UNITED STATES PUBLIC TELEVISION STATION FINANCIAL ISSUES SINCE 1980 by EUNSOON CHO, B.A. A THESIS IN MASS COMMUNICATIONS Submitted to the Graduate Faculty of Texas Tech University in Partial Fulfillment of the Requirements for the Degree of

MASTER OF ARTS

Approved

Accepted

May, 1986 (l€>. II

9 ACKNOWLEDGEMENTS

I wish to express my appreciation to Dr. Dennis A. Harp, my committee chairman, for his encouragement and guidance during the course of this thesis and to other members of my committee. Dr. Alexis S. Tan and Dr. Steve H. Swindel for their valuable advice and comments. I would also like to express my gratitude to my parents for their assistance through my thesis. In addition, I want to thank all the respondents who participated in this survey and Joyce who took time out to care.

11 TABLE OF CONTENTS

ACKNOWLEDGEMENTS ii LIST OF TABLES V CHAPTER I. INTRODUCTION 1 Statement of the Problem 1 Objectives of the Study 9 II. LITERATURE REVIEW 12 Four Categories of Station Licensee 12 Federal Government Funding 14 State Governments Funding 18 Funding from Individual Contributors and/or Subscribers 19 Funding from Business 21 Funding from Other Sources 24 Research Questions 28 III. METHODOLOGY 29 Variables 29 Samples 33 Limitations of this Study 33 Procedures 34 Analyses 36

111 IV. RESULTS AND DISCUSSION 39 Descriptive Analysis 39 Zero-order Correlation 40 Spearman Rank-order Correlation . 48 Least-squares Mean Analysis 48 of Variance 62 V. SUMMARY AND CONCLUSIONS 62 Conclusions from Findings .... 66 Recommendation for Further Study 67 REFERENCES 71 APPENDICES 72 APPENDIX 1. Names of Network Stations 75 APPENDIX 2. Location (State) of Sample 76 APPENDIX 3. Population of Station Area 77 APPENDIX 4. Questionnaire

IV LIST OF TABLES

1. Type of Licensee of Sample 37 2. Zero-order Correlation Coefficients Between Type of Licensee and Funding Sources (Comparing budget sources before 1979 and after 1980) 41 3. Zero-order Correlation Coefficients Between Type of Licensee and Funding Sources (Income in FY 1985) 43 4. Correlation Coefficients Between Type of Licensee and Funding Sources (Long-range solutions) 45 5. Mean of Long-range Solutions of Income Sources 47 6. Spearman Correlation Coefficients Between Dependent Variables Before 1979 and After 1980 49 7. Comparison of the Sources of Funding Before 1979 and After 1980 by Type of Licensee 50 8. Comparison of the Type of Licensee with Sources of Income in FY 1985 53 9. Comparison of the Type of Licensee with Long-range Funding Sources by Type of Licensee 56 10. Percentages of Station Licensee Type Employing Special Income Sources 59

V CHAPTER I INTRODUCTION

Statement of the Problem In 196 4, the Federal Office of Education urged the creation of a national commission to study ways and means by which educational television could become a permanent instrumentality in the United States. The FOE identified certain specific needs: partial federal support for community service programs, more support and additional production centers for national programming, funding for program libraries, and the necessity for regional and national interconnection. The Carnegie Commission on Educational Television report, published in 1967, was a landmark in the develop­ ment of a national public television system. Since the Commission's origin, there has been basic agreement as to some of the goals it should seek to accomplish. This has been most eloquently stated by E. B. White in an often- quoted letter written to the commission:

Noncommercial television should address itself to the ideal of excellence, not the idea of acceptabil- ity--which is what keeps commercial television from climbing the staircase. I think television should be the visual counterpart of the literary essay. should arouse our dreams, satisfy our hunger for beauty, take us on our journeys, enable us to participate in events, present great drama and music, explore the sea and the sky and woods and the hills. It should be our Lyceum, our chautaugua, our Minsky's, and our Camelot. It should restate and clarify the social dilemma and the political pickle. Once in a while it does, and you get a quick glimpse of its potential. (Carnegie Commission, 1967, p. 13).

In recommending the establishment of a public tele­ vision system, the commission stated that the system of noncommercial television should include 1) more than 120 stations which are owned and operated by educational institutions or other nonprofit educational organizations and which carry no advertising; and 2) National Educa­ tional Television (NET), a nonprofit organization which provided most of the more ambitious programming and with which most of the stations were affiliated (Carnegie Com­ mission, 1967). Also, the commission separated educational televi­ sion programming into two parts: 1) instructional television, directed at students in the classroom or otherwise in the general context of formal education, and 2) public television, which is directed at the general community. All television, including commercial television, provides news, entertainment, and instruction. All television also teaches about places, people, animals. politics, crime, science. However, there are clear differences: 1) commercial television seeks to capture the large audiences; 2) instructional television calls on the instinct to work, build, learn, and improve, and asks the viewer to take on responsibilities in return for a later reward; and 3) public television includes all that is of human interest and importance which is not at the moment appropriate or available for support by advertis­ ing, and which is not arranged for formal instruction (Carnegie Commission, 1967). The commission stated the criteria that programs on public television should meet:

The programs we conceive to be the essence of Public Television are in general not economic for commer­ cial sponsorship, are not designed for the class­ room, and are directed at audiences ranging from the tens of thousands to the occasional tens of mil­ lions. (Carnegie Commission, 1967, p. 3)

The report of the commission concluded that a well financed, well directed educational television system, substantially larger and far more persuasive and effec­ tive than that which existed in the United States at that time, must be brought into being if the full needs of the American public are to be served (Carnegie Commission, 1967). The commission's recommendations became a major impetus for the passage of the Public Broadcasting Act of 1967, which allocated $38 million dollars to the improvement and construction of facilities for noncommer­ cial radio and television in the United States. To over­ see allocation of the funds, the Corporation for Public Broadcasting (CPB) was created by the act. The Corporation for Public Broadcasting is a quasi- governmental company which manages the funds appropriated for public broadcasting by Congress. The major role of the Corporation is to underwrite the costs of program production--with an emphasis on innovative and quality programs--for public broadcasting in the United States (Corporation for Public Broadcasting Annual Report, 1979). In addition, the CPB has responsibility for the following:

1) to facilitate the full development of educa­ tional broadcasting in which programs of high quality, obtained from diverse sources, will be made available to noncommercial educational television or radio broadcast stations, with distinct adherence to objectivity and balance in all programs or series of programs of a controversial nature; 2) to assist in the establishment and development of one or more systems of interconnection to be used for the distribution of educational television or radio pro­ grams so that all noncommercial educational or radio broadcast stations that wish to may broadcast the programs at times chosen by the stations; 3) to assist in the establishment and development of one or more systems of noncommercial educational television or radio broadcast stations throughout the United States; 4) to carry out its purposes and functions and engage in its activities in ways that will most effectively assure the maximum freedom of the noncommercial educational television or radio broadcast systems and local stations from interfer­ ence with or control of program content or other activities. (Bittner, 1985, p. 259)

All noncommercial television stations which became known as "public television," imply their ability to secure income from the public as well as from companies, foundations, and government agencies. The Public Telecommunications Financing Act (PTFA) of 1978 was signed into law by President Carter. This act was a series of amendments to the Public Broadcasting Act of 1967. The Public Telecommunications Financing Act required the Corporation to conduct their future activi­ ties for the development of public telecommunications. The PTFA act was enacted in the context of a number of proposals designed to alter the structure of public broadcasting and its mechanisms for financial support at the national level. The act emphasized the funding of program production by independent producers. Also, the new legislation needed CPB's research and planning activities. The Station Financial Model was one of the research projects which was supported by the planning funds. This computer model uses information from the CPB annual surveys to describe how revenue changes influence the operations and services of public television stations (Corporation for Public Broadcasting Annual Report, 1981). In 1980, the CPB Program Fund was created to deal with the selection and funding of television programs by a process which is protected from outside influences. The fund was independent in matters of individual program decisions, but relied on the CPB Board for guidance in areas of programming policies and priorities. Those priorities are: 1) programs for children and the family, 2) programs about the concerns of minorities and women, and opportunities for minorities and women to produce programs either for targeted groups or for a broader audience, 3) drama, 4) personal health, physical or spiritual, and 5) public affairs programming--the development of public broadcasting as a source of a regu­ lar and total account of the course of events presented in depth (Corporation for Public Broadcasting Annual Report, 1981). In 1970, the Public Broadcasting Service (PBS) was formed by the CPB which joined with many of the licensees of noncommercial television stations in the United States. Many programs aired on public broadcasting stations are distributed by PBS. Although PBS is the same as commercial television networks in terms of providing programs, there are some differences such as its strict affiliation and operation through its contributions and tax dollars (Bittner, 1985). In 198 0, the National Association of Public Televi­ sion Stations (NAPTS) was formed by public television licensees as a suborgani zation of PBS. The NAPTS has three nonprogrammi ng areas. First is the research area which includes maintaining up-to-date information on the public television system, making projections on the growth and income of the system, monitoring demographic trends which affect public television services, monitor­ ing and analyzing key data, and providing advice on research projects. Second, the planning area involves assisting individual stations in their own planning efforts, performing long-range planning for public tele­ vision services, and advising national organizations and government agencies in their planning of telecommunica­ tion services. Third, the representation area contains maintaining contact with Congress and government agencies on behalf of licensees, assisting licensees in their own diverse representation, and preparing general information for and about public television stations (Corporation for Public Broadcasting Annual Report, 1981). The Public Broadcasting System is a product of the federal government. The Corporation for Public Broadcast­ ing, as trustee of congressionally appropriated funds on 8 behalf of the American people, has as its primary mission the development and support of this unique communications system. Carrying out this mission includes providing high-quality cultural, informational and educational pro­ gramming for all Americans. However, there are many issues to be solved for the future of public broadcast­ ing. The most important concern is funding (McKay, 1976, Esplin, 1975). Since the early 1980s, when the federal contribution to the industry's total support decreased, public televi­ sion has had to rely on more voluntary contributions from individuals and businesses. In fact, the cutbacks of federal support began in the Nixon administration. President Nixon threatened to withhold federal funds, and he pushed through some structural changes designed to decentralize control of the medium. A major question about funding of public television is that in light of continuing federal cutbacks, "how public television will support itself"—short of becoming a fourth commercial network (Kinsley, 1983, Posner, 1982, and Potori, 1984). At present, funding from the federal government is remaining at the minimum level and efforts are being made to preserve the quality of public television since cut­ backs of federal support. Therefore, public television revenues have been received from a variety of sources year after year such as subscriber, auctions, business and industry, and others. This study will focus on new phenomena and/or solutions to financial issues of public television stations since cutbacks in federal money were initiated by the Reagan administration. Also, the study will investigate the changes of various sources of money for public television stations since fiscal year, 1980. In particular, the different funding sources according to the type of station licensee—university, local author­ ity, state-owned, and community—will be examined.

Objectives of the Study Unlike educational television which has been sup­ ported by the Ford Foundation, colleges and universities, and other organizations, funding of America's public tele­ vision Stat ions--all nonprofit and noncommercial opera- tions--have emanated from a variety of sources in the public and private sectors. These include federal, state and local governments, colleges and universities, private foundations, corporations, and individuals. This diver­ sity helps to preserve public television's integrity and freedom from the influences and pressures of any single source. However, with the federal funding cutbacks of public television, PBS has tried to provide a financial base for 10 the future of public television in the United States. In a congressionally mandated advertising test, representa­ tives of ten stations met in New Orleans in 1982 and forged guidelines for incorporating advertising on an experimental basis into regular public television programming (Bittner, 1985). Overall, public television is considered as an impor­ tant source of quality programming, not available on commercial networks because of their need to garner audience ratings. The financing of public television depends on how successful some of its new income ventures are and how much local subscribers are willing to contribute in order to balance the loss of government support. Theoretically, this study applies to the passage of the Public Broadcasting Financing Act of 1975, which referred to the support for long-range funding of the system and which was signed into law by President Gerald Ford. Specific objectives of this study are the following: 1) Examination of changing funding sources for public television stations since cutbacks of federal support. 2) Comparison of the major sources of funding before 1979 and after 1980 according to type of licensee. 3) Generalization of long-range solutions which station managers of public television may have for a 11 desirable operation of their stations and/or public television in the United States. This study is different from other reports (i.e.. Corporation Annual Reports) in terms of considering financial issues of public television by and large since 1980. CHAPTER II

LITERATURE REVIEW

Four Categories of Station Licensee There are four categories of public station licensee depending on who owns and finances the stations and for what purposes.

First, there exist university stations. About 30 percent of all public television stations belong to this category. All of these stations are supported by state institutions of higher education. Many of these univer­ sity licensees run a single station for the immediate campus and for the greater metropolitan community surrounding the university. Examples of this category are: KUHT, University of Houston, Texas, which became the first ETV station in the country in 1953; WKAR, East Lansing, Michigan, licensed to Michigan State University; WHA, University of Wisconsin; KUON, University of Nebraska; and WUNC, University of North Carolina. Also, there are stations operated by two-year community col­ leges such as KOCE, Huntington Beach, California, and KVCR, San Bernardino, California (Wood & Wylie, 1977).

12 13 Second, local authority stations account for a little less than 10 percent of all the stations in the country. These stations are licensed to a local board of education and operated by school districts. They are also responsible for serving the schools in their districts. They provide some community public affairs programming, some local cultural materials, and some good out-of-school children's programming. However, the station management announces to a board of education which is charged with running a school system—not a community cultural resource—and the board often denies nonschool programming proposals that it would like to see produced but simply does not have the funds to support. Examples of local authority stations are KRMA (Denver, Colorado), WTHS (Miami, Florida), WETV (Atlanta, Georgia), and WNYE (New York City) (Wood & Wylie, 1977). Third, there are state-owned stations which are supported by a special state authority or commission principally and/or directly by taxes. About 35 percent of all PTV stations belong to this category. Alabama was the first state to set up a separate state commission to build and operate a series of ETV stations. Many other states formed separate state ETV commissions, state-wide operations run by a state university or state board of education, and even statewide closed circuit systems. 14 However, these stations are related directly to the state governments which face a programming problem in defining their political role in "terms of reporting straight to the governor or to the state legislature" (Wood & Wylie, 1977, pp. 76-77). Fourth, community stations are not directly supported by local or state tax bases. These stations are operated by citizens of a given community. About 25 percent of all public television stations belong to this category. Community stations are licensed to a nonprofit corporation established specifically for the purpose of owning and operating a noncommercial public television stations, rather than being licensed to a tax-supported institution. Although these stations have insecure financing in terms of no guarantee of next year's budget, there is diversity of funding sources which makes programming flexible. Examples of this category are KYVZ (Yakima, Washington), WTVP (Peoria, Illinois), KQED (San Francisco, California), WGBH (Boston, Massachusetts), WTTW (Chicago, Illinois), and WNET (New York City) (Wood & Wylie, 1977).

Federal Government Funding Most of the federal support for public television stations comes from the Corporation for Public Broadcasting. The funds are distributed to local 15 stations, production companies, and other agencies. Some monies are disbursed to stations through the Educational Broadcasting Facilities Program by the Department of Health, Education, and Welfare (HEW), and by other govern­ mental agencies for special programs. The funds from Community Service Grants (CSG) are given by Congress to the CPB on a formula written into a 1975 five-year public broadcasting funding bill, which has provided two federal dollars for every five non­ federal dollars raised locally and nationally by public broadcasting. The CSG dollars are unrestricted in their use. The increasing percentage of the CSG has been used for purchasing national programming and services arranged for and distributed by the Public Broadcasting Service. In 1984, public television stations received more than $65.3 million in Community Service Grants (Wood & Wylie, 1977, & Corporation for Publication Broadcasting Annual Report, 1984). Public television continues to receive a consider­ able portion of its funding from congressional appropria­ tions and through grants and contracts from federal agencies. There has been a decrease of these sources as a percentage of public television's total budget during the 1980s. During the Nixon administration, public television was seen as an adversary by the White House, 16 and in 19 7 2 Nixon vetoed a two-year, $155 million appro­ priation for the Corporation for Public Broadcasting that had been passed by the Congress. This led to a major restructuring of public television (Frank & Greenberg, 1982). The Carnegie Commission II (1979) stated that public broadcasting must be apart from federal funding, both to preserve its editorial integrity, and to avoid large fluctuations in its budget resulting from the changeable political scene in Washington. In its report, the Carnegie Commission recommended that the financial sup­ port for public broadcasting derived from individual contributions be increased from $50 million in 1977 to $205 million in 1985, with $175 million diverted toward PTV. Public television has been confronted with a big threat—drastic budget cutbacks in funds for the Corpora­ tion for Public Broadcasting by the Reagan administra­ tion. The public broadcasting system stations' total income grew by 16.4 percent during the early 1980s, to a record $6 77 million in 1982. Also, while the commercial networks have been losing viewers, public television's audience has increased year after year. However, federal funding has been a different situation. Federal money has amounted to more than $780 million to subsidize 17 public television since 1969. Through the Corporation for Public Broadcasting, Washington provided $115 million for public television in 1982--17 percent of total revenues. It was cut back by $24 million in 1983 (Blyskal, 1983). According to the 1982 report of the Corporation for ^ Public Broadcasting, the awareness viewing and fund rais- ( i ing of public television were measured by interviewing f H ) 1,0 41 adults in the continental United States. The study \ I showed that a majority of people who had realized the ; financial difficulties of public television agreed with the survival of public television. There was a decline in agreement with the proposition that government should totally support public television. President Reagan's veto of S2436 in 1984 pointed to a further decrease of federal support for public broad­ casting. The bill recommended appropriations of $238 million in fiscal year, 1987, $253 million in fiscal year, 1988, and $270 million in fiscal year, 1989. However, those figures were drastically reduced in the President's January, 1984, budget recommendations of $100 million, $85 million, and $70 million, respectively, for those three years (Potorti, 1984). Thus, there has been a great deal of confusion in both Congress and the Administration about what public 18 television is and should be. However, public television should accomplish what it was intended to do, which was to provide an alternative to the commercial networks.

State Governments Funding While federal support through the Corporation for Public Broadcasting represents a sizable dollar figure, state governments are continuing to provide more support for public television than any other single source. Financial support from state governments varies from state to state. They supported more than $152 million (22.4 percent of total funding) in fiscal year, 1982; about $154 million (21.5 percent) in fiscal year, 1983; and $170 million (21.7 percent) in fiscal year, 1984. In 1984, funding from state governments was the largest source for public television (Potorti, 1984, & Corpora­ tion for Public Broadcasting, Public Broadcasting Income Fiscal Year 1984). According to Bruce Christensen, PBS president, the major funder of public television continues to be state governments. Also, he stated that states such as New York, Connecticut, Kentucky, and South Carolina have been able to continue state support for their systems, allow­ ing the stations to deliver needed program services to the people of their states (Potorti, 1984, p. 40). 19 Funding from Individual Contributors And/or Subscribers As the number of public television viewers has increased, their contributions to their local stations have risen. In response to the programming offered and as a reaction to serious cutbacks in federal funding, it is likely that more viewers are realizing that television worth watching is television worth paying for (Fannon, 1985). A survey conducted in 1984 by Statistical Research, Inc., of public television membership in four public television markets--Syracuse, Boston, Madison, and New Orleans--showed that 76 percent of those station's mem­ bers contributed because of program offerings. In member households containing a child under 12 years of age, 81 percent specifically cited children's programming. Fifty-one percent of the members cited their local station's need and the worth of its cause as a reason for membership renewal. Thus, most public television stations request sub­ scriptions (or memberships) from their viewers. Usually stations set a minimum subscription fee from $15 to $25. This pledge level provides a monthly program guide and other information about the station and its programming to the subscribers (Wood & Wylie, 1977). 20 Subscriber and/or membership pledges are currently the fastest growing element of public television's income. Between 1981 and 1984, public television's | income from subscriptions increased 66 percent, from f $95.4 million (19.2 percent of total budgets of public television) to $157.9 million (20.2 percent) (Corporation for Public Broadcasting Annual Report, 1982 & 1984). As these contributions permit stations to produce or purchase programs that no other funding sources can sup­ port, individual contributions take on special importance for the continued diversity and vitality of public televi­ sion programming. Nearly four million individuals or families are members, and the stations devote significant resources from their tight budgets to seek new members and to encourage private support. Viewers funding repre­ sents all ages and income levels. Many stations receive donations of a dollar, or a week's allowance, from young viewers of Wonderworks, Reading Rainbow, The Electric Company, and public television's science and nature programs (Fannon, 1985). Although these contributions are not large figures, individual contributions are important because they provide the discretionary dollars needed by stations to support activities that they otherwise might not be able to justify to a school board or to a university 21 administration. However, in some aspects, local produc­ tion seems to be directly tied to these community funds, just as national programming is often tied to Community Service Grants (Hickey, 1982, & Wood & Wylie, 1977).

Funding from Business Of equal importance to the financial health of public stations are contributions from business. Repre­ senting the second fastest growing sector of public television's income, money from business contributions increased from $98 million (13.7 percent of total income) in fiscal year, 1983, to $123 million (15.7 percent) in fiscal year, 1984. Public television stations have to rely on businesses to support major new national programs and to contribute to the maintenance and improvement of local stations. According to Frank and Greenberg's study (1982), the public's preferences as to principal funding alternatives were measured by asking each person to choose which one of the following they would most like to see as the major source of funding for PTV: 1) use of federal taxes to fund public television; 2) state government funding of public television; 3) local community funds for public television; 4) television set tax—a tax placed on each new television set purchased from which the revenue would be used to support public television; 5) national 22 networks tax--commercial television networks would be taxed and the money would support public television; 6) commercial advertising time sold between public televi­ sion programs to support public television; 7) income tax checkoff--every individual would be given an option to designate a small portion of their income tax payment to be used for the support of public television. The study concluded that commercial time sold between programming was by far the most popular choice. The second most preferred method was an income tax checkoff, with a tax on TV sets being the least preferred.

In a congressionally authorized experiment, the Temporary Commission on Alternative Financing under the FCC selected ten participating stations for an advertis­ ing experiment in 1982. Congress initially gave the go-ahead for the alternative financing experiment. WTTW-TV (Chicago) was one of seven stations who actually sold advertising. The other six were: WHYY-TV, Phila­ delphia; WPBT-TV, Miami; WYES-TV, New Orleans; KCSM-TV, San Mateo, California; WQLN-TV, Erie; and WTPB-TV, Muncie, Indiana. Of the remaining three stations included in the test, two—WNET-TV (New York) and WQED-TV (Pittsburgh)--developed a program of "enhanced" under­ writing credits. The 10th station, WSKG-TV (Binghamton), experimented with a trade agreement with cultural 23 institutions under which the station produced and aired free spots in exchange for discounts to cultural events for viewers who were heavy contributors (Potorti, 1984, & Bittner, 1985).

Advertising has the potential for becoming a major source of income. The seven stations that aired tradi­ tional advertising earned more than $3 million during the test. The test showed that national advertisers as well as local advertisers were interested in reaching public television's upscale audience. United Airlines, Zenith, and Gallo bought commercial time on Chicago's WTTW-TV. However, Congress, following the recommendation of the Temporary Commission, did not authorize continuation or expansion of the advertising experiment after it ended in 1983 (Kinsley, 1983). On the other hand, many stations point to funding cutbacks across the country as the best reason to try commercials even though small stations can not attract as much advertising as large ones, and stand to lose propor­ tionally more if federal funding is cut off. Many adver­ tisers and their agencies have been trying to get their message on public television even though it is hard to reach upscale audiences. Underwriting has grown year after year since 1978. In 1982, AT&T contributed $10 million to make MacNeil/ 24 Lehrer the first one-hour prime-time news program. MacNeil/Lehrer exemplifies the growing value of corporate underwriting. Also, such large national underwriters as Gulf Oil and J. C. Penney have contributed much money to get more exposure for their money (Nachit, 1983 & Weisman, 1981). Besides these, businesses regularly provide in-kind services and auction donations to stations and to producers. Public television stations expect to continue to increase contributions from busi­ nesses which compensate for less certainty for future giving by the Corporation.

Funding from Other Sources Public television auctions regularly include dona­ tions from local businesses and individuals. Most public television stations hold auctions annually, not only because they provide income to the station but also because they involve large numbers of volunteers and busi­ nesses who develop a sense of involvement and participa­ tion in station activities through the auction. The auction concept started at KQED-TV (San Fran­ cisco) as a new idea for raising funds in 1954. By soliciting and then selling donated merchandise on the air, KQED managed to raise $5,000. This first auction started a fundraising revolution. Some stations conduct large wine auctions with donations from private cellars; 25 others hold special auctions of art and antique donations from artists, collectors, and viewers. PBS Enterprises National Auction Service provided public television stations $18.1 million in auction merchandise in 1983 and $2 million in 1984 (Potorti, 1984).

In addition, PBS Enterprises has beamed commercials from its satellite to local public stations, which record them and ship them on to commercial stations. It also offers teleconferencing for the business world and satel­ lite services for such corporations as Bell and Howell and Post Newsweek. This profit-making subsidiary is not big--about $4 million in 1984—but it was analyzing ways to turn public televisions' billion-dollar investment in physical plant facilities into profit (Aufderheide, 1984).

There are many smaller revenue sources besides the larger income producers. These are production and market­ ing of programming to other media (e.g., cable, subscrip­ tion television); increase in funded production (by alternative sources); coproduction of programming (with organizations outside the public broadcasting); foreign syndication; provision of teleconferencing services; sale of unused satellite time; rental of facilities; sale of facilities (studio and real estate); provision of market and coverage information; provision of advertising 26 agency-like services; product merchandising; direct mail sweepstakes; and book publishing (Aufderheide, 1984).

New video technology provides opportunities, too. PBS sells video cassettes of many programs, and this market seems to be growing year after year. Cable televi­ sion is another entry. When a city is wired, the cable system can carry all existing channels, and that gives the local PBS affiliates a clearer, more accessible signal.

There is more money in licensing. Companies like CBS's Gabriel Toys and J. C. Penney sell close to $200 million worth of Sesame Street products each year. They pay a standard 5% royalty to the nonprofit producer. Children's Television Workshop. That cuts production costs and thus flows indirectly to PBS through decreased program charges. However, toymakers don't pay to promote this merchandise, a cost savings worth millions. Instead, PBS does de facto advertising for free. Also, KCET-TV (Los Angeles) made some money from copy royalty. That situation produced the Cosmos series. A grant from Atlantic Richfield and the sale of foreign broadcast rights helped pay most of the $8 million production costs. Later Cosmos became a million-seller book. Out of its $2 per copy royalties, about 50 cents went to KCET (Blyskal, 1983). 27 Foreign television is also helping PBS with cost- efficient coproduction. PBS and Britain's Granada Televi­ sion shared in the $10 million production of Brideshead Revisited and The Brain. The $8.5 million provided by WNET-TV (New York) and television networks in Japan and France created an eight-part TV series, as well as a trade book and textbook (Blyskal, 1983). There are myriad ways of catching up with funding problems of public television stations in the United States. The methods are especially important since federal government money cutbacks are being made. The approach can be as different as the ownership pattern of stations—school-owned station (local authority station), state-owned station, community station, and university station — and/or state to state. For example, community stations may have a great variety of funding sources such as business and/or advertising. From the various funding sources—federal govern­ ment, state and local governments, subscribers, business, and others—increasing funding sources have been subscrib­ ers, state governments, business, auctions, and other sources such as development sale of technologies and so forth. However, there can not be one single solution to the funding problem of public television stations. 28 Research Questions

There are many sources of funding for public televi­ sion stations besides federal support as is evidenced in the literature review. In fact, federal money has not accounted for a major portion of the total income for public television stations (16.1 percent of total income in fiscal year 1984) since cutbacks of federal support. Therefore, public television stations have tried to increase their revenues from various sources such as busi­ nesses, subscribers, auctions, state and local govern­ ments, and various other sources. For several years the funding from these sources has been increasing.

Many articles emphasize that public television stations should continue their endeavors to discover new ways and methods to enhance the utilization of revenue generating sources. This study attempted to answer the following questions: 1. What are the predominant money sources of fund­ ing for public television stations since cutbacks of federal support? 2. Do the major sources of funding differ from station to station according to type of licensee or geographical area? 3. What are the long-range solutions to funding for public television stations? CHAPTER III METHODOLOGY

The primary purpose of this study was to investigate changes in the funding of public television stations in the United States since cutbacks of federal support and examine the long-range solutions for the future of public television. A questionnaire which asked station managers to answer financial issues about their station and their specific issues about funding was mailed to 172 public television stations in the United States.

Variables The dependent variables in this study are the various funding sources of public television stations in the United States. These sources which were modified from the Annual Report of Corporation for Public Broadcasting are: 1) subscribers; 2) state government; 3) business; 4) Corporation for Public Broadcasting; 5) individual contributions; 6) state colleges and universities; 7) local government; 8) federal grants and contracts; 9) foundations; 10) private colleges and universities; 11) auctions; and 12) other sources. These

29 30 are measured by four types of questions in the questionnaire.

The first question asked respondents to compare station budget sources before 1979 and after 1980. Twelve funding sources (dependent variables) were coded by assigning the value G(3) to be greater than before 1979, S(2) to be the same as before 1979, and L(l) to be less than before 1979. Among twelve sources, the last one (other sources) was asked to specify the name of sources.

A second question asked station managers to rank twelve funding sources from 1 (being the smallest support) to 12 (being the greatest support). This question was divided into two parts--before 1979 and after 1980--so that respondents could compare each other according to 12 dependent variables. The last question, other sources, was also asked to specify the name of source. The third question asked for the actual estimate (in thousands) of the amount of money they received from various sources during 1985. The last case asked them to specify other sources which currently support public television stations.

The last question asked for long-range solutions for station funding. Seven-point scales were used so that 31 the most important source was given seven points and the least important source was worth one point. The other sources for long-range funding were also specified. Independent variables include the types of licensee --university stations, school-owned stations (local authority), state-owned stations, community stations, and single agency station. One question was used to measure the ownership. It is: What is the type of licensee of your station? Possible answers were: "single agency station, " which is operated independently; "school-owned station," which is licensed to a local board of education and operated by school districts; "state-owned station," which is supported by a special state authority or commission principally and/or directly by taxes; "community station," which is operated by citizens of a given community; and, "if your station is affiliated with a university or college, please identify school." To measure whether there was additional income from sources other than the main sources, respondents were asked to check as many possible sources as appropriate. These are: 1) production and marketing programming; 2) cable and subscription TV; 3) co-production of 32 programming; 4) foreign syndication; 5) provision of tele­ conferencing services; 6) sale of unused satellite time; 7) rental of facilities; 8) sale of facilities; 9) provi­ sion of market and coverage information; 10) provision of advertising agency-like service; 11) product merchandis­ ing; 12) direct mail sweepstakes; 13) book publishing; 14) licensing (royalty).

Respondents were asked to give any information or advice they had for long-range planning and/or other suggestions for funding of public television.

The respondents were also asked to estimate total revenue of stations in 1985 and 1986, whether they were satisfied with that level of funding, and whether they have suffered a great loss since cutbacks of federal support in 1980. Selling commercial announcements and any special funding sources which other stations may not have were also investigated. These are: If your station is approved to sell commercial announcements on an experimental basis, how much do those commercials contribute to the funding of your stations? This was measured by a seven-point scale from 7 (the most helpful source) to 1 (the least helpful source). When you compare your station with others, are you supported by any other source not mentioned in this questionnaire? Will you have any additional funding source not mentioned 33 in this questionnaire for 1986? For two questions, respondents were asked to answer "yes" — specify the name of sponsor and real number of money—or "no. "

Samples

The sample consists of 172 public television stations in the United States including the mainland and Hawaii. Stations in U.S. possessions were excluded from this study because they may have different financial situations from the mainland and Hawaii public television stations.

Of the 172 public television stations, 20 were regional network stations (see Appendix 3). The other

159 were independent public television stations in 50 states. Questionnaires were mailed to station managers at the 17 2 stations. A stamped, self-addressed envelope was enclosed for convenience of returning the questionnaire.

Limitations of this Study

There are two limitations in this research. The biggest weakness is the small sample. Only 43 percent of questionnaires were returned from three mailings.

Nevertheless, many larger stations did not send their questionnaires back. Also, 38 states out of 50 states 34 participated in this study. Therefore, the results may not be applicable to all public television stations in the United States.

Another weakness is the use of the terms subscribers and individual contributors. At some stations, these terms have the same meaning and others treat these as separate funding sources. This study analyzed these two sources separately. It depends on how each station categorizes its funding sources. Therefore, more thorough pretests should be conducted to obtain a more detailed list of funding sources for public television stations. Also, the funding sources mentioned in this study may not be adequate. Although this list of funding sources has been testified by previous studies, more updated funding sources should be clarified.

Procedures The questionnaire was pretested prior to mailing by the station manager of KTXT-TV (Lubbock, TX). After the pretest, some revisions were made. In December, 1985, questionnaires were mailed to each public television station in the United States. By January 10, 1986, 45 questionnaires had been received from station managers.

Second mailings were conducted in January, 1986. The same questionnaires were sent to public television 35 stations which had not returned their questionnaires. By February 10, 28 additional questionnaires were returned. For more participation from the larger stations a third questionnaire was mailed to 10 stations with a personal letter from Dr. Dennis A. Harp, Director of Telecommunications at Texas Tech University, which asked the station managers to participate in this study. The ten stations included: KCET-TV (Los Angeles, CA), WTTW-TV (Chicago, 111.), Iowa Public Television (Des Moines, Iowa), WGBH-TV (Boston, Mass.), WTVS-TV (Detroit, Michigan), New Jersey Public Broadcasting Authority (Trenton, N.J.), WNET-TV (New York, N.Y.), WQED-TV (Pittsburgh, PA), South Carolina Educational Television Commission (Columbia, S.C.), and KUHT-TV (Houston, TX). By the end of February, only WTTW-TV had returned a questionnaire. Iowa Public Television sent a letter which indicated they could not participate in this research because of a lack of staff committed to assembling the materials for the questionnaire. Following three distributions of the questionnaire, the number of usable questionnaires totaled 74. States which returned their questionnaires more than others were California, Indiana, Michigan, Tennessee, and Texas. The mean of population of stations which participated in this study was 1,804,062. Appendices 2 and 3 give detailed information about the sample. 36 Table 1 shows the type of licensee of sample. School-owned stations (local authority station) were 6; state-owned station, 18; communication station, 31; and university station, 19. Also, network stations were 16 and independent stations were 58.

Analyses There are 94 variables in this questionnaire. Of them, 48 variables serve as dependent variables. Four variables work as independent variables. Four kinds of statistical analyses were used for the data.

(A) Frequency: Frequency distributions were calculated for every variable. The mean, mode, median, standard deviation, range, standard error of each variables was calculated for descriptive purposes. (B) Zero-order correlations: Zero order correlations were calculated in order to test for relationships between the four independent variables and the 12 dependent variables. (C) Spearman rank-order correlation: Spearman correlations were employed to test the stability of the 12 dependent variables which were asked by rank-order. (D) Least-squares mean analysis of variance: In order to compare the internal relationships of the 37

Table 1 Type of Licensee of Sample

Licensee Number

School-owned station (local authority station) 6 State-owned station 18 Community station 31 University station 19 n = 74 Network stations 16 Independent stations 58 n = 74 38 independent variables with each of the 12 dependent variables, least-squares mean analysis of variance was also used. CHAPTER IV RESULTS AND DISCUSSIONS

Descriptive Analysis The descriptive statistical analysis shows that 64.9 percent of the sample are not satisfied with their total revenues in 1985. The mean of 1985 total income is $4,259,898. However, the mean of their preferable total revenue in 1985 is $5,836,168. On the other hand, the mean of revenue in 1986 is $4,204,938 which is less than in 19 8 5. Therefore, although the majority of respondents would like to have more income for operating their stations, it appears to be decreasing rather than increasing at the current time. Comparing their budget before 1979 and after 1980, 7 4.3 percent have suffered a great loss since cutbacks of federal support in 1980. As an effort for improving their income, 2.7 percent of respondents were approved to sell commercial announcements on an experimental basis. The mean score of the contribution to the funding from commercials is 7 (the most helpful source) out of 7-point scales. Also, only 2.7 percent of respondents are supported by special source which they have uniquely

39 40 comparing their stations with others. For 1986, 5.4 percent of respondents will have any additional funding sources not mentioned in this study. However, most did not specify the sources.

From these analyses, most respondents have had the same funding sources for their stations. Selling commercials has a potential for more income and better operating the stations.

Zero-order Correlation Zero-order correlation was used to explore the relationship between types of licensee and funding sources. Table 2 shows relationships between types of licensee and 12 dependent variables—comparing budget sources before 1979 and after 1980. Table 2 indicates that funding sources have both negative and positive relationships according to types of station ownership. There are positive relationships between subscriber and community (r = .121) and university stations (r = .006). State-owned stations have negative relationships with subscribers (r = -.163) and state governments (r = -.017). Corporation for Public Broadcasting has only a positive relationship with university stations (r = .147), while relationships with other types of licensee have negative impact. 41

Table 2

Zero-order Correlation Coefficients Between Type of Licensee and Funding Sources (Comparing budget sources before 1979 and after 1980)

Type of Licensee

School- owned Funding (local State- Source authority) owned Community University

Subscribers -.068 -.163 .121 .066 State Governments .106 -.017 -.091 .055 Business .058 -.045 .012 -.006 Corporation for Public Broadcasting -.070 -.072 -.026 .147 Individual Contributors .052 .061 -.068 -.015 State Colleges and Univer­ sities -.001 -.118 -.159 .303** Local Governments .118 -.023 -.024 -.023 Federal Grants and Contracts .130 .056 -.037 -.096 Foundations .027 .051 -.035 -.027 Private Colleges and Univer­ sities .114 -.244* .230* -.094 Auctions .402*** -.088 -.146 .002 Other Sources -.107 .001 .098 -.046

* p < .05 ** p < .01 *** p < .001 42 There is a significant positive relationship between source of state-colleges and universities and university stations (r = .303, p £ .01). However, other type of stations have negative relationships. The relationship between local governments and school-owned (local authority) stations is positive (r = .118) but not significant. Other stations have negative relationships with this funding source. Private colleges and universities have a significant positive relationship with community stations (r = .230, p < .05), while the relationship with state-owned stations is negative (r = -.244, p <^ .05). Auctions have a significant positive relationship with school-owned (local-authority) stations (r = .402, p < .001). Thus, according to types of ownership, there are differences in funding sources. Community stations are positively related to private colleges and universities, while state-owned stations are negatively related to this funding source. School-owned (local authority) and university stations are positively associated with auctions and state colleges and universities. Table 3 provides relationships between types of licensee and income from 12 dependent variables in 1985. State-owned stations have a significant positive relation­ ship with state governments (r = .415, p ± .001). Corporation for Public Broadcasting has negative 43

Table 3 Zero-order Correlation Coefficients Between Type of Licensee and Funding Sources (Income in FY 1985)

Type of Licensee

School- owned Funding (local State- Source authority) owned Community University

Subscribers -.101 -.111 .211 .069 State Governments .022 .415*** -.265 -.123 Business -.027 -.087 .196 -.121 Corporation for Public Broadcasting .153 -.041 -.150 -.034 Individual Contributions -.004 -.036 -.148 .210 State Colleges and Univer­ sities .002 -.091 -.261* .392*** Local Governments .383*** -.103 -.006 -.132 Federal Grants and Contracts -.047 -.065 -.070 -.046 Foundations -.006 -.096 -.140 -.069 Private Colleges and Univer­ sities -.033 -.080 -.076 -.190 Auctions -.031 -.238 .312** -.101 Other Sources .030 -.063 .171 -.153

* p < .05 ** p < .01 *** p < .001 44 relationships with state-owned (r = -.041), community (r = -.150), and university stations (r = -.034), and only positive relationship with school-owned stations (r = .153). Federal grants and contracts have negative relationships with all types of ownership. From these, federal governments source is not related to types of ownership.

University stations have a significant relationship with state colleges and universities (r = .392, p j< .001), while community stations have a negative relation­ ship (r = -.261, p <_ .05). School-owned (local authority) stations have a positive relationship with local governments (r = .383, p <_ .001). Contrasting with Table 2 in which auctions have a positive relation­ ship with school-owned stations, in 1985 income from auction has a significant positive relationship with community stations (r = .312, p ^ .01).

Table 4 shows relationships between types of licensee and long-range solutions for funding from 12 dependent variables. This table is partially different from Table 2 (comparing budget source before 1979 and after 1980) and Table 3 (income in FY 1985). School- owned (local authority) stations do not have any signifi­ cant relationships with 12 funding sources. State-owned stations have negative relationship with subscribers

(r = -.259, p <_ .05) and auctions (r = -.388, 45

Table 4

Correlation Coefficients Between Type of Licensee and Funding Sources (Long-range solutions)

Type of Licensee

School- owned Funding (local State- Source authority) owned Community University

Subscribers -.066 -.259* .188 -.083 State Governments .109 .093 -.058 -.094 Business -.104 -.049 .014 .099 Corporation for Public Broadcasting -.044 .098 -.226* .190 Individual Contributors .015 .054 -.047 -.009 State College and Univer­ sities -.062 -.090 -.244* .413*** Local Governments .120 -.181 .128 -.043 Federal Grants and Contracts -.044 -.048 -.047 .132 Foundations -.010 .058 .041 -.100 Private College and Univer­ sities -.109 -.143 .031 .176 Auctions -.155 -.388*** .267* .177 Other Sources .109 -.096 .095 -.083

* p < .05 ** p < .01 *** p < .001 46 p 1 .001). These two types of stations do not have any significantly positive relationship with 12 funding sources. Community stations have a positive relationship with auctions (r = .267, p <_ .05), while there are negative relationships with the Corporation for Public Broadcasting (r = -.226, p £ . 0 5 ) and state colleges and universities, (r = -.224, p <_ .05). University stations are related to state college and universities (r = .413, p < .001).

Table 5 shows means of long-range solutions of income sources. From 7-point scales (7: the most important source, 1: the least important source), subscribers are regarded as a most important source (x = 5.027). Second most important source is a business (x = 4.959). The third source is the Corporation for Public Broadcasting (x = 4.730). The least important source is private colleges and universities (x = 1.649). The second least important source is local governments (X = 2.095). From Tables 4 and 5 about long-range solutions of income sources, although subscribers and business are negatively related to school-owned and state-owned stations, these two funding sources are regarded as more important sources from overall mean scores than the others. 47

Table 5 Mean of Long-range Solutions of Income Sources

Income Source Mean

Subscribers 5.027 State Governments 4.405 Business 4.959 Corporation for Public Broadcasting 4.730 Individual Contributors 4.068 State Colleges and Universities 2.824 Local Governments 2.095 Federal Grants and Contracts 2.635 Foundations 3.419 Private Colleges and Universities 1.649 Auctions 3.284 Other Sources 2.946 48 Spearman Rank-order Correlation Spearman correlations were used to test the stabil­ ity of the funding sources. Table 6 provides Spearman correlation coefficients between 12 funding sources before 1979 and after 1980. All of the sources have the stability of the rankings between before 1979 and after 198 0. The most stable source is other sources (r = .740, p <_ .001). The second most stable source is founda­ tions (r = .682, p <^ .001). The third most stable source is federal grants and contracts (r = .679, p _< .001). The least stable source is private colleges and universities (r = .326, p £ .01). Second least stable source is state governments (r = .490, p £ .001). Third least stable source is business (r = .496, p £ .001).

Least-squares Mean Analysis of Variance Least-squares mean ANOVA employed to compare the differences among types of licensees with the 12 funding sources. Table 7 shows the comparison of the sources of funding before 1979 and after 1980 by type of licensee. From least-squares means, there are only significant comparisons between funding of state colleges and universities and three types of licensee; state-owned, community, and university stations. Among those three type stations, university stations have difference from 49

Table 6 Spearman Correlation Coefficients Between Dependent Variables Before 1979 and After 1980

Funding Sources Correlation

Subscribers .524*** State Governments .490*** Business .496*** Corporation for Public Broadcasting .560*** Individual Contributors .585*** State Colleges and Universities .573*** Local Governments .560*** Federal Grants and Contracts .679*** Foundations .682*** Private Colleges and Universities .326** Auctions .3/^ Other Sources .740***

** p £ .01 *** p < .001 50

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Thus, differences among licensees of station of income in FY 1985 are in the sources of state governments, state colleges and universities, local governments, and auctions. Also, all of these sources are significantly explained by type of licensee.

Table 9 shows comparisons of the type of licensee with long-range funding sources by type of licensee. Least-squares means indicate that community stations would like to depend on findings from subscribers (x = 5.68) more than state-owned stations. University stations would like to rely on fundings from the Corporation for Public Broadcasting (x = 5.37) and state colleges and universities (x = 4.12) more than community and state-owned stations. These types of stations also depend on funding from auctions (x = 3.95) more than state-owned and community stations.

From overall analyses, 14 percent of the variances in income from state colleges and universities can be 2 explained by type of licensee (R = .14, F = 3.99, 56

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Table 10 provides percentages of station licensee types of employing special income sources. School-owned (local authority) stations have 83.3 percent of source from provision of teleconferencing services, 66.7 percent of source from production and marketing programming, 66.7 percent of source from rental of facilities, and another 66. 7 percent of source from licensing (royalty). However, school-owned stations do not have any income from sale of facilities, provision of market and coverage information, and provision of advertising agency-like service. State-owned stations take 44.4 percent of source from production and marketing programming, 55.6 percent of source from provision of teleconferencing services, and 50 percent of source from rental of facilities. This type of station does not have any funding from provision of market and coverage information and provision of advertising agency-like service. Community stations get 74.2 percent of source from 59

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as as as CM OJ CN as a rH fH fH •H X! CO V4 I CU CU 73 r>. vo ro CU G 4-J CU o fd G vo in ro G +J > ro •H M-) -P en o G o O 0) U QA I 4J >i EH o fO fd JH O CU u o x: G o x: vo vo U ^ H 4-J vo 0 en o ^ m fH fd X> fd EH

tj\ G CO •H CU CO M •H fd 73 4J "-» G CO >i fd a 4J x: CU rH u CU tJ> fd CO u ^ G >1 (U Q) CO •H 0 o B x: u u fH CO ^^ s G •H •H 0 0 fd fH cn en •H g x> G 4J J3 •H CU U 4-) a CO g :3 U G 0 TJ CU j^ CU u 0 u 0 U G u •H 0 •H H P4 Q CQ iJ 61 production and marketing programming, 48.4 percent of source from co-production of programming, 74.2 percent of source from provision of teleconferencing, and 66.7 percent of source from rental of facilities. Community stations do not have any income from sale of facilities. University stations have 52.6 percent of source from production and marketing programming, 57.9 percent of pro­ vision of teleconferencing services, and 52.6 percent of source from rental of facilities. However, this type of station does not have any provision of market and cover­ age information, provision of advertising agency-like service, and product merchandising. The overall analysis indicates that 66.2 percent of all the types of stations provide teleconferencing services; 60.8 percent, production and marketing programming; 59.5 percent, rental of facilities. The least used sources are provision of market and coverage information (1.4 percent) and provision of advertising agency-like (4.1 percent). CHAPTER V SUMMARY AND CONCLUSIONS

Conclusions from Findings

The major objectives in this study were to explore changes in funding sources of public television stations in the United States since cutbacks of federal support and examine the long-range solutions for the future of public television. Three questions involved in this study were: 1) What are the predominant sources of funding for public television stations since cutbacks of federal support? 2) Do the major sources of funding differ from station to station according to type of licensee? and 3) What are the long-range solutions to funding for public television stations? First, from the results, the increasing funding sources after 1980 are subscribers, state government, business, individual contributions, auctions, and other sources such as underwriting, contract, production, publishing, and so on. From income in FY 1985, state governments are the biggest funding source. The second is subscribers. The Corporation for Public Broadcasting is the third even though the proportion of income from

62 63 this source is decreasing in comparison to pre-1979. Thus, the main sources of funding for public television stations are state governments and subscribers, while the increase of business and auctions is remarkable. This phenomenon seems to result from cuts in the federal government's budget for public television after 1980.

Second, these increasing funding sources after 1980 are different by type of licensee. Subscribers are becoming more important for community and university stations than in others. Generally, state government funding is growing in school-owned (local authority) and university stations, while state-owned stations were most supported by this funding source in FY 1985. Business has increased in school-owned stations after 1980 even though community stations are getting more income from this funding source in 1985. Individual contributors are becoming more important for school-owned and state-owned stations than others. However, in 1985, individual contributors gave more money to university stations. Auctions are growing in importance for school-owned (local authority) and community stations. Other sources have increased in school-owned stations after 1980. These sources include income from school-donations, local school licenses, production contracts, educational telecommunication projects, and production services. 64 Other sources from which community stations received more income in 1985 are underwriting, contracts, production (ITAS, Teletex, and cable), industrial auctions, publishing, and production rental.

Therefore, funding sources of public television in | the United States differ by type of licensee. School ? owned (local authority) stations are more likely to receive funds from local governments and auctions. State owned stations are more likely to receive funding from state governments, while community stations receive more support from private colleges and universities and auctions. As expected, university stations receive more support from state colleges and universities.

Of the 12 funding sources, subscribers, state governments, and business are regarded as long-range ^ # ^ funding sources for the future of public television by ' all types of stations. The Corporation for Public Broadcasting is also considered as a long-range solution.

According to type of licensee, school-owned (local authority) stations emphasize federal funding as a long-range solution. State-owned stations state that enhanced underwriting is one of the long-range solutions. Levying a tax on advertising on commercial television may be also a long-range solution. In this way, advertising dollars can flow into public television 65 without competing with commercial television as would be the case if advertising were permitted on public televi­ sion. However, many state-owned stations consider federal funding as their long-range solution. Community stations point out subscribers and business as well as federal funds as primary long-range solutions. There are also tax credit incentives, enhanced underwriting, and limited advertising clustered at the beginning and end of a portion of the broadcast schedule. Spectrum technology --Vertical Blanking Interval (VBI), subcarriers, teletex, and videotex — for non-profit and for profit information services can be utilized for long-range solutions. Uni­ versity stations indicate that commercial television should help funding of public television through annual license fees, special taxes, or donated air time to assist in fund raising on a national basis. They are also emphasizing telecourse productions, subscriptions, lease of facilities, telemarketing, and enhanced underwriting as well as federal funds.

Thus, although long-range solutions for funding of public television in the United States are a little dif­ ferent from station to station according to type of licensee, all of them want the federal government to increase their support for the future of public televi­ sion stations revenue. 66 Given these phenomenon, except for federal funding, it is quite likely that public television stations in the United States will have to seek greater financial support from its viewers and/or businesses. Such support could come from subscribers and auctions as it does now, or it could be derived from various businesses such as production, publishing, rental of facilities, or pay cable service. In any of these cases it would become increasingly important for public television to develop programming to meet the needs of the audience.

Recommendation for Further Study The findings in this study only provide general information about funding sources of public stations after 1980 and possible long-range solutions. Further study can be conducted to explore more detailed and specific information. Funding sources should be investigated year after year so that trends in funding for public TV could be identified as soon as possible. Also, audiences' responses to public television funding and program improvement need to be studied through field surve"y. By doing this, more audiences will be concerned about public television stations' funding and its future. M^Tre'over, the public will be able to support public television stations in the United States with more philanthropy. REFERENCES

Abramson, D. (1983). First findings: Positive. Mar- Ketinq & Media Decision, 18, 72-76.

Agee, W. K. , Ault, P. H. , & Emery, E. (1985). Introduc­ tion to mass communications. New York: Haroer & Row, Publishers.

Auf derheide, p. (1984). TV worth paying for? The Pro­ gressive, j48, 33-36.

Bittner, J. R. (1985). Broadcasting and telecommunica- tjLon. Englewood Cliffs, N.J.: Prentice- Hall, Inc.

Blakely, R. j. (1979). To serve the public interest: Educational broadcasting in the United States. Syra­ cuse, NY: Syracuse University Press.

Blyskal, J. (1983). Kicking the habit. Forbes, 131, 80-82.

Carnegie Commission on the Future of Public Broadcasting. (1979). A public trust. New York: Bantam Books. Carnegie Commission on Educational Television. (1967). Public television: A program for action. New York: Harper.

Cater, D. & Nyhan, M. J. (1976). The future of public broadcasting. New York: Praeger.

Clarke, G. (1981). The latest perils of PBS. Time, 117, 79.

Corporation for Public Broadcasting. (1985). Public broadcasting income fiscal year 1984. Washington, D.C.

Corporation for Public Broadcasting. (1985). Five year plan for the development of public telecommunications services. Washington, D.C. Corporation for Public Broadcasting. (1984). Annual report. Washington, D.C.

67 68 Corporation for Public Broadcasting. (1981). Awareness viewing and listening on-air fund raising. Washing­ ton, D.C. Corporation for Public Broadcasting. (1981). Annual report. Washington, D.C. Corporation for Public Broadcasting. (1980). Proceed- ings of the 1980 technical conference; Quantitative television ratings. Washington, D.C: CPB Office of Communication Research. Corporation for Public Broadcasting. (1979). Annual report. Washington, D.C. Corporation for Public Broadcasting. (1976). Annual report. Washington, D.C. Esplin, F. (1985). CPB: Roles and function. Cur­ rent, 4^, 5-9. Esplin, F. C. (1975). Long range funding: The forgotten chapter. Public Telecommunications Review, 22-27. Fannon, P. M. (1985). Tax reform and charitable contributions. National Association of Public Television Stations, Washington, D.C. Frank, R. E., & Greenberg, M. G. (1982). Audiences for public television. Beverly Hills, CA: Sage Publica­ tions. Gibson, G. H. (1977). Public broadcasting. New York: Preagar Publishers. Hickey, N. (1982). Public TV: Why reports of its death seem premature. TV Guide, 30, 12-18. Kevin, P. (1975). Should federal money support public television? TV Guide, 23, A-3. Kinsley, M. (1983). None dare call it commercial. Harper's, 266, 9-13. Macy, J.f Jr. (1974). To irrigate a wasteland: The struggle to shape a public television system in the United States. Berkeley: University of California Press. 69 Mahony, s. , et al. (1980). Keeping pace with the new television: Public television and changing technol­ ogy. New York: Carnegie.

McKay, R. B. (1976). Financing public broadcasting: Problem or symptom. Public Telecommunications Review, 29-35. ~~"

Myrick, M., & Keegan, C. (1981). Review of 1980 CPB communication research findings. Washington, D.C: CPB Office of Communication Research. Nachit, M. (1983). PBS may get a few more words from its sponsors. Businessweek, 32, 70-72. Netzer, D. (1969). Long-range financing of public broad­ casting. New York: National Citizens Committee for Broadcasting. Pepper, R. M. (1979). The formation of the Public Broad­ casting Service. New York: Arno Press. Posner, M. (1982). Troubled signals from an ailing public TV, Maclean's, 95, 42-43. Potorti, D. (1984). Public TV veto: Can station ingenu­ ity overcome the shortfall? Television/Radio Age, 21, 39-42. Roman, J. (1980). Programming for public television. Journal of Communication, 30, 150-156. Rowland, W. D., Jr. (1980). The federal regulatory and policy-making process. Journal of Communication, 20, 139-149. Soper, M., & Bass, S. (1985). The auction of the future. Public Broadcasting Service. Washington, D.C Television digest with consumer electronics. (1984). Confrontation on CPB funding. Television Digest, 2±, 3-4. Television digest with consumer electronics. (1984). More on PTV ads. Television Digest, 24, 4. Television digest with consumer electronics. (1984). CPB authorization jeopardized. Television Digest, 24, 8. 70 Television digest with consumer electronics. (1983). CPB budget cuts. Television Digest, ^Ir 3. Television digest with consumer electronics. (1982). CPB give $6 million for bid TV. Television Digest, 22, 6. Tressel, G. W. , Buckelew, D. P., Suchy, J. T. , & Brown, P. L. (1975). The future of educational telecommuni­ cation. Lexington, MA: Lexington Books. TV Guide. (1982). Public TV: Why reports of its death seem premature. Los Angeles, CA: Triangle Publications. U.S. Congress, House Committee on Energy and Commerce, Subcommittee on Telecommunications, Consumer Protec­ tion and Finance. Alternative financing options for public broadcasting. Washington, D.C: Government Printing Office. Weisman, J. (1981). Advertisers train for more power over public TV. TV Guide, 29, A-2. Weisman, J. (1981). Why big oil loves public TV? TV Guide, 2i' 4-10. Wood, D. N. , & Wylie, D. G. (1977). Educational tele­ communications. Belmont, CA: Wadsworth Publishing Company, Inc. APPENDICES APPENDIX 1

Names of Network Stations

1) Alabama Educational Television Commission (WBIQ-TV,

WIIQ-TV, WDIQ-TV, WFIQ-TV, WHIQ-TV, WGIQ-TV,

WEIQ-TV, WAIQ-TV, and WCIQ-TV).

2) Arkansas Educational Television Commission (KAFT-TV,

KEMV-TV, KETS-TV, KETG-TV, and KTEJ-TV).

3) Connecticut Educational Telecommunications Corpora­

tion (WEDH-TV, WEDY-TV, and WEON-TV).

4) Georgia Public Telecommunications Commission

(WGTV-TV, WCLP-TV, WDCO-TV, WJSP-TV, WACS-TV,

WABW-TV, WVAN-TV, WXGA-TV, and WCES-TV).

5) Hawaii Public Broadcasting Authority (KMET-TV and

KMEB-TV).

6) Iowa Public Broadcasting Board (KBIN-TV, KDIN-TV,

KTIN-TV, KIIN-TV, KYIN-TV, KHIN-TV, KSIN-TV, and

KRIN-TV).

7) Kentucky Authority for Educational Television

(WKAS-TV, WKGB-TV, WCVN-TV, WKZT-TV, WKHA-TV,

WKLE-TV, WKMJ-TV, WKMA-TV, WKMR-TV, WKMU-TV,

WKOM-TV, WKON-TV, WKPD-TV, WKPI-TV, and WKSO-TV).

72 73 8) Louisiana Educational Television Authority (WLPB-TV), KLPB-TV, KLTV-TV, KLTS-TV, KLTM-TV, and KLPA-TV).

9) Central Michigan University (WCML-TV, WCMU-TV, WCMV-TV, and WCMW-TV).

10) Mississippi Authority for Educational Television

(WMAA-TV, WMAB-TV, WMAE-TV, WHAM-TV, WHAN-TV, WMAV-TV, and WMAW-TV).

11) Nebraska Educational Telecommunications Commission

(KTNE-TV, KMNE-TV, KHNE-TV, KLNE-TV, KRNE-TV,

KXNE-TV, KPNE-TV, and KYNE-TV).

12) New Hampshire Public Television (WENH-TV, WLED-TV,

and WEKW-TV).

13) New Jersey Public Broadcasting Authority (WNJS-TV,

WNJM-TV, WNJB-TV, and WNJT-TV).

14) The University of North Carolina Center for Public

Television (WUNC-TV, WUNF-TV, WUND-TV, WUNG-TV,

WUNK-TV, WUNE-TV, WUNM-TV, WUNJ-TV, and WUNL-TV).

15) Prairie Public Broadcasting, Inc. (KDSE-TV, KFME-TV,

KGFE-TV, KBME-TV, KSRE-TV, and KWSE-TV).

16) Oregon Educational and Public Broadcasting Service

(KOAC-TV, KTVR-TV, KOAP-TV, and KOAB-TV).

17) South Carolina ETV Commission (WEBA-TV, WITV-TV,

WRVK-TV, WHMC-TV, WJPM-TV, WNTV-TV, WNEM-TV, and

WRET-TV). 74

18) South Dakota Educational Television Board (KDSD-TV,

KPSD-TV, KZSD-TV, KTSD-TV, KBHE-TV, and KQSD-TV).

19) Vermont Educational Television (WETK-TV, WVER-TV,

WVTB-TV, and WVTA-TV).

20) Educational Communications Board in Madison, WI

(WHWC-TV, WPNE-TV, WHLA-TV, WHRM-TV, WLEF-TV). APPENDIX 2 Location (State) of Sample

Location Location (State) Findings (State) Findings

Alabama 1 Minnesota 2 Alaska 1 Missouri 1 Arizona 1 Nebraska 1 Arkansas 1 New Mexico 1 California 4 New York 2 Colorado 2 North Carolina 2 Connecticut 1 Ohio 3 Florida 3 Oklahoma 1 Georgia 1 Pennsylvania 1 Hawaii 1 South Carolina 2 Idaho 2 South Dakota 2 Illinois 3 Tennessee 5 Indiana 5 Texas 4 Kansas 3 Utah 1 Kentucky 1 Vermont 1 Louisiana 1 Virginia 2 Maine 1 Washington 2 Maryland 1 West Virginia 1 Michigan 5 Wisconsin 2

Total = 74

75 APPENDIX 3 Population of Station Area

Population (thousand) Findings

10 - 100 5

101 - 500 16

501 - 1000 18 1001 - 2000 7

2001 - 3000 8 3001 - 4000 4 4001 - 8000 5 8001 - 10000 2

Missing 9 Total = 74 Mean = 1804.062

76 APPENDIX 4

Questionnaire

Dear Station Manager:

I am a graduate student of Mass Communications at Texas Tech University, Lubbock, Texas. I am conducting a study of the funding of public television stations in the United States. Please fill out this questionnaire and return it to me as soon as possible (before 5th of February). I would appreciate any additional information and/or suggestions about the funding of public TV stations you might share. Enclosed is a stamped, self- addressed envelope for your convenience.

1. Station call letters: 2. Location of your station: city, state. 3. Estimated population of your coverage area: ,000. 4. What is the type of ownership of your station: single agency station , school-owned station , state-owned station , community station . If your station is affiliated with a university or college, please identify school: . 5. How many students are studying in the university which your station serves? ,000 6. How many years have you worked as station manager at this station?

7. Station signon date: 19 . 8. For fiscal year, 1985, how much is the expected total revenue of your station? $ ,000 9. Do you think this expected funding is sufficient for present operating your station? yes , no .

77 78 10. If no, what would you like as a total budget? $ ,000 11. Comparing your budget before 1979 and after 1980, have you suffered a great loss since cutbacks of federal support in 1980? yes , no . 12. Compare your budget sources before 1979 and after 1980. (Please circle. G: greater than before 1979, S: same as before 1979, L: less than before 1979).

subscribers , G S L state government , G S L business , G S L Corporation for Public Broadcasting G S L individual contributors G S L state colleges and universities.... G S L local government G S L federal grants and contracts G S L foundations G S L private colleges and universities.. G S L auctions G S L other sources G S L (please identify it) 13. Rank from 1 to 12 (1 being the smallest and 12 the greatest support). before 1979 after 1980

subscribers state governments business - Corporation for Public Broadcasting > individual contributors state colleges and universities local governments.. federal grants and contracts 79 foundations private colleges and universities auctions other sources (please specify)

14. How much has your station been funded by the following sources this FY (1985)? subscribers $ __i 000 state governments $ _,000 business $ __/ 000 Corporation for Public Broadcasting $__ _i 000 individual contributors $__ _,000 state colleges and universities $ * QQO local governments $ .^ ,000 federal grants and contracts $ '""" foundations ^ __' ^^^ private colleges and universities $__ -'""^ auctions $ ' 00° other sources (please specify).. $ . /OOO

15. Is your station approved to sell commercial announce­ ments based on experiments? yes no

16

least helpful source). 12 3 4 5 6 7 sponsor: . 12 3 4 5 6 7 sponsor: ^ 80 17 Besides those funding sources mentioned above, do you aerive any income from any of the following sources? It yes, please check as many as appropriate. 1 production and marketing programming 2 3 cable & subscription TV 4 co-production of programming.!!!!!!!!!!!! 5 foreign syndication !!.*!!!! 6 provision of teleconferencing services!!.' 7 sale of unused satellite time 8 rental of facilities !!! 9 sale of facilities !!!!!!!!!!!! provision of market and coverage 10 information provision of advertising 11 agency-like service 12 product merchandising 13 direct mail sweepstakes 14 book publishing licensing (royalty) 18 When you compare your station with others, are you supported by any special source not mentioned above?

yes , sponsor ,000 sponsor ,000

sponsor , $ ,000 no 19. How much revenue are you expecting for your station in FY 1986? $ ,000 20 Will you have any additional funding source not mentioned above for 1986?

yes , sponsor ,000 sponsor ,000

sponsor r $ ,000

no 21. Among the following sources, which ones do you think are long-range solutions for funding your station? Please circle. (7: the most important source, 1: the least important source) 81 subscribers 12 3 4 5 6 7 state governments 12 3 4 5 6 7 business 12 3 4 5 6 7 Corporation for Public Broadcasting 12 3 4 5 6 7 individual contributors 12 3 4 5 6 7 state colleges and universities 12 3 4 5 6 7 local governments 12 3 4 5 6 7 federal grants and contracts 12 3 4 5 6 7 foundations 12 3 4 5 6 7 private colleges and universities 12 3 4 5 6 7 auctions 12 3 4 5 6 7 other sources (please specify).. 12 3 4 5 6 7 12 3 4 5 6 7 22. Please write any information, advice, or special long-range planning your have, for funding of Public TV.

If you would like to know the results of this study, please let me know. Information would be available after June, 1986- Thank you very much.

Eunsoon Cho PERMISSION TO COPY

In presenting this thesis in partial fulfillment of the

requirements for a master's degree at Texas Tech University, I agree

that the Library and my major department shall make it freely avail­

able for research purposes. Permission to copy this thesis for

scholarly purposes may be granted by the Director of the Library or

my major professor. It is understood that any copying or publication

of this thesis for financial gain shall not be allowed without my

further written permission and that any user may be liable for copy­

right infringement.

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