At PBS helm, Paula Kerger must seek solvency

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Paula Kerger's mission as the new chief of the Public Broadcasting Service is to give the endearing and endangered institution financial autonomy in a digital media world that desperately needs what PBS has to offer.

A 13-year veteran of New York's flagship PBS station WNET and the Educational Broadcasting Corp., Kerger has been driven her first three months on the job by high-energy intensity and an unspoken acceptance that PBS' rebirth or collapse could occur on her watch.

She is driven by knowing firsthand the value of a national public television connection to grassroots artists, culture, politics, and issues.

As if public TV station reticence, complex digital rights management, and chronic funding uncertainty weren't enough obstacles for PBS's new leader to overcome, last week the US House of Representatives voted to slash $189 million, or about one-third, of public broadcasting's 2007 funding request, with the intention of completely discontinuing support before decade's end.

Should those cuts be sustained by the Senate, the funding drop would keep at least 25 public TV stations from completing the government-mandated analog-to-digital conversion by the 2009 deadline, the overall cost of which to all public TV stations is $1.7 billion.

The cuts also would result in the elimination of crucial digital equipment and operating support for all of PBS's 356 affiliated TV stations, and of the Ready to Learn and Ready to Teach programs associated with PBS's children's content.

The only House appropriation proposal left is $380 million for Corporation for Public Broadcasting, the flow-through funding source for PBS, down about one-fifth from this year's $495.5 million.

Kerger is determined to push public broadcasting beyond survival on a wish and a prayer. The key is to develop new content to generate funds on digital broadband interactive platforms and devices that will more than offset the decline of federal support and make PBS more economically viable.

It also is crucial for public broadcasting to establish an interactive loop with consumers to manage free and fee-based content offerings, memberships and sponsorships.

The ability to access public broadcasting's unique branded content will be at the heart of retransmission negotiations between PBS affiliate stations and Comcast Corp. and other cable operators during the next several years.

"Public broadcasting has been chronically underfunded from the beginning," Kerger says. "It has struggled to do its best possible work with limited resources. It has effectively built public-private partnerships, leveraging federal funds out with philanthropy in our own communities, and looked for business partnerships.

"The dance we always do always brings us closer to the commercial line, which could become more of an issue. But we must increase the places where we can make our content accessible to consumers, and realize some of the new revenue from that which can help sustain us," she says.

With any luck, public outcry and organized pressure will prompt the Senate to restore the House's proposed cuts. One million protesting viewers last year pressured Congress to restore $200 million in funding.

In recent years, PBS has had to make cuts in its own budget, which totaled $532 million in fiscal 2005, 67 percent of which was supported by equal parts of program underwriting and station assessments. Educational product sales generate 10 percent of PBS's total revenue, royalties and license fees another 10 percent. CPB and federal grants contribute 13 percent.

By comparison, one-quarter of all of public broadcasting's more than $2 billion budget is anchored by subscriber pledges, with another 30 percent supported by equal parts of business sponsorship and CPB appropriations.

"There should always be a role for federal funding in public broadcasting. We are a hell of a good bargain for this country," Kerger says.

Although federal funding represents about 10 percent of PBS's annual budget, allocated through the CPB, it can represent as much as half of a station's revenue, which means some can be put out of business should the House cuts prevail.

Local membership funds can contribute up to half of a public TV station's revenue, a factor that has remained constant even in this time of widening viewing choices.

Sponsorship money generally is used to underwrite and be associated with the production of content like the timely documentary A Lion in the House, about children with cancer, which continue to shape and influence social policy.

"Even at a time of exploding media options, our stations are extraordinarily linked to their communities, and can tap into these powerful mission-driven programs to highlight local stories and needs in ways that are unique in this country," Kerger said.

PBS's fiscal 2007 strategic plan calls for the pursuit of "value chain initiatives" that include refining children's content priorities, developing multiplatform capabilities, building ownership of key content and rights, increasing use of new Internet formats, and building partnerships to leverage the PBS brand.

The strategic planning that Kerger is overseeing begs the ultimate question: Can public broadcasting survive and thrive in the digital world? New-media's consumer-supported business model is not much different from public broadcasting's long-standing membership pledges and corporate sponsorships.

Clearly, digital broadband interactivity is blurring the lines between the commercial and the noncommercial, and presenting legitimate new revenue streams for public broadcasting.

"My challenge is to get PBS to focus on the business opportunities, new revenue-generating opportunities, alongside the commercial broadcasters," Kerger says. "But we're taking our time and being thoughtful about what makes sense for our industry."

Those business partnerships include PBS's alliance with Comcast, Sesame Workshop, and HIT Entertainment in the budding digital cable/satellite channel PBS Kids Sprout, which bowed last year and is leading to other business opportunities including a cobranded credit card, a US postage stamp, gift cards, and more extensive merchandising.

The four-hour Frontline documentary "The Age of AIDS," first broadcast last month, is providing PBS with a possible template for the new era.

Some stations are rebroadcasting the documentary on their own multicast service. It also will be featured on PBS's national digital cable/satellite service this year. "Age of AIDS" also is a free video-on-demand offering on cable systems, and streaming for free on Frontline's Web site.

Public television's strategic plan calls for new-media initiatives far beyond its limited initial efforts, such as fee-based or sponsorship-based VOD and themed PBS archived program services.

Only The NewsHour With Jim Lehrer is podcast; only Frontline is streamed online; and only select PBS series such as Antiques Roadshow and Washington Week are free VOD offerings on cable.

PBS this year will begin offering select paid downloads of its extensive archived programs to iPods, MP3 players, and other portable digital devices, as well as abbreviated content for cell phones.

It will increasingly follow up on initial free program launches of programs on public TV with paid on-demand access of the same programs on various digital devices and platforms as well as DVDs. It also will seek sponsorship of streaming Web content from its library of evergreen programming that will follow existing broadcast models and standards, providing a source of new revenue.

"Finally, the technology has caught up with our mission," Kerger says. "If we can stay focused on that, and capitalize on it, then things will really get interesting."

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