBigA]

Defending the continuation of federal funds to broadcasting by saying, "it's so little, actually" doesn't change the fact that everything will help and is needed.

Great. I have an easy solution: Defund the Voice of America and Armed Forced Network. You want to get the government out of broadcasting? That's an easy way to do it. It's a government funded propaganda service that is not allowed to be heard on US soil. It's a waste of taxpayer money, because it doesn't benefit Americans, and the budget for the two services is in excess of what the government gives to CPB.

 

[johnbasalla]

"The budget for the two (V.O.A. & Armed Forces) services is in excess of what the government gives to CPB."

...That doesn't change the fact that it will help, and everything is needed. You pile up enough of the programs and organizations that might say... "Well, we only get a small amount from the Feds" and then you'll have a pretty good amount of savings. As for V.O.A. and the Armed Forces network, if it's needed for National Security, then it can be defended. Still, cutting their budgets somewhat should be considered.

 

[TheBigA]

As for V.O.A. and the Armed Forces network, if it's needed for National Security, then it can be defended. Still, cutting their budgets somewhat should be considered.

What security? Where in the Constitution does it say the US government can run radio & TV transmitters on foreign soil? If I was a foreign government, I'd protest. Some (like Cuba) have. Meanwhile, foreign companies are prohibited from owning American broadcasting. I support the repeal of that rule.

 

[bturner]

I disagree that my idea is bogus about earlier FM stations switching to more lucrative (financially) formats. Did they suddenly wake up and say, "Wow, I could be doing Top 40 or Album Rock instead of Classical or Beautiful Music". The fact was more people had access to FM radios in more places allowing the FM dial to begin taking on the wealthier AM stations. It was the opportunity to earn more money. Times change but making money has always been the objective for businesses and when the opportunity arises to make more money, the businesses tend to want to do that.

As for stopping funding to Armed Forces Radio and Voice of America, let me caution you that such thinking is letting your emotions prevail over your otherwise intelligent discourse. You have much to add to the discussion.

I must point out I know a few tax exempt organizations that operate commercial stations. This does not mean the commercial stations' income is exempt from taxes but the owner of the stations is a 501c3 in good standing in each instance.

Almost every advertising agency cares about ratings only. They're few and far between, but when you can make a case for your market that is sensible enough to justify the buy to the client, you can sometimes win some buys. Granted, these are the exception versus the rule and one has to consider time management as you really have to devote time and effort. In most recent years tighter ad budgets make this more difficult with fewer if any dollars spent in the ADI or on marginal buys. My success has been mostly in client directed buys.

I agree fringe formats will contnue to be on the outs in commercial radio and likely non-commercial. The true greener grass is on line streaming. I know one non-comm that was lucky to have the coverage of a translator, yet about 75% of their funding came from the on line side as did about 80% of their listening audience. As an internet only operator told me, he could run a format aimed at 1/2 of 1% of the audience on line while he would never be able to make it work in a top 10 market. He said a format after 1 in 200 listeners tended to have potential listeners that would seek him out. While he's not laughing all the way to the bank, he's grossing about 5k a month in donations and sales.

As for the 'fears' if Public Radio stations could run commercials, I too know AM owner and other broadcasters that would like those non-commercial frequencies but for them to have such a frequency, they'd need a willing seller. Are Public Radio broadcasters so 'flighty' they'd grab the money and run at the first opportunity to do so? It seems you are putting more emphasis on the worst case scenario. I understand that thinking and loved my Grandmother's explanation: I think the worst because I like to be pleasantly surprised.

Good additional points from other posters on VOA and AFRN. I can see AFRN to serve Americans overseas that are on our various bases. I can see the PR value in VOA. I've known people in numerous places in the world where VOA was their trusted news source. I used to know the manager of the only radio station in a small Pacific island country that rotated between ABC (Australian Broadcast Corp.) New Zealand Radio Service and Voice of America for their world news (pulled right off the shortwave). They aired American Top 40 as well.

 

[bturner]

I do agree some commercial operators could successfully operate traditional Public Radio formats. There seems to be a line of thinking that commercial radio employees can move into non-commercial radio with ease but that management and ownership just doesn't get Public Radio. I am not a subscriber to that thinking. There are broadcasters in ownership who hold fast to putting the community (aka listeners) first, sometimes taking the bumpy narrow road rather than the smooth wide road. It is these that are good candidates.

I can only project a case scenario when a well meaning commercial broadcaster assumes a Public Radio style format only to determine further down the road that another option might be more financially lucrative. Back in the day of the owner-operator, I think many would have given the Public Radio format a good chance to succeed but with some many stock held corporations feeling the pressure to produce would cause many Public Radio formats to be dropped like hot potatoes. I realize that is a worst case scenario, but I see that as a real threat.

 

[TheBigA]

As for stopping funding to Armed Forces Radio and Voice of America, let me caution you that such thinking is letting your emotions prevail over your otherwise intelligent discourse.

No emotion whatsoever. If the government should get out of the broadcasting business, the place to start is VOA and AFN. Why should my taxpayer dollars fund a radio service in Germany or Japan? At least with NPR, it can be heard in the US. There's no reason why the government can support broadcasting abroad and not domestically.

I'd also like to see the government get out of the weather business. If The Weather Channel can be a commercial operation, there's no need for federal support of weather stations.

I must point out I know a few tax exempt organizations that operate commercial stations.

You are exactly correct. The example I gave earlier of KING-FM in Seattle was a commercial station owned by a non-profit. A few months ago, it ceased airing commercials and is now 100% listener supported, for the same reason as my 3 other examples. WFMT Chicago is a commercial station owned by the non-profit PBS station WTTW.

 

[MattParker]

AFRTS is a propaganda agency. No more, no less. Like any house organ in a private company, it exists to sell employees/troops on the company/command line. The regs state the AFRTS station is "the voice of the commander." The same applies to base newspapers. It is not there to serve the troops; its purpose is to serve the brass. "Good Morning, Viet Nam" is not far off.

 

[johnbasalla]

If V.O.A. and Armed Forces Radio serves the vital national security interests of the United States, I support their continuance. I would like to hear them stream so that we could hear them if we wanted to. Overall, in order to start cutting government spending, you've got to start doing it and not come up with reasons to save this little "holy grail", and that little "holy grail"... etc... otherwise you end up not cutting big government spending. By the way, a decrease in the growth of an amount an agency gets from one year to the next is not a cut even though those that are trying to hold on to their pipeline to the feds money will say that it is.

 

[bturner]

I'm aware of the FCC Rule where you cannot interrupt programming for underwriting, but I am not aware the interruptions were to be at the top and bottom of the hour. I would think the FCC would designate 'a natural break in programming' as they indicate with the hourly legal ID.

Interesting point on the National Weather Service. The Weather Channel does a good job and on line services like Weather Underground do a good job. I suppose the question is the percentage of content that actually is provided by the National Weather Service. NWS Weather Radio is horrible with its computer generated voices and mispronounciations. I was talking to the folks who offer Digital Weatherman. I was told they bid on the NWS contract for computer generated voices and came in cheaper but didn't win the bid. They really have computer generated speech down pat. It is hard to tell it is a computer when side by side with the National Weather Service Weather Radio.

 

[MattParker]

I'm aware of the FCC Rule where you cannot interrupt programming for underwriting, but I am not aware the interruptions were to be at the top and bottom of the hour. I would think the FCC would designate 'a natural break in programming' as they indicate with the hourly legal ID.

Now I'm confused. The public radio station in my area interrupts programming for pledge drives routinely - pulling out of Morning Edition, All Things Considered and other programs at will, sometimes for whole segments and sometimes in mid-segment.

 

[aaronread]

I would like to hear them (AFRTS/VOA) stream so that we could hear them if we wanted to.

It may interest you that VOA, at least (I think AFRTS, too), is specifically forbidden from being broadcast in the USA. I'm not sure if that applies to streaming, too...but I would more-or-less assume it does.

The reason, of course, is that the people running those services don't want the general populace seeing/hearing what the "public face" of America is to the rest of the world. From what I've heard from my friends overseas, it's not a very pretty face. Pretty raw propaganda, supposedly. And unsurprisingly, really. VOA and AFRTS answer to no-one other than parts of the government that are traditionally quite conservative and authoritarian. With that lack of "accountability" (which isn't really the right word, but it's the best I can think of at the moment) I imagine things would drift into propaganda pretty quickly.

On a similar note, I've heard that the BBC World Service, while an excellent source of international news, is nearly as bad a propaganda machine when it comes to reporting on the U.K. itself. Having never set foot in the U.K., much less being aware enough of their internal politics...I can't really comment on it. But it's something I've heard from several Brits and Irishmen when I lived in Boston. Take it for what it's worth.

I'm aware of the FCC Rule where you cannot interrupt programming for underwriting, but I am not aware the interruptions were to be at the top and bottom of the hour. I would think the FCC would designate 'a natural break in programming' as they indicate with the hourly legal ID.

Sorry, there is no such rule.

There IS the definition that "fundraising" is a break in regular programming to solicit funds on the airwaves. That comes into play when you define "what is a break in regular programming?", and that your average 30 or 60 second "spot break" on a non-commercial station aren't a "break in regular programming" (because those "spot breaks" ARE your regular programming). Usually this issue arises mostly when a station is accused of fundraising for an entity other than itself, which is prohibited by non-commercial stations.

But this concept is moot for underwriting, since by FCC decree, there's no way you can have an underwriting spot be longer than 30 seconds and still be non-commercial. So underwriting is, by default, never a "break in regular programming".

 

[PTBoardOp94]

There is no rule that sponsor credits must be only at the top and bottom of an hour. It happens that NPR programs break for TOH and BOH news, and inserts a sponsor credit at that time, but member stations are allowed to insert funding credits at any point in the hour. Even if there were such a rule, it would not affect the pledge breaks.

I conceptually agree with TBA about AFN and VOA. The VOA might have made sense in a cold war environment, and the AFN might have made sense in 1970 (before satellite entertainment was available nearly around the globe), but I don't think either one of them serves any vital national interest in 2011. What vital national interest does NPR serve? The only thing they can claim is that they do journalism better than NBC or the Wall Street Journal. As we see in this thread, that's debatable in itself.