I have a guilty pleasure to admit that will likely bring my libertarian credentials into question: I watch and listen to public broadcasting.
I’ve bonded particularly with their children’s programming because of my young son’s love for it. He adores shows like Daniel Tiger’s Neighborhood, Curious George, and all of the unique children’s programming offered by PBS.
Public broadcasting can survive privatization. In fact, it would likely thrive by monetizing their unique content.
My household is not alone in our enjoyment of PBS, NPR, or other products of public broadcasting. Millions of Americans tune into public broadcasting on a daily basis.
The size of this audience can be easily detected by the outpouring of support whenever defunding of public broadcasting is discussed. With Donald Trump in office, the caterwauling has resumed after a long period of quiet on the issue. We haven’t witnessed fervor like this since Mitt Romney’s so-called “war on Big Bird”. (As you’ll learn later, privatizing Sesame Street is one of the best things to ever happen to the show.)
However, most of this outrage is as misguided and shortsighted as it is shrill. The truth of the matter is that public broadcasting can survive privatization. In fact, it would likely thrive by monetizing their unique content.
This is evidenced by the drastically different paths taken by the two organizations that embody public broadcasting: NPR and PBS. One provider has been wheeling-and-dealing in an effort to cash in on its unique content, while the other clutches to its antiquated and costly distribution practices.
It’s a tale of two (soon-to-be-defunded) public broadcasting providers.
NPR Clings to Outdated Formula
In March 2016, Christopher Turpin, NPR’s vice president of news programming and operations, laid out a series of internal policies in a memo. Some of the policies demonstrated a troubling commitment to NPR’s dying business model.
Based on the rules outlined in these memos, show hosts are discouraged from promoting any NPR-branded podcasts. “We won’t tell people to actively download a podcast or where to find them,” reads the memo. “No mentions of npr.org, iTunes, Stitcher, NPR One, etc.”
NPR’s reluctance to embrace modern digital trends speaks volumes about its commitment (or lack thereof) to adjusting to market trends. “The ban was widely viewed as proof that NPR is less interested in reaching young listeners than in placating the managers of local member stations, who pay handsome fees to broadcast NPR shows and tend to react with suspicion when NPR promotes its efforts to distribute those shows digitally,” writes Slate’s Leon Neyfakh. (Neyfakh’s deep-dive into the wastefulness and antiquated nature of NPR is very insightful.)
As more and more people are jettisoning their radios for internet-based streaming content, this outdated formula is draining public broadcasting’s ability to innovate.
Even flagship shows like Morning Edition and All Things Considered, which generate more revenue for NPR via licensing fees than any other source of funding, have been shutout in the great digital conversion.
Member stations continue to oppose offering these shows as podcasts. Losing listeners and revenue to such digital disruption threatens the very existence of “legacy stations.” This is why representatives from member stations have worked hard to maintain a majority on NPR’s board of directors, so they could block any efforts to digitize.
In addition to outdated philosophy, the funding mechanism that supports NPR is also antiquated. The Public Broadcasting Act of 1967 codified the financial structure of the Corporation of Public Broadcasting (CPB), and not much has changed since it was signed into law by President Lyndon Johnson.
The majority of the funding established by the act—roughly 70 percent—was allocated not for content, but for maintaining a costly network of 1,100 regional stations across the country. CPB spends almost $100 million annually in “unrestricted” grants on existing radio infrastructure maintenance, community outreach, and other non-programming related expenses.
As more and more people are jettisoning their radios for internet-based streaming content, this outdated formula is draining public broadcasting’s ability to innovate. Defunding public broadcasting would incentivize the organization to invest in the server space necessary to compete in the digital economy or develop new programming.
PBS Is Embracing the Marketplace
On the other side of the equation stands PBS, which offers a successful model for transitioning public broadcasting to a private space.
PBS is far from perfect. The organization makes it unnecessarily difficult to syndicate new shows through their distribution networks. However, despite the current howling over privatizing public broadcasting, PBS has already trended in that direction.
The shift to online streaming video has helped PBS ink several deals with prominent online content providers.
Let’s return to the aforementioned “War on Big Bird” waged by Romney. It turns out that Big Bird’s home on Sesame Street was already on the verge of foreclosure long before Mitt could get his mitts on it. Around the same time the public was lambasting the former GOP frontrunner for threatening to defund PBS, Sesame Street was operating at a huge loss—nearly $11 million in 2014.
Then HBO came along. Already in the market to compete with Netflix and Amazon Prime for children’s programming, HBO secured a five-year deal with PBS that, according to Hollywood Reporter, allowed “the iconic kids’ franchise to deliver nearly twice as much new content per season.” The market saved Big Bird.
Markets have also embraced other children’s programming originally found on PBS.
The shift to online streaming video has helped PBS ink several deals with prominent online content providers. Amazon Prime netted the biggest deal with PBS, securing the rights to Daniel Tiger’s Neighborhood, Odd Squad, Wild Kratts, Dinosaur Train, Nature Cat, and Ready Jet Go. Curious George is exclusively streamed on Hulu, while Super Why! remains on Netflix.
Aside from children’s programming, adult content typically offered on public broadcasting has also moved online. Netflix streams several Ken Burns documentary series, including The Civil War, Prohibition, and The Roosevelts.
It is obvious that PBS is drastically ahead of the curve in comparison to NPR.
Netflix and Chill Out
The key to the transition of public broadcasting into the private sphere is an axiom familiar to marketers: content is king. When you produce thoughtful and entertaining content, consumers will knock down your doors to access it.
Consider the rise and fall and rise of Netflix. In 2011, Netflix almost struck a fatal, self-inflicted wound when they altered the pricing and availability of their mail-in and streaming services. In an awkward attempt to restructure, Netflix created Qwikster as a separate company to handle the mail-in DVD side of the business. Many subscribers felt slighted. As a result, nearly 800,000 customers unsubscribed, Netflix’s stock went into a nose dive, and Quikster got the ax. It suffered a more humiliating market defeat than Blockbuster.
Public broadcasting has the numbers to survive privatization.
In an effort to rebuild its brand, Netflix focused its energy on offering new and original content. Consider the quantity and quality of highly-acclaimed series that originated with Netflix: Orange is the New Black, House of Cards, Bloodline, Stranger Things, Black Mirror, The Crown, Narcos, etc. Netflix also worked to secure exclusive distribution rights to already established, popular shows like Peaky Binders.
In fact, Netflix is slated to spend nearly $6 billion in writing, producing, casting, and securing distribution for its unique selection of “Netflix Originals” in 2017.
This resilient comeback has bolstered Netflix’s subscriptions with over 75 million subscribers in 200 different countries.
If Netflix can bounce back, public broadcasting can easily survive privatization. Considering that PBS viewership is over 95 million and at least 23 million people tune into at least one NPR radio show per day—all dedicated consumers tuning into the unique content only available through their networks—public broadcasting has the numbers to survive privatization.
If public broadcasting organizations shifted all of their efforts to content development (branding the existing shows and creating new ones), and away from the costly upkeep of its regional stations, it is painfully apparent that the marketplace would support them.
NPR and PBS fans need to take a lesson from Netflix and chill out.
Got Amazon Prime, You Already Support Privatization
Even though I am a fan of the content available on public broadcasting, I would gladly support abolishing the CPB. I don’t expect my neighbors to pay for my entertainment.
Furthermore, considering the unique content already produced by these organizations, I have the utmost confidence that public broadcasting networks can continue to find success selling exclusive rights to their programming. Competition for selling publishing rights is robust, demonstrated by the availability of existing platforms to stream said content: Amazon Prime, Hulu, HBO, Netflix, Audible, Spotify, etc. Subscriptions to all of these platforms are extremely affordable and offer other perks. (If you haven’t experienced two-day shipping by Amazon Prime yet, you need to come out of the dark ages.)
So when I say I would gladly support public broadcasting after it is privatized with my own money, I mean it, because—as my subscriptions to many streaming services indicate—I am already doing so.
Now, if you’ll excuse me I’m going to fire up Amazon Prime so my kiddo can watch Daniel Tiger’s Neighborhood.