Tornado Alley (PROG)

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Powder Dayz, Romney PBS cut promotes illiteracy and ignorance ..

The Government Should Support Public Television (PBS)

The slogan goes, “If PBS doesn’t do it, who will?” This catch-phrase, which PBS uses in spots to advertise its programming between shows, states the most basic reason that the Public Broadcasting Service is necessary: Many of the shows on PBS would not be successful via commercial broadcast television, and therefore, a viewer-supported, partially-subsidized network of stations is necessary to provide programming that otherwise would not make the airwaves.

In this paper, I will explain why public support is important, but not essential for the Public Broadcasting Service to fulfill its mission to provide alternative programming to the American public. I will show how public broadcasting would exist without the support of the federal government, and then explain why the positive externalities created by public broadcasting lead to market failure and suggest that government support of PBS is in the best interest of society.

In their 1995 attack of public broadcasting, newly-empowered conservative members of Congress argued that were the Public Broadcasting Service to fold due to lack of public subsidies, the private sector would provide same type of programming that PBS has provided. Their reasoning was that a demand for PBS-fare would still exist, so the private sector would supply programming that would meet the unfulfilled demand of former PBS viewers. Other members of the conservative contingent argued that government support amounted to less than 20 percent of the network’s operating budget, so the network could make up the difference or cut back its service in order to survive.

Part of their argument was that many of the programs on PBS are similar to programs available on various cable stations. “Sesame Street” and the line-up of children’s programming on PBS is similar to programming in the same time-slots on the Nickelodeon network. “Nova,” “National Geographic,” and other science programming resembles shows on TBS, TNT, and The Discovery Channel. “The Victory Garden” and “This Old House” parallel productions by Home and Garden Television (HGTV) and the A&E Network. New cable stations such as The Learning Channel and The History Channel seem to crop up on a daily basis, offering the same sort of fare that had previously been available from only PBS.

While a lot of similarities exist between cable programming and public broadcasting, the fact remains that cable television penetrates only 70 percent of American households. On the other hand, any locality within broadcast range of a PBS station--99 percent of American households, according to the Public Broadcasting Service web page1--can receive the network’s programming for free by putting the old rabbit ears on top of the television. Cable programming, like public television, is a public good because it is non-rival. Unlike broadcast television, however, cable TV is not non-excludable. Cable, therefore, is not a suitable replacement for public television as it would inaccessible to nearly 80 million Americans.

Let us assume for a moment that Congress had chosen not to contribute to the Corporation for Public Broadcasting. The Public Broadcasting Service, however, does not cease to function, but merely exist without a federal subsidy. PBS, then, loses the 18.5 percent of its funding from federal sources. Could PBS survive without its federal subsidy?

One scenario would be for PBS to make due with only $1.38 billion2. This might require the Service to cut some programs or for stations to remain on the air for fewer hours each day. PBS would remain, however, surviving on contributions and other means.

In this circumstance, PBS could try alternative sources of revenue. One solution could be for the Service to break its vow to remain commercial free and offer the opportunity to advertise on the network, if not during programs, then between them. Knowing that advertisers willingly advertise on cable networks with lower ratings than PBS3, $314 million could likely be found through advertising to make up for the federal government’s contribution. Under this scenario, however, PBS risks losing its independence as advertisers exert their influence on PBS’s choice in programming as if the network were commercial. As advertisements increase, PBS would see voluntary donations from “member” viewers diminish: Why should one contribute to PBS when Mobil Oil or Kellogg’s will pay for the service through their advertisement? Eventually, the battle between advertiser and doner support would be won by advertising, the network “selling out” and abdicating the viewers’ choice in programming to advertisers.

Another source of revenue might be labeled “Tickle Me Elmo” funding. In this instance, a percentage of the proceeds from products associated with PBS programs would be earmarked to support the network. This quickly becomes a sticky issue, however, when it is realized that rights to spin-off products aren’t necessarily held by PBS itself. In the case of Sesame Street products (which have probably proliferated more than any products associated with any other PBS show), the Childrens’ Television Workshop and Jim Henson Productions likely receive royalties, not PBS. And other shows, such as “This Old House” “Nova” and “Mystery!,” are produced by other broadcasters, like WGBH-TV in Boston, KQED-TV in Pittsburgh, and the British Broadcasting Company (BBC). Unless there were a special arrangement, the producers, not PBS, would receive royalties.

Even though advertising or product royalties would not be viable sources of funding for PBS, there are enough PBS doners to maintain the network with 80 percent of its former funds. PBS could survive under market-based allocation. But could the network succeed?

Likely, it would not succeed to the extent that it has flourished with a federal subsidy. At its current level of service, PBS programming creates positive externalities, which in turn make for a net societal benefit above and beyond its net private benefit. Without a federal subsidy, PBS officials would be forced to reduce the network’s level of service, leading to a reduction of the positive externalities produced by PBS.

Let us first compare the net private benefit provided by PBS and America’s most popular broadcast television network, NBC. We will measure the net private benefit of the two networks by comparing their ratings, the percentage of American households with televisions watching a given network over the course of a given time period. PBS has an average weekly prime-time rating of 2.2, compared with NBC’s weekly prime-time rating which generally soars over 10.0.

Now let us examine the net social benefit provided by the two networks. This includes both the net private benefit and the net external benefit provided by production and distribution of the two networks’ products.

This net social benefit of public television includes such gains as increased literacy through programs which seek to teach children and adults to read, increased school readiness in populations of young children through educational shows such as “Sesame Street” and “Mr. Rodgers’ Neighborhood,” better quality-of-life for those whose homes and gardens benefit from programs such as “This Old House” and “The Victory Garden,” increased awareness of politics, finance, and public affairs because of shows like “The McLaughlin Group,” “Wall $treet Week,” and “Newshour,” and increased appreciation of the natural world because of programs like “Nova” and “National Geographic,” among other external benefits provided by these and other programs.

NBC, on the other hand, provides external benefits with its news and public affairs programs such as “Today,” “Dateline,” “NBC Nightly News,” and “Meet the Press.” However, a news or public affairs program on NBC would have 14 minutes of commercials per hour, compared to merely two to four minutes on PBS. And beyond NBC’s news programs, there are few programs which serve the instructional and educational function served by shows on PBS.

Moreover, there are negative externalities caused by programming on broadcast networks such as NBC. Some have argued that increased rates of viewership of commercial television programs lead to bad things happening in society, including crime, teenage pregnancy, illiteracy, poverty, and obesity.

When its positive and negative externalities of viewership are factored together, it becomes apparent that commercial television likely does not have the net social benefits that public broadcasting does4. Therefore, it is essential that PBS exist at its current capacity in order to maximize the net social benefit provided by the network.

On the supply side, it is safe deduce that the cost of dedicating individual resources to benefit the Public Broadcasting Service matches the social cost--the cost of an individual’s best opportunity forgone in order to contribute to PBS and the disutility associated with contributing to PBS--as individuals give to PBS what they can afford in correlation with their perceived private benefit from public television.

Because of externalities, the demand curve of public broadcasting does not equal the marginal social costs and the market welfare hypothesis does not apply as the social optimality and market equilibrium cannot converge at a single point. The market fails to provide PBS services at the socially optimal amount, and government subsidies via the Corporation for Public Broadcasting are therefore necessary to ensure that PBS programming remains at its current level.

If PBS doesn’t do it, who will? Cable, yes, to a limited extent, but PBS will always reach a larger audience than an infinite number of cable networks with PBS-type programming. Without government support of the Corporation for Public Broadcasting and ultimately the Public Broadcasting Service itself, PBS would survive. Society, however, would suffer as the loss of one-fifth of the Service’s operating budget leads to cutbacks in programming and ultimately decreased positive external effects from the network. That’s why government intervention--an annual subsidy for PBS from the federal government--is so important: not because the network would disappear, but because it would fail to provide the socially optimal variety and quantity of programming.

http://www.123helpme.com/view.asp?id=22735

some sound points in opposition to Romney's cut the PBS subsidy .. good reasons to keep the subsidy, eh ..