10/13/09

CAN PUBLIC BROADCASTERS HARM COMPETITION AND DIVERSITY?

This is not trick question and it is being increasingly asked as public broadcasters grow larger, offer multiple channels, move into cross-media operations, and increasingly commercialize their operations.

The Federal Communications Commission will have to consider that question shortly when it considers the effort of WGBH Education Foundation—operator of WGBH-TV, the highly successful Boston-based public service broadcaster—to purchase the commercial radio station WCRB-FM.

WGBH is the top ranked member of the Public Broadcasting Service in the New England and produces about one third of PBS’ programming. It operates a second Boston television station, WGBX-TV, and WGBY in Springfield, Massachusetts. In addition it operates FM radio stations WGBH (Boston), WCAI (Woods Hole), WZAI (Brewster), and WNAN (Nantucket) and is a member of National Public Radio and Public Radio International. It operates two commercial subsidiaries involved in music rights and motion picture production.

This month it announced it was planning to purchase WCRB-FM, a classical music station that serves the Boston area. The purchase would allow it to alter its WGBH-FM format to compete more directly with WBUR-FM, the leading public radio station in Boston that is operated by Boston University.

WGBH Educational Foundation is an enterprise with $580 million in assets and revenues of $280 million annually. It has more than 600 employees who are paid more than $50,000 annually and has 5 paid more than $225,000. Its president and CEO is paid about $340,000 and 2 vice presidents about $250,000 annually. This is not a small, poor charitable enterprise.

Were WGBH a commercial broadcaster, those who hate big media would be howling in protest, arguing that it puts far too much control of the airwave in the hands of one organization and that the concentration will create market power that harms competition. But they are strangely silent.

However, in deciding whether to permit the purchase, the FCC will have to consider whether the expansion of the public broadcaster harms competitors and plurality and diversity.

Similar questions are being asked elsewhere as well. Across the pond, the British Broadcasting Corp. has recently been the target of a good deal of criticism because of its increasingly commercialized operations and because its expansion of public service operations in TV, Radio, and Internet at the local, national, and international level are seen as affecting commercial firms and competition.

The BBC is one of the largest broadcasting companies in the world, operating on revenues of £4.7 billon ($7.4 billion) and it has assets of £1.5 billion ($2.4 billion).

Many commercial broadcasters and publishers in the U.K. have criticized the growth of the BBC operations and the debate became especially heated recently when James Murdoch, the News Corp. head in Europe and Asia, made a public speech charging the BBC was engaging in a “land grab” and that its ambitions were “chilling.”

“The expansion of state-sponsored journalism is a threat to the plurality and independence of news provision, which are so important for our democracy," Murdoch told the Edinburgh International Television Festival. Whether you agree with him or not, you have to give him credit for co-opting the language of critics of big commercial media.

News Corp. and the other commercial firms competing with the BBC obviously have self interests at heart, and some commercial firms have certainly behaved in ways that harmed public interests in the past, but their arguments should not be casually dismissed.

If competition among commercial firms, between commercial and non-commercial firms, and among non-commercial firms is good for pluralism and diversity, cannot concentration and reductions in sources of news and entertainment due to acts of large not-for-profit firms also harm competition, pluralism and diversity?

4 comments:

Anonymous said...

If there were a market for what public broadcasting provides, you might have a point. Rarely do I find commercial broadcasters coming close to providing the same services. As a commercial and public media consumer and a taxpayer, I am pleased with the products of each and each is compensated either when I buy products, make a pledge or pay taxes. Your mention of Murdock and the word "journalism" are in and of themselves contradictions in terms. Nothing Murdock owns is involved in journalism regardless of his claims to the contrary. His speech about the BBC is simply a tactic to eliminate any possible competition given his aim to control all media with his goal to do nothing but amass his wealth while degrading the content of media and a democratic culture along with it. Read your history about him. Every person, action and event has a context.

Anonymous said...

See Also: http://www.business2.com.au/2009/10/rupert-murdoch-rants/
A few opening paragraphs by a free-marketeer:
Rupert Murdoch has been throwing off protectionist rants of late to pretty much anybody that will listen. On the one hand I admire the guy for building an empire and embracing the digital era, but on the other hand I wonder if he is losing his marbles.
In case you have not read my some previous articles about current day media moguls, I will repeat it here for you. Having a market share or a semi monopoly is a privilege not a right and this privilege/right is not exclusive, if you cannot adapt simply move on!
Rant One – Public Broadcasting
Rupert rolled out his son James on centre stage to deliver the MacTaggart lecture at the Edinburgh International Television Festival and launched into the BBC with an argument whose motives were was so transparent that the majority of comment outside his own networks were a collective ‘rolling of the eyes’ .

Your welcome.

Steve Masiclat said...

I don't claim to have as sublime an understanding of the issues as Dr. Picard, but. . .

It seems to me that the net effect of WGBH's actions is to remove available ad inventory from the various listening areas. Shouldn't this have a positive effect on ad rates at the remaining commercial stations?

Certainly this is a separate (perhaps too finely parsed) issue from audience fragmentation, but smaller and more meticulously striated audiences are the reality in a digital and on-demand world. Addressing these niches is the best means to properly valuate remaining ad inventory. All the media players will have to deal with it.

Paul said...

I don't understand how the addition of a formerly commercial station WCRB-FM to the holdings of non-profit WGBH-TV constitutes a chilling "commercialization of their operation?" Haven't they transformed this station into a non-commercial entity? Does capitalizing on an opportunity always have to be depicted as an evil force destroying our freedoms and plurality?