The Failure of Government Supported Television

by Shawn Ambwani

What can be successful and a complete failure at the same time? Simple, public television. Public television failed in its mission by attempting to juggle its economic realities.

The idea behind any government-supported endeavor is provide funding where there is market failure. Market failure occurs when capitalism does not provide the proper incentives to benefit a society. There are numerous examples where capitalism fails to create proper incentives: basic research, defense, and radio frequency assignment. For example, without the FCC, airwaves would be unusable. Unregulated airwaves would allow any entity to interfere with another's transmission. Combining two signals on the same frequency results in useless static. The ability for any one entity to disrupt everyone's ability to listen and transmit equated to extreme tyranny by the minority. Therefore, broadcasting requires a governmental body to assign and protect airwave rights in order for the airwaves to be useful for broadcast. The failure of the market to self-govern broadcast allocation is an example where market failure occurs and an institution must govern over all broadcasts for the market to exist.

Is there market failure in public television? And if yes, does market failure justify the need for government support?

The answer to both is yes. There is market failure that justifies future investment in public broadcast television. Insufficient incentives exist in TV broadcasting to benefit society. Even more surprising, government sponsorship should increase since the failure of the marketplace is likely to accelerate. Why, you ask? How can this be?

Simple, some individuals are not represented by commercial broadcast television. Advertisers do not market to these people. Consequently, television channels do not attempt to attract or program for this class. Even worse, this class of people is likely to become more alienated with society as programming is sent through cable systems. What class you ask? Minorities? Non-English speakers? The answer is neither.

It is the poor.

The poor are not "represented" in broadcast television. Although creating a significant portion of our population, no advertisers wants to market to them, therefore no network programs for them. They cannot afford cable because of the costs. The programming they do receive does not satisfy their needs. Spectrum scarcity limits the number of broadcast channels and gives incentives to those channels to market themselves toward the middle and upper class households. Currently, there are insufficient available channels to target the older rich. TV will never target the poor as long as there are some rich viewers that may switch to their channel. Or is there? We will get back to that point later.

I will assume (for the sake of argument) that government has a responsibility to sponsor programming to classes of individuals who would not receive it otherwise. The poor seem to clearly be one of the those classes. In an ideal world of no spectrum scarcity (such as the Internet) all viewers will have a channel specifically tailored to their tastes. In the real world where the government doles out free frequency licenses even though it is later sold for billions, the poor have no voice. Therefore, government should give incentives to broadcasters to program for the poor.

The government gives money to broadcasters, right? Yes, directly though grants and indirectly through frequency licenses.

The government should fund programming for the poor right? Yes, because of market failure they are the class of individuals least represented in programming.

But there are two problems that get in the way. First, that pesky thing called the first amendment. Broadcasters would yell from all the rooftops if they were forced to cater some of their programming to the underclass. The Supreme Court would likely agree with the broadcasters. Do not ask why, just accept it. Second, government does not adequately fund public television. By only giving twenty to thirty percent of the budget, government does not give public broadcasters an incentive to market toward the poor. What! Give more money to PBS and those liberals? The simple answer, YES.

Currently, PBS has no incentive to cater to toward the poor. In fact, of the networks, PBS has the oldest and richest viewers. In a perverse twist of fate, publicly supported television has become the most elite network on television. These "elite" viewers are the ones who can afford to receive cable programming. This has been exhibited in the number of PBS competitors now available on cable TV (Discovery, A&E, History, Biography).

Why is government (and consequently the public) supporting a channel which caters to a class of people that doesn't need catering (or does if you think about it)? Simple, PBS needs funding from private donors to make up for any shortfall from the government. Attracting donors is just like getting advertising. Donors will not contribute unless PBS programs something they like. Since most charitable donors are usually old, rich, liberals, it is not a stretch to see how PBS has changed its programming to suite these people. PBS has become very successful in its endeavor to satisfy these constituents. Programming that is boring and irrelevant to all but the most elite is now on PBS. Yes, PBS still has Sesame Street and Frontline. Nevertheless, compared to the overall programming, can we really say we are getting any bang for the buck? Yes, a couple hundred million dollars is nothing compared to the grand scheme of things. But is PBS using it's funding wisely to provide programming to people who otherwise wouldn't get it? Would Masterpiece Theater and Mystery end if PBS did not fund them? Maybe, maybe not. In the end, who cares. The real question is whether we should be funding Mystery when almost all people watching it could afford to pay for it on cable TV.

We, as a capitalist society, must wisely decide what to collectively fund. When we do decide there is a need for subsidization, there should be specific benchmarks that must be attained for an organization to keep that funding. In order to attain those benchmarks, we must give the proper incentives and funding to that organization. We have failed. By only giving a small amount of the overall budget to public television and forcing them to get the majority from donations, society forced them to cater to donors. By all measures, PBS has reached its viewership and budgetary benchmarks. The problem is they are the wrong benchmarks. Instead of programming to a class that needs public television, PBS programmed to a class it needed to survive. We are left at a crossroads. Fund or not to fund. This is a difficult question given the obvious market failure to program to the poor and our unwillingness to adequately fund this endeavor. Therefore, I end this essay (or rant) with a simple choice: Fund PBS so it works or don't fund it at all, because you can't do anything else and still have something worth saving.

But I am a reasonable mind, and reasonable minds might differ, so I invite your opinion.

Shawn Ambwani,, is a law and business school graduate in Northern California who does Internet and Media consulting.