Public Broadcasting Study Points to Need for Federal Funding

VladKol /

June 20, 2012; Source: Corporation for Public Broadcasting

How would you finance public broadcasting in the U.S. given an increasingly tanking federal budget hamstrung by rock-ribbed conservative members of Congress who like neither federal subsidies for the arts and humanities nor specific assistance to public television stations? The Corporation for Public Broadcasting just released a report describing where the alternative funding sources are for public television and radio, a report that was required of CPB with its 2012 appropriations. The Corporation hired the management consulting firm Booz & Company to explore current and alternative sources for revenue enhancement and centered in on five new options and fourteen existing sources as most realistic to pursue. The study is important, particularly since 60 percent of public radio and television stations reviewed by Booz had operating deficits in their unrestricted funds in 2009 or 2010.

The five “new” revenue sources were television advertising, radio advertising, retransmission consent fees, paid digital subscriptions and digital game publishing. The fourteen existing sources were identified as merchandise licensing, digital online advertising, education and state government fee-for-service arrangements, events, renting donor lists to direct marketers, tower leasing, production services, on-demand distribution, content licensing, DVD/CD sales, retail product sales, magazine publishing, book publishing and mobile device applications. While public broadcasters could perhaps approach these revenue sources independently, CPB and Booz also considered two more sources that would require major policy actions on the part of government—“revenue that might be generated through the sale of spectrum, as well as the potential impact of a change in the law that currently bars public broadcasters from airing paid political advertisements.”

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While there is a lot of detail in this report—which, by the way, seems to have received relatively little mainstream press coverage—let’s take note of some of the important general findings:

“1) Ending federal funding for public broadcasting would severely diminish, if not destroy, public broadcasting service in the United States…

2) Fifty-four public television stations in 19 states are at high risk of no longer being able to sustain operations if federal funding were eliminated. Of the 54 stations, 31 serve predominantly rural areas…

3) Seventy-six public radio stations in 38 states are at high risk of no longer being able to sustain operations if federal funding were eliminated. Of the 76 stations, 47 serve rural communities…

5) There is no combination of alternative sources of funding that together could replace or significantly reduce the federal appropriation.

6) A shift from a noncommercial model to a commercial advertising model would have dramatically negative consequences for many of the communities that public broadcasters serve…

Two things strike us about the CPB alternative revenue sources report. First, if the Booz & Company analysis is correct, the situation of public broadcasting is more dire or constrained than one might guess, given huge limitations to all of the earned income alternatives that people are so quick to suggest. Also, the range of options explored for public broadcasting have distinct implications for the nonprofit sector overall in that many of the alternative, market-oriented revenue sources that nonprofits are encouraged to explore to replace government and foundation funding are just as ephemeral for others as they are for public broadcasting.—Rick Cohen