Some Thoughts On Station Breaks and Underwriting Credits

by Nat Katzman

infop@cket 9, March 1995

Every hour of public television air time contains about five minutes that are not an actual program. The 56 minutes and 48 seconds which are the standard length of a public television program leave about three minutes per hour for station breaks. The content of these breaks is entirely under the control of individual local stations. Two additional minutes of non-program material - underwriter credits, video cassette offers, production credits - can appear each hour within programs. This content is regulated by national guidelines which producers must follow. The combined five minutes have broadened opportunities for generating financial support for the industry. However, policies and standards for the content of the local three minutes differ greatly among local stations; and the policies and standards of some of these stations differ greatly from national guidelines, enforced by PBS, for the internal two minutes. The nature of the material contained in these five minutes has provided fodder for critics, and created paradoxes and conflicts for the national system, local public television stations, and producers.

What They Are Saying

As a former station manager of a major public television station and a current producer of public television programs looking for underwriting, I"ve had a chance to experience more than my share of the conversations about what appears on the air other than programs. These tend to fall into several categories and subcategories. Here is a condensed outline of what people seem to be saying, at least in my unscientific sampling:

  1. Within public television
    1. Aggressive local stations - "In these tough financial times, we have to make the most profitable use of our most valuable asset, our air time."
    2. Conservative local stations - "The more we clutter our air with things that look like commercials, the more we alienate the general public and risk losing government funding."
    3. Split-personality local stations - "I"d like us to be more aggressive, but my boss (General Manager, Board of Directors, State Legislature) is afraid of the consequences."
    4. The quasi-official national position - "We have to be as conservative as the most conservative local stations; and we wish those aggressive local stations would stay within national guidelines."
  2. The general public
    1. Sympathetic viewers of aggressive stations - "I guess they have to run those commercials to keep going. It"s a small price to pay for the programs."
    2. Unsympathetic viewers of aggressive stations - "Those commercials are no different from the rest of television. No way I"m sending them any money when they do those pledge pitches."
    3. Sympathetic viewers of conservative stations - "Why can"t they run commercials or something if they need money so much?"
  3. Corporate underwriting prospects for national productions
    1. Supporters of the public television mission - [Certainly an endangered species, possibly extinct. There used to be companies that provided underwriting for national public television programs as part of their charitable activity. This may still exist, perhaps at the local level, but I haven"t met any recently in my attempts to find production underwriting, so I can"t quote them.]
    2. Companies that may find value - "Look, we"re only interested in the bottom line; but what you can do may be able to help us. Here"s a list of the kind of things we would like. Tell us more about what you can do." (Very little on their list is acceptable under PBS guidelines. Some modifications occasionally make a deal possible.)
    3. The vast majority (impolite) - "Those pathetic little tags are worthless to us. We"re in the business of selling our product. We"ll be happy to talk to you if you ever have a place for our commercials or can make our spokesperson the host of your show."
    4. D. The vast majority (Polite) - "I"ll be happy to look over your presentation." [Materials are sent, after which phone calls are not returned. Most typical of account representatives at large advertising agencies.]

Where the "Credits" Came From

The genesis of underwriting credits on public television programs is often forgotten. They are technically disclosures, not credits. In the words of the PBS National Program Funding Standards and Practices handbook, "the Federal Communications Commission (FCC) requires public broadcasters to Œfully and fairly disclose the true identity" of all program funders... At the same time the FCC has indicated that Œthe public broadcaster"s good faith judgment must be the key element in determining that the service should remain free of commercial and commercial-like matter."" (Source: PBS, March 9, 1990.) Somewhere along the line but well before "educational" television had become "public" television, public broadcasters determined that the disclosure requirement created an opportunity to sell underwriting to companies in return for mention of those companies and their products.

Similarly, the genesis of program-related-product offers is the FCC"s belief that the public interest is served if the educational content of programs is enhanced with other materials. Again, in the words of PBS, "Under the FCC"s Second Report and Order (Docket 21136), public broadcasters are permitted to air announcements that promote materials (in which they may have a financial interest) as long as consideration is not received in exchange for making the announcement and the announcement is deemed by the licensee to be in the public interest and of service to its viewers - e.g., is directly related to the program and enhances its effectiveness or educational value." (Source: PBS, December 18, 1987.) Thus, another opportunity to generate revenue was found.

The Paradoxes: Product Offers

It has always seemed to me that there is no difference between offering a transcript or a videocassette of a program and offering a program-related book. It also seems to me that there is no difference between offering something right after a program ends and offering it sixty-eight to ninety-eight seconds later - after the credits and the PBS logo have aired. This gives viewers plenty of time to zap away to another station. Yet PBS, which requires twenty percent of income as revenue-sharing plus a significant additional percentage if they have financed part of the production, insists that book offers must follow the PBS logo while videocassette offers can come before credits. Further, even though you are explicitly trying to get people to call a toll-free number to order the product; even though the profits go to public television; and even though - in contrast to underwriting credits - the FCC does not prohibit qualitative statements or calls to action; the policy adopted by the PBS Board does not allow you to say anything good about the product you are offering. (Imagine pledge pitches in which no adjectives were allowed: "You have just seen a performance with three tenors. Wasn"t it a program.")

In the current age of zappers, infomercials, and direct marketing saturation, the product-offer marketplace seems to have softened a little. Gone are the days of the mid-eighties when we at KQED were able to fully finance a cooking series with revenues from book sales. Yet even in this reduced marketplace, the best data (sorry, they are proprietary) tend to indicate that sales are reduced by fifty percent or more when the offer comes after the PBS logo. If public television didn"t need the revenue it wouldn"t matter. If the offers were completely prohibited there would be no issue. But the offers exist, virtually identical offers for cassettes can come earlier, and profits must go to both the national system and the producing station. So why must the rules be more strict than FCC prohibitions and limit the revenue potential of product offers?

The Paradoxes: Local and National Credits

Some people in public broadcasting believe that increasing underwriting revenues by "enhancing" credits has a negative impact on revenues from membership and government support, and some viewers and legislators tell us it"s true. Others in public broadcasting either do not believe there is a relationship or do not care, and some members of the public back any efforts that will support the programming they want. Some legislators even support improvements in public broadcasting"s revenue potential precisely because they want to reduce government funding. Everybody is a little right and a little wrong. There is no single answer: enhanced underwriting can bring additional money to public television, but this very revenue source can also be a threat to other income.

As you go from town to town across America, you can see very different forms of underwriting credits in those three local minutes. In Boston public broadcasters are conservative because they feel their local standards must match the national standards applied to all the programs WGBH produces. In Washington, they are relatively conservative, perhaps because WETA is directly under congressional scrutiny, and its air is taken as the definition of what PBS is doing. I am told that most state networks also adhere to conservative local underwriting practices. On the other hand, in New York, Chicago, San Francisco and other markets public broadcasters are taking an aggressive approach, with local underwriting content well beyond what would be accepted by PBS guidelines. Examples include: (1) 30 second spots for single underwriters - the national limit is 15 seconds; (2) images of products in use and qualitative statements about goods or services - both of which are prohibited at the national level; (3) calls to action, such as providing a toll-free number for further information - which would not be allowed under PBS guidelines.

While these aggressive standards may annoy or amuse the management of more conservative stations, they have created very real frustrations for those of us who are trying to obtain corporate underwriting for national production. In addition to all the unanswered phone calls, the polite (if blunt) rejections, and the inability to meet the requirements of the potential underwriters who show some interest, we also repeatedly encounter, "You told me I couldn"t do that, but I just saw it on my local station." Sometimes we even hear, "You told me I couldn"t do it, but my local station just offered me the chance to do that very thing." At that point a producer has to start responding with some pretty persuasive words (and non-verbal cues) to prove that he is not a liar or a fool and to explain that while public television is complex, even chaotic, it still makes sense to put up a few hundred thousand dollars to have your company"s name on the program. Interestingly, there are now efforts to sell underwriting packages that combine national credits, limited by PBS guidelines, with enhanced local credits on stations that will accept them. This is certainly a pragmatic approach; but it underscores the paradox of a nationwide cluster of broadcasters, supposedly in the same business, who cannot accept a common set of standards.

A Concluding Case Study (Of Sorts)

We were at the office of a major company, trying to interest them in underwriting a gardening series. I had earlier spoken by phone with the president of the company, and she had found enough in our proposal to invite us over for a meeting with her and the CEO of the parent corporation. The pitch was relatively simple: "Your company is growing from a regional to a national entity and it needs people all around the country to be aware it exists. Exposure - even constrained by the rules - on public television will be a great (and inexpensive) way to get the right people to know your name." That, and a lot of paperwork about our background and the new series, got us a meeting.

The CEO was a very nice man, but he had all the right, tough questions: "Can we call it The XYZ Corporation Gardening Show? Can we show people using our products while they are gardening? Can we buy ads with the host saying he loves to shop in our stores? What time will the show be on?" Condensed versions of my answers: "No, but... No, but... No, but... Well, you see we can"t really say when the program will air, but..." At least I was able to offer them the chance to split the underwriting payments over two fiscal years. The president still seemed sympathetic, but the last nail in the coffin came when the CEO reviewed the tape of our energetic, articulate, and perky host and decided that he didn"t have a "quirky" nature that spells success for other hosts of how-to series. So after an hour and a half we changed the subject and began to talk about a joint project to develop CD-ROM products. It won"t involve public television in any way; but it"s an exciting prospect for producing high-quality informational materials.

Final Thoughts

My company produces a reasonable amount of programming for public television. We are among the fortunate producers who even get some of our financing from PBS. However, we feel pressured toward the conclusion that our most exciting prospects may lie elsewhere - a CD-ROM deal can happily compensate for the failure to make an underwriting deal. Even so, I remain cautiously optimistic about our ability to finance and produce quality programs for public television, even in a worsening environment.

Finding the resources for production has always been difficult; but it seems to be getting worse. As I write this, the consensus is that federal funding will be slashed; nobody expects any growth in state or local funding. Meanwhile, membership and individual support has stopped growing, and foundations are playing a diminishing role in financing national production. The "last best hope" for generating significant resources seems to be the use of those five minutes of non-program air time to generate local revenue and production funding.

Yet there are obstacles that need not be there. It has got to the point where the main issue is consistency of policies not merely what the policies are. The rest of the world doesn"t care that one underwriting spot is subject to national guidelines and another one is subject to very different local guidelines; and it doesn"t care that a video cassette can be offered before the PBS logo while a book must be offered after the PBS logo.

In the time since the draft of this article was written, relevant events have taken place. The PBS Board of Directors announced a new policy of dues surcharges (fines) imposed on stations with local underwriting practices that violate national standards. The reaction was typical of public broadcasting - criticism from stations that disagree, support from stations that agree. Industry gossip generally is skeptical. Few people expect any stations to change what they are doing or ever actually pay the fines. With full awareness of the new PBS policy, at least one aggressive major station has brought its Board a proposal to start selling thirty-second underwriting spots. On the other hand, a major producer has told me of an internal study indicating that they could not support their national production by replacing underwriting with commercials.

I have seen too much of public broadcasting politics to believe that consistent local and national policies are likely in the near term. Yet if there is one thing that everyone in the industry agrees upon it is the need for more resources. Maybe someday enough people will realize that too much local autonomy can be counter-productive - some policies are too conservative, some are too aggressive, and national standards cannot please everyone. If it happens, a new era will be in order.

Nat Katzman directs Research and Programming Services in San Francisco.

CPB funded this report. Opinions expressed are the author"s and do not necessarily reflect the opinions and policies of the Corporation.

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