The cost of public broadcasting

Posted on 2013-10-28 by Garrett Wollman

One morning this past week, I spent some time listening to BBC Radio 4 “open up”. (It was actually yesterday evening for me, because I was listening live, and 0520 BST, when Radio 4 switches from relaying BBC World Service programming to domestic programs.) It reminded me that I’ve been meaning to write a comparison of how much other English-speaking countries spend on public broadcasting and how much we do. Radio 4 is the BBC’s flagship spoken-word radio service, and it compares most closely to the standard “NPR news and information” format on public radio stations in the U.S. But there are some rather striking differences, both in how they’re programmed and, more importantly, how and to what level they are funded, and I wanted to write a bit about this.

It is clear to even the most casual observer that the British spend vastly more than we do on public broadcasting in general. Each of the UK’s 25 million television households pays an annual “licence fee” of GBP 145.50 for the right to watch broadcast television, at least in theory. (There is obviously some cheating, but the enforcement is fairly effective.) All of this money goes to the BBC, although it is required to pass some of it on to other organizations. In 2012, the year for which I have information, the BBC also received a state grant of GBP 277 million to pay for the BBC World Service and BBC Monitoring, but in future years the licence fee will also pay for this. In addition, the BBC earns GBP 222 million from commercial services, the vast majority of which is from BBC Worldwide, the organization which licenses BBC branded merchandise globally and BBC content (primarily television series) in other countries. All told, in 2012 the BBC spent GBP 3606 million on “licence fee funded services”, including four national broadcast TV services, BBC News Channel, BBC Parliament, two children’s TV services, ten UK-wide radio services, six “nations/regions” radio services (two each in Wales, Scotland, and Northern Ireland), 40 local stations in England, and the BBC News Web site. At today’s exchange rate, that all works out to $5.828 billion.

Now let’s look at the US side for some overall top-line figures on public broadcasting. When the Public Broadcasting Act was passed in the late 1960s, public broadcasting of a sort already existed in many major cities, but large parts of the country were not covered. Public broadcasting at the time was operated primarily by universities and charities, although some states, cities, public libraries, and school districts operated stations (in some cases under commercial licenses). The first networks, like the Eastern Educational Network, had been set up as cooperatives, owned by the stations they served. Many of the local public broadcasters had started out leasing time on commercial radio stations for their programs, and many of the university-based stations were operated by the cooperative extension services at land-grant colleges. The whole public broadcasting arena was very fragmented, nothing you could properly call a “system”, and the commercial broadcasting interests wanted it to stay that way. The result was somewhat more organized, as the stations were encouraged to form national cooperatives and were provided with direct grants to pay for national programming. Grants were also available for states, existing broadcasters, and new (independent) organizations to start up stations and networks in those unserved areas (including whole states like Vermont, which did not get public radio until the late 1970s). But all this local independence comes at a great cost: there is no authority who can commission new programs for a national audience; instead, new programs must either be slotted into the format of an existing program (as with the PBS “Masterpiece”), or program producers must individually court each station — the cost of which is prohibitive for anything but a long-running, open-ended series. Hence the domination of the NPR schedule by news, talk, and music programs which are much the same every day for years on end, and the lack of significant change in the “national” PBS schedule over the course of years if not decades. And that’s how the commercial broadcasters wanted it. (It is instructive to compare this situation with that of the national religious broadcasters like EMF Broadcasting, which today operate multiple networks reaching nearly every market in the US, each with a single national program stream, and (nearly) all local stations owned and operated by a single corporate entity.)

It’s difficult to say exactly how much we spend on public broadcasting in the US, because of both organizational fragmentation and the wide variety of sources of funding. However, the Corporation for Public Broadcasting attempts to collect and collate this data, and its annual Public Broadcasting Revenue Reports are considered the best available information. The FY2011 report is the most recent available (covering October 2010 through September 2011), and it tells us that public broadcasting as a whole received $2.836 billion in total revenues, including government and private foundation grants, individual contributions, and advertising (referred to as “underwriting” in the US public-broadcasting world). Three million people gave an average of $130 to support public television, and slightly fewer than three million gave about the same amount, on average, to public radio. Public stations’ commercial activities brought in an additional $148 million. The federal government accounted for about 18% of total revenues, and all taxpayer funding amounted to 38% of the total.

So now that we have some numbers, let’s compare. Even with its much smaller population, the UK spends about twice as much on public broadcasting as the US does. It looks even more shameful if you compare the cost per television household. As I noted above, each UK television home is supposed to pay GBP 145.50 per year, and this income source funds nearly all of the BBC’s activities (radio and online as well as television). In US dollars at today’s exchange rate, that’s $235.18 — or more than $100 more than the typical voluntary contribution to a public broadcaster in the US. If you multiplied that by the actual number of television households in the US — Nielsen estimates that there are 115.6 million of us — that would be $27.2 billion, or 9.5 times what we currently spend, advertising included. (“And that’s why we can’t have nice things.”)

I started this post talking specifically about BBC Radio 4. Radio 4 and its digital companion Radio 4 Extra are available throughout the UK (and globally through the Internet, with some programs, mostly sports, excluded due to rights restrictions). It is considered a “spoken word” service, which is a broader remit than the news and talk shows that dominate most NPR stations’ schedules. (There is a separate talk and sport station, BBC Radio 5 Live, as well as a national commercial talk and sport station, TalkSport, both of which operate on AM frequencies that used to belong to the BBC’s nationwide music networks.) In addition to news and weather, Radio 4 commissions new documentaries, sitcoms, soap operas, radio plays, dramatic readings of books, game and quiz shows, and programs about science, history, travel, the arts, the law, and of course politics. Most programs (with the exception of ongoing news and public-affairs programs) are commissioned in series of 6 to 13 episodes; there’s no expectation that shows will run for an entire year, which gives program producers and commissioning editors much greater freedom to experiment with different concepts and formats. Yet popular programs endure, and come back for new series regularly, like the panel game “Just A Minute”, which has been running (with the same host) for 45 years — but not for 2340 weeks straight! Much of Radio 4’s content could never find a home on any NPR station (ignoring the question of nationality) unless it could somehow be packaged as a 50-week-a-year series, with special reruns for all the pledge drives, and carefully edited with local breaks for a standard NPR “hour” or “half-hour” time slot.

How much does all this variety cost, and how does it compare to the cost of our public radio? Looking at the BBC report, in 2012 Radio 4 spent GBP 88.1 million on “content”, 8.6 million on “distribution”, and 19.9 million on “infrastructure”. If we sum those up with the costs for Radio 4 Extra (a digital service which broadcasts mostly repeats of Radio 4 programs), it comes to GBP 124.1 million, or just under USD 201 million at today’s exchange rates. It would probably be fair to include some of the cost of the BBC’s Web services as well, since our public broadcasters also have important Web presences; for the whole of the BBC that comes to $186.4 million. By contrast, the CPB report tells us that public radio had revenues of $1.062 billion in FY2011, of which only 10.8% came from the federal government. Suddenly it looks like we’re getting a raw deal: while a large part of the cost of public radio is undoubtedly due to the sheer geographic size of the country — the BBC has (or rather, rents) far fewer transmitters for all of its stations combined than US public radio stations operate — a significant amount of waste is undoubtedly due to the fragmentation of the public radio system, with each local station having its own management, executives, boards of directors, local program hosts, board operators, advertising salespeople, community outreach coordinators, and so on. (EMF Broadcasting would truly be a more apples-to-apples comparison here.) “Local” isn’t necessarily better.

The BBC report tells us that Radio 4 costs GBP 0.012 per listener-hour. I don’t know where or how you would find or even estimate this number for public radio in the US.

By the way, I looked at annual reports for the CBC and the ABC, but unfortunately neither public broadcaster presents its numbers in a manner that is conducive to this analysis. Both are funded by a direct appropriation from their respective federal governments, and the CBC additionally sells advertising on its television services and its music-oriented radio services.

Comparing US public and religious broadcasters

I asked Scott Fybush to review this post before publication, and he suggested that I look at EMF Broadcasting’s financials, and compare them to a public broadcaster. In tax year 2011, EMF reported annual revenues of $112.9 million, and $77.1 million in expenses, including $22 million in salaries for its 399 employees. (Approximately 2500 people volunteer.) Operations and engineering for EMF amounted to $20.3 million, and “program service” expenses in total were $66.3 million. The highest paid employee was CEO Mike Novak, who pulled down $469,000 in total compensation. EMF gave out a $19,000 grant to another Christian charity, and funded a related organization, K-Love and Air1 Foundation, with about $5 million in capital. At the time of its 2011 IRS form 990, EMF had about $130 million in liabilities, including $64 million in mortgages on its station facilities and $60 million in tax-exempt bonds issued by the Colorado Educational and Cultural Facilities Authority and the town of Morrison, Colorado. (EMF’s corporate headquarters is in Rocklin, Calif., a suburb of Sacramento.) EMF reported net assets of $335.8 million, and its revenue per employee was $283,000 (net income per employee, $87,000).

By contrast, Vermont Public Radio also operates two 24-hour networks, mostly in the state of Vermont. (One VPR station, WOXR, is licensed to and transmits from New York, and VPR receives contributions from New York and New Hampshire residents in addition to Vermonters.) For the same tax year, VPR reported total revenues of $9.1 million, total expenses of $8.2 million, and salary expense of $3.8 million for its 101 employees. (VPR reported having exactly 173 volunteers.) VPR’s program service expense was $5.7 million, of which $895,000 was for program acquisition fees, although they don’t give a breakdown of NPR vs. PRI vs. APM programs. VPR had an endowment of $11.8 million, and net assets of $20.4 million, including real estate, physical plant, and equipment of $7.2 million; the network does not report any significant outstanding debts. In public support, VPR reported receiving advertising time from commercial broadcasters worth nearly $1 million; VPR also received less than $1 million in federal grants, and the rest of its public support came from private contributors and foundations. VPR’s highest-paid employee was its president, who made $144,000 in 2011. VPR’s total revenue per employee was $90,000 (net income per employee $8,300).

BBC Radio 4 program diversity vs. an NPR station

I wanted to provide a sampling of the sorts of programs that Radio 4 provides versus what is on the typical NPR station. I took VPR as my example of an NPR station, which may or may not be representative; you might also want to compare schedules at some big-city stations like KPCC, WNYC, and WBUR. Both schedules are for Friday, October 26, 2013.

VPR starts out its broadcast day at 6 AM with “Morning Edition”, NPR’s flagship national news and interview program, for three hours (starting with the second hour and taking one full “rollover”). After that is an hour of “Newshour”, a BBC World Service program distributed by PRI. “On Point” follows, a talk show from Boston’s WBUR, and then the local “Vermont Edition”, an hour-long topical call-in show. VPR goes back to the network for “Here & Now”, an NPR-distributed news/interview program also from WBUR, which used to be followed by an hour of “The Story with Dick Gordon” until that ended earlier this month. (VPR’s online schedule hasn’t been updated to reflect the end of the interview series, which was distributed by APM and produced by North Carolina Public Radio.) Next up is “Fresh Air”, the long-running Philadelphia-based interview show with Terry Gross; that’s followed by 2 1/2 hours of “All Things Considered”, NPR’s afternoon-drive news and interview program (“the other flagship”), and APM’s “Marketplace”, a business and finance show. “Vermont Edition” repeats at 7 PM, and it’s followed by three hours of “Friday Night Jazz” before joining the BBC World Service all-news service for North America (distributed by PRI) until the next day.

On BBC Radio 4, the day begins with the Shipping Forecast, a product of the UK Met Office intended primarily for mariners (who listen on Radio 4’s 198 kHz longwave service). Sometimes considered an example of “found poetry”, the Shipping Forecast is popular enough that the morning and late-night broadcasts are also heard on Radio 4’s primary FM transmitter network (which does not carry the midday version, heard on LW only). Next up is a 13-minute news briefing, followed by a two-minute “Prayer for the Day” given by a leader from one of the UK’s major religious organizations. “Farming Today” follows the prayer; it also runs for 13 minutes, and is then followed by “Tweet of the Day”, which is not a cross-promotion with Twitter (that would be considered advertising, which is forbidden by the BBC’s broadcasting license), but rather, recorded birdsong from a different species (found in the UK) every day. The “Today” program is Radio 4’s flagship news and interview program; it runs from 6 to 9 AM, and includes embedded subprograms “Thought for the Day”, “Yesterday in Parliament”, and “Sports Desk”. This particular Friday, “Today” is followed by “Desert Island Discs”, a long-running program where pretend castaways are asked to give and justify their choices for the musical selections that will accompany them on their exile. That runs for 45 minutes, and the hour is filled out with “Book of the Week”, a dramatic reading of selections from a different book each week, striped across all five weekdays. (This week’s book is Bonkers: My Life in Laughs, a memoir by comedian Jennifer Saunders.) At 10 AM, “Woman’s Hour” (which only runs 45 minutes) talks with Helen Clark, former prime minister of New Zealand, and that is followed by episode 10 of Gillespie and I, the “15 Minute Drama”. A half-hour documentary at 11 AM traces the history of the English Football Association, and that is followed by a half-hour sitcom about parenting, “The Gobetweenies”. Noontime is the consumer program “You & Yours”, which runs for 52 minutes and is followed by the amateur interview program “The Listening Project” for five minutes, and a three-minute weather forecast.

“The World at One” is Radio 4’s major midday news program, and it’s followed by a 15-minute documentary (this Friday it’s “Terror Through Time: Africa Erupts”, a look at the ANC’s internal debate over the legitimacy of terrorist tactics in the struggle to end apartheid). A repeat of the long-running soap opera “The Archers” follows (also 15 minutes), followed by a 45-minute episode of a drama series, “G.F. Newman’s The Corrupted”. At 3 PM, “Gardeners’ Question Time” runs for 45 minutes (in this episode, the panel visit Leicester University and Botanic Gardens), and the hour is filled out with the first episode of “Edinburgh Haunts”, a series of three newly-commissioned ghost stories set in the Scottish capital (this one by Val McDermid). “The Last Word” is a half-hour of obituaries, and it’s followed by “Feedback”, a program which responds to listener comments about the rest of Radio 4’s programming. That runs for 26 minutes, and is followed by another installment of “The Listening Project”, and then at 5 PM is “PM”, Radio 4’s hour-long evening news analysis program. The “Six O’Clock News” follows, and then series 41, episode 5 of “The Now Show”, a topical comedy and satire show that usually alternates in this time slot with “The News Quiz”. A fresh episode of “The Archers” follows, and then at 7:15 the arts program “Front Row” with Kirsty Lang runs for half an hour. “15 Minute Drama” repeats at 7:45, and the live-audience political discussion show “Any Questions?” follows at 8 PM. “A Point of View”, which the schedule describes only as “A weekly reflection on a topical issue”, runs for 10 minutes, and then at 9 PM, “Terror Through Time” returns with an omnibus edition of the week’s programs. It’s followed by a weather forecast, “The World Tonight”, a 45-minute global news analysis program, and then “Book at Bedtime” with episode 5 (of 15) from Donna Tartt’s The Goldfinch. Another literary program, “A Good Read”, has a rerun at 11:00, and it’s followed by “Today in Parliament” and more of “The Listening Project”, then the midnight news, a rerun of “Book of the Week”, and the late-night Shipping Forecast, before handing the reins over to the World Service for the overnight hours.

References

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