公共电视运营模式

DevelopingaSustainableEconomicModelforPublicTelevisionMay29,2003CONFIDENTIAL1PROJECTASPIRATIONSANDKEYQUESTIONSIdentifyanddrivemajorchangesthatwillputpublictelevisiononamoresoundeconomicfootingandensureitsfuturesuccessHowsevereandlonglastingarethefinancialpressuresonthesystem?Howshouldwelaunchtheseinitiativesandeffectlastingchange?Whichperformanceimprovementopportunitiesofferthemostpromise?2CHALLENGES:BOTHSTATIONECONOMIESANDPROGRAMDEVELOPMENTAREAT-RISK*Excludescapitalfundingfordigitalupgrade.Revenuesnotadjustedforinflation**Growthratefrom1994-2001Source:CPBAuditedFinancialReports(AFR),PBSanalysis(dues),AppendixQfromPBSSGwhitepaper(“FundingforPBSNPSProgrammingbyFunderCategory”)$1.93Billion$450Million2001LocalStationEconomy2001NationalProgramFundingProspectsforfuturerevenuegrowth3.5%peryear*3.1%peryear**Historicalgrowthinrevenues(1990-2001)CurrentsizeDeclineinrealtermsduetofallingnetmemberrevenuesAsystemdecision5.4%peryearFlattoveryslowlygrowing(1%aboveinflation)2001StationAssessment$107M3273.3374.0249.4328.5230.5330.5205.6347.6128.6259.6104.2145.662.994.5TotalPTVsystemrevenue,*1990and2001$MillionsUniversityIn-kindCorporateandfoundationgivingUnrelatedbusinessStateandlocalfundingFederalfunding**Membergiving*Excludescapitalfundingfordigitalupgrade,additionalcapitalfundraising,endowment,andinterest**Federalagencygrantsfor2001areestimated(assumed5%growthover2000)Source:AFR;federalreports;PBSannualreports$1.25billion$1.88billionCHALLENGES:ONLYGROWTHAREASAREUNRELATEDBUSINESSANDUNDERWRITING199020013.83.16.64.93.32.9AnnualGrowth%1990-20012.5Driversofgrowth4PeriodFlatordecliningsource(s)Compensatingsource(s)1992-1994CPBappropriationStateandlocalgovernmentUnderwriting1995-1996CPBappropriationStateandlocalgovernmentNetmemberrevenueUnderwriting1996-1998CPBappropriationStateandlocalgovernment1999-2000NetmemberrevenueCPBappropriationStateandlocalgovernmentUnderwriting2000-2002NetmemberrevenueUnderwritingCPBappropriation2003-NetmemberrevenueUnderwritingStateandlocalfundingCPBapproprationnoneCHALLENGES:HISTORICALLY,THESYSTEMHASGROWNTHROUGHDIVERSIFICATION–NOWALLREVENUESOURCESARETHREATENEDSource:AFRs;TeamperspectiveFutureOutlook5CHALLENGES:NETSTATIONMEMBERSHIPREVENUEHASDECLINEDINREALTERMSSINCE1990*Allgrowthratesarecompoundannualgrowthrates.Source:AFRs;BureauofLaborStatistics050100150200250300350400450199019911992199319941995199619971998199920002001Fundraisingcosts:1.0%Netmembershiprevenues:-0.9%$17millionlostincome$Millions,Adjustedforinflationtoconstant2001$Grossrevenues:0.1%*6CHALLENGES:DECLINESWILLCONTINUEINNETMEMBERSUPPORTPledge,whichistheengineofnewmemberacquisition,hasseenrisingcostsrelativetonewmemberyieldinlinewithdecliningproductivitytrendsoutsidePTVNetrenewalrevenuewillnotoffsetdecliningacquisition•Stationsalreadyhaveamongthenonprofitsector’shighestrenewalrates•Renewalmail’sproductivityisflattodeclining•Decliningratingsincreasestations’challengeFallingratingslikelycontributetothelongtermmembershipdecline,bothbecausetheprospectpoolwithaconnectiontoPTVshrinksandbecausemembershiprenewalishighlycorrelatedwithaudienceWiththenumberofnonprofitsgrowingtwiceasfastasrealhouseholdcharitablegiving,stationswillbehardpressedtogrowtheirshareofmembers’walletsSource:“DonorCentricsComparisonReportforPublicTelevision,December2000;”DMAFactbook2001;GivingUSA2002AudienceSizeNewMemberRenewingMemberPhilanthropicEnvironmentMembershipRevenueDriversOutlook742.57.316.514.811.45.32.2CHALLENGES:STATIONHAVEMETTHESECHALLENGESINTHEPASTBYCONTROLLINGCOSTSACROSSTHEBOARD1990UnderwritingPrograminformationFundraisingManagementandgeneralBroadcastingProgrammingandproduction100%=$1.80billion7.93.33.83.14.03.8*ExpensesdonotincludeCPBorPBSoverheadorCPBprovidednonstationgrantsSource:AFR;PBSannualreport,2001AnnualGrowthRate1990-2001Stationsexpense,1990and2001Percent41.97.516.216.011.45.71.4100%=$1.19billion2001NPSduesandservices4.0Nearly1/3ofstationprogrammingandproductioncostsareconcentratedinproducingstationsfornationalprogramming83,1572,7186693283151,1569151,5031,3152,1201,8524534088668661,0612001Actual2010IllustrativeBroadcastopsMembershipEduc./outreachOtherCHALLENGES:REVENUEDECREASESWILLPROMPTREPEATEDPAINFULCOSTREDUCTIONSSource:SABS;interviewsStationcost-cuttingscenario:15%revenuelossAcquisition&schedulingProg.productionGeneral&administrative$10.7millionUnderwritingWebsite76•Reduceheadcountby26%,from80to59•Cutlocalproductionbudgetby40%,reducingannuallocallyproducedhoursfrom109to65•EliminatetheProgramGuide•Maintainorslightlydecreaseinvestmentinwebsiteandeducation76$9.1millionIllustrativeexpensebudgetforanaveragemedium/largecommunitystation100%=9CHALLENGES:CAPITALINVESTMENTSMAYFURTHERREDUCEAVAILABLEFUNDING•Only$800millionoftheestimated$1.7billiongoalhasbeenraisedDigitalConversion•Plansaretoreplacecurrentinfrastructureby2006usingCPB’s$177millionappropriationrequestSource:CPB;APTSDigitalClearinghouse;PBSestimatesNextGenerationInterconnectDigitalMediaNewServicesPlannedcapitalinvestmentsPotentialstrategicinvestments•Bringi