Let’s start with an insightful quote from David Brooks writing in the NY Times this past weekend:

For better or worse, over the past 50 years we have concentrated authority in centralized agencies and reduced the role of decentralized citizen action. We’ve done this in many spheres of life. Maybe that’s wise, maybe it’s not. But we shouldn’t imagine that these centralized institutions are going to work perfectly or even well most of the time.

In this case, Brooks was talking about centralized agency performance in the face of terrorism threats, but his talk about the powers — or lack of powers — in centralized government agencies got me to thinking about public service media. It seems to me that if we’re serious about public service media, we’re going to have to act locally and work to deemphasize national content distribution, services and cash flows. We’ve gone too far into centralized, and we’ve lost our way in our hometowns.

It strikes me that, more than anything else, those who will successfully practice public service media in this new decade will rely upon themselves and their communities, rather than waiting for solutions or directions to arrive from national agencies or media producers. Local solutions can’t come from somewhere else (though ideas can). The age of centralization and top-down service is over for now. Such approaches don’t scale down to real problems and palpable action well, and they smack of paternalistic “do this and do it this way” directives. We’ve put too much faith and power into centralized systems, enfeebling our abilities to act in our own communities.

Serving community needs almost always must be done on a localized basis. Yet over the past 20 years the public broadcasting universe has concentrated more and more power, intelligence, money and experience in the core networks and stations: PBS, NPR, APM, PRI, WGBH, KQED, WETA, WNYC and so on. Donors to local pubcasting stations are really helping pay Paula Kerger (PBS) more than $500,000 a year and Steve Inskeep and Renee Montagne (NPR) more than $600,000 a year combined, not to mention so many others. Yet the services they individually provide, while nice, are not vital to solving community problems where we live (they don’t even solve problems in the Washington, DC metro area, for that matter).

Consider what could be done with the money spent on the centralized networks in a local area. In one market with which I have passing familiarity, with about 2.8 million people in the MSA, the local PBS station sends more than $1.2 million annually to PBS alone. That’s money leaving the community, going to PBS (and ultimately to program producers) and what that community gets back is national PBS content. I’m not sure that’s a good return on the community’s investment, not to mention the duplication of effort that happens across 300 cities nationwide — stations do pretty much the same thing everywhere: create a PBS station that looks like all the others, save for the logo.

Meanwhile, that’s $1.2 million that isn’t being spent to provide services that are locally relevant and useful to the community. What if that money paid for 12 people to write, shoot video, take pictures, interview people and gather and post information and host interactive communities that solve real problems? And what if those 12 people helped organize a community of 48 people that were actively and collaboratively involved in solving problems, multiplying the positive effect? That would be a major, real-world impact — well worth $1.2 million in local funding from a community of 2.8 million ($2.30 per citizen per year).

Now, I know what you’re thinking: “What do we do about Antiques Roadshow?” Well, that show can go to A&E. Oh, except they already have that show, called Pawn Stars. Zing! But seriously, I can address the restructuring of public TV funding and programming in a future post. For now, my point is that local public service media companies must focus on local needs and solutions. Leave the nationals to do their work (in new ways, in new funding models).

When the 1967 Public Broadcasting Act came along, there was a deep-rooted need for local media creation that served local needs in a noncommercial way. Over the years, the professionalism of the system has destroyed local capacity, concentrating capacity at the national level, where both PBS and NPR are competing with national media outlets and behaving in ways disconnected from local needs. In many ways, the dreams of the 1967 PBA writers were attained, but have been steadily lost.

It’s time to swing the pendulum back the other way.

My shocking and insane recommendation:

• PBS should “implode” and reorganize itself on a variation of the C-SPAN model — not the programming, but the distribution system. (C-SPAN sells its service directly to distribution providers like cable and satellite companies. Why can’t PBS do this? Answer: They could.)
• This new approach would create between 3-10 “channels” of content that are sold directly to cable, satellite and IPTV providers nationwide; each channel would be themed around a coherent content set (a la Discovery’s various channels).
• PBS then additionally monetizes all those channels (on top of the distribution revenue) with a more organized “advertising lite” model that they’re already pursuing, but pursuing in a badly-organized way. New approach:
  • put the ads into multiple breaks during the hour, not in huge viewer-irritating blocks at the top of the hour
  • but… run ads less than any commercial station
  • and stick to the standards already in place for allowed/disallowed message types
  • sell the ads nationally; ad runs are guaranteed because there are no local stations to mess with the carriage levels or patterns
  • whether or not you let producers sell embedded ads could be figured out
• PBS should then “explode” itself by turning over all its content to the existing local public TV stations — for free (or for a nominal administrative fee); the shows would carry the aforementioned embedded ads, even when played out on localized schedules.
• PBS should further explode itself (after an adjustment period) by providing the content to other nonprofits under the same fee structure as the legacy member stations; schools, new public media players, and so on could get access to the content and use it for public good in their areas.

Why?

• Local stations in small- to mid-size markets today are unable to effectively produce community-engaging relevant content because so much of their budgets go to buy programming from PBS and others (who in turn buy programming from producers); by releasing these smaller stations from the financial burden, they can then spend that money to engage with their public online, in person and over the air in ways that are economically unfeasible today — but are critical to any media company’s survival going forward.
• The big producing stations will be either largely unaffected or helped — they can still sell programming to PBS for distribution, and with the increased distribution capacity (more channels), and more stable income stream, they just might be able to sell more.
• PBS could finally break up its programming into channels; the programming model today (“everybody into the pool!” ) doesn’t work for cable users trained to expect thematic channels; we would move further into the PBS Kids and Sprout models and compete with the Discoveries of the world on their own turf.
• The PBS member station model is wildly overbuilt — we do the same things all over the country again and again and again, each in our own town. It’s a waste of taxpayer and donor dollars. This gives the public a unified service that’s more efficient and will be capable of producing more content, both locally and nationally.
• If local stations really do provide a value-add service that’s unique to their community, they can still do so under this model. Indeed, once freed from the heavy PBS licensing fees, they’ll be in the best position in 10 years or more to uniquely serve their local communities.
• The only local stations left after all this would be those that are truly engaged in their communities and produce products/services that meet real needs. And that’s the way it should be.

Scary stuff, no? But some variation of this plan may be the only solution for the future. One participant at dinner suggested PBS would never do anything to disintermediate member stations. That’s sweet, but it may not be PBS’s choice in the end. Economics may force a decision something like the above. Indeed, it might even be the best solution ahead of a crisis (but please, share your thoughts below!).

Why might PBS be forced into this model anyway? Keep in mind the PBS universe is held together by several thin threads. Tugging at any one of them could lead to a system-wide financial implosion. For example…

Consider the DTV transition next year and the weakening economy right now. Combine those factors with stations that are already weak (Peoria, anyone?) and you could see a die-off of perhaps 10% or 20% of the stations by 2011 (2 years after the DTV changeover). If that happens, then either there’s a PBS pull-back in content that further erodes the service profile (leading to an erosion of financial support), or rates go up substantially for the remaining station cohort, thus continuing the carnage for those that survived the first culling.

But never mind the disaster scenario — think of the possibilities and opportunities! If we could model and implement this correctly…

• local stations see fees drop to zero or near zero
• local stations go back to doing local production and engagement
• local stations can now focus on producing a service that’s unique to their geography — something that PBS cannot do as a national entity
• PBS gets control of its service at the national level for the first time
• PBS gets financial stability because it controls its own income and expense streams directly
• cable/satellite providers get a unified service that’s easier to manage (from a single source) and makes more sense for their customers (due to the channelization)
• kids get great PBS programming for them in solid 24×7 services
• adults get great PBS programming 24×7, too — no more waiting for the kids shows to go off-air
• more programming enters the network from new local production (with national appeal), community-generated and user-generated content and so on
• the station vs. network fights and suspicions end (!) — each player now has a clear mandate and responsibility in the public media universe
• local distribution channels expand to new players — even those without FCC licenses
• CPB money, when provided, truly goes to provide local service — something every Congressman can get behind because their constituents are now better served

Okay, that’s the idea. You can see why it gets people’s ire up. Comments are open!

By the way, I realize if PBS sells direct to cable/satellite services that breaks the free over-the-air broadcast model to some degree. But… 1) I don’t think Congress is going to care that much — most of their (voting and rich) constituents will not fight the change, especially since the 2009 DTV transition will move more people to cable than ever before, and 2) if the PBS cost to local stations drops to zero, those stations are less likely to go out of business anyway.

I didn’t comment on the validity of the Times articles ideas themselves — we can debate that separately (and perhaps I will). But I did try to provide a reality check on those folks saying we should de-fund PBS because it would be fine on its own.

It continues to surprise me how few people understand how public broadcasting is funded. To be fair, the funding systems are a nasty mess of spaghetti, so I can understand the confusion. But it’s not really that hard once you’ve been through it once or twice.

Perhaps I need to write a post that diagrams and explains how this works. A diagram, however messy, might help. But for now, here are the salient points on how funding works in the U.S. public broadcasting world:

• The Corporation for Public Broadcasting (CPB) is an independent corporation setup by Congress to take in funding for public broadcasting services. They exist to foster pubcasting nationwide, in the “public interest.”
• The CPB is “forward funded” by 2 years from the present, mostly to help insulate the CPB from intra-year funding threats over political issues.
• The CPB has a politically-appointed (by the President) Board that oversees the company, but does not participate in day-to-day operations.
• The CPB gives out money to public radio and TV stations on an annual basis, generally in the fall and the spring, to serve their local constituencies. These are called Community Service Grants (CSGs).
• Local stations accept the CSGs, and then combine them with money raised from sponsorship (advertising lite) and membership (pledges, transactional sales) and anything else they can do to raise money. The size of their CSGs from the CPB are partially determined by their ability to raise money locally — the more you raise, the more CSG you’ll usually get.
• The local stations then build and buy programming to put on the air. To build programming they have paid staff and volunteers in varying ratios. When buying programming, they turn to national networks or independent producers. NPR and PBS are the two obvious examples, but there are actually many more.
• Separately, Congress funds other programs to support the technical infrastructure needed by local pubcasting stations (transmission gear). These might be earmarks in some cases, but mostly they are additional funds given either to the CPB or to other entities for distribution to local stations. These are one-time deals, but they are frequently repeated, depending upon needs. DTV conversion is an example of separate funding that helped most of the public TV stations make the leap.
• PBS and NPR may get small grants from the CPB for small projects or for general services, but in the grand scheme of things, the funding streams from the CPB are minor. They could live without these direct funds.
• Using the programming as an attractor, local stations then gather donations and sell sponsorships around the programming they broadcast.
• PBS, NPR and other programming providers mostly make money from the “dues” paid by member stations. Dues are mostly calculated based on the size of the target market served by the station.
• PBS turns around and spends their income on two main things: 1) their own technical infrastructure and the costs of distributing programming to member stations, and 2) buying the programming they run, from NOVA to Sesame Street to the News Hour and so on. Yes — PBS buys that programming, they don’t produce it. It’s typically produced by the largest stations in the network (e.g. WGBH, WNET, KQED, etc.), but also independent producers.
• And round and round we go.

Quite a mess, huh?

This is why the notion of defunding the CPB would have a lot of unpredictable impacts, allocated unevenly across the system (such as it is). The smallest stations would go out of business almost overnight. The largest non-producing stations would likely be fine after a few cuts here and there. Stations in between would suffer a mixed bag of impacts. The impacts to PBS and NPR are unclear because their customer base would shrink by some significant — but unknown — factor.

Here’s the main idea, though… Public broadcasting in this country is funded in complex ways, and it’s really a combination of:

• federal and sometimes state funding
• local sponsorship (advertising lite) sales to corporations
• local private donations (memberships)

This is why it’s often called a “public-private partnership.” It’s the proverbial three-legged stool at many stations. And we all know what happens when you remove one of the legs of that stool.

As to whether PBS is still “necessary” — that’s another discussion.