"Public" radio and television are industries that
illustrate well the interplay of outputs and mechanisms to finance
them. The collective goods aspects of their broadcast outputs are
unusually large; the process of production and distribution of programs
is such that the incremental costs of serving additional listeners
or viewers is essentially zero, and it is costly, though not impossible,
to limit consumer access.
These are the precise conditions of production under which financial
problems emerge. With user fees to listeners being infeasible, dependence
on contributions, gifts, and grants becomes great. When government
grants fall, as they have in recent years, public broadcasting has
pursued all of the principal finance options: It has moved aggressively
to expand private donations, and to increase revenues from each
of its two potential sources of sales -- user fees from advertisers
and "underwriters," and from ancillary services that are complements
of the broadcast process.
How has this activity affected public broadcasting's nonprofit mission?
In the United States, particularly, public broadcasting was founded
on the belief that the private market, while extensive, had failed
to provide certain kinds of outputs for which at least some people
were willing to pay. Thus public broadcasting's efforts to cultivate
private sources of funds, and the consequent implication that programming
will be of the type that appeals to those sources, suggests that
public broadcasting's mission must also change, whether by default
or by design.
Craig L. LaMay, Medill
School of Journalism, Northwestern University
Burton A. Weisbrod, Department of Economics, Northwestern
University
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