Public TV Plans Retailer Tie-Ins, Pledge-Gift DTV Boxes
Worried about possible erosion of viewership and membership revenue from a bungled DTV transition, public TV stations, especially in rural areas, are seeking a direct role in retailing or distributing DTV converter boxes. Station executives estimate that public TV could lose 10%-15% of its membership if their “loyal” viewers switch to cable or DBS because of a mismanaged transition. That’s because viewers would have more channel choices and less disposable income to contribute, they said. To head off problems, stations are proposing to distribute converter boxes as gifts for pledge contributions or membership incentives, they said.
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Public TV stations could lose $40-$50 million in membership contributions in the early years of the conversion, said Dennis Haarsager, gen. mgr. of Wash. stations KWSU Pullman and KTNW Richland. Like all broadcasters, public TV has been losing viewers, but increased contributions from individual members had helped offset the loss, he said. A large-scale switch to cable or satellite service would mean much less viewing for public TV, Haarsager said: “If you are drawing a viewer that has 6 channels into a universe of more than 200… that is definitely going to affect loyalty and amount of time they spend with any one channel.”
“What we need is some sort of retailer alliance” for the converter box program, said Steve Bass, pres. of Ore. Public Bcstg., a statewide network running 5 stations and 41 translators. Bass suggested that public TV work with retailers like RadioShack to ensure adequate stocks of boxes when stations direct people to get them. Stations like his that reach vast rural areas may even end up retailing the boxes themselves, he said: “Maybe we will sell them on the web.” Bass isn’t overly concerned about over-the-air viewers switching to cable or satellite, at least not in Ore., he said: “There is a reason that in Portland one-third of the homes are cable rejecters. These are people who consciously do not want cable.”
Another issue for stations is the timing of consumer education efforts. Some managements think it’s too early to launch education programs, but others said the conversion deadline for public broadcasters is only a budget cycle away. Haarsager said: “If we went out today and had a big campaign and people started heading to Circuit City, they would find virtually none of them [digital converter boxes] on the shelf.” He said he had no reason to believe that the NTIA would do any more than the bare minimum on consumer education: “They seem to be sticking with the letter of the law rather than seeing this as a big problem.” There’s going to be a huge consumer problem, he said: “People are going to be angry. They are going to take it out more on the station than on the government.”
Peter Morrill, gen. mgr. of Ida. Public TV (IDPTV), expressed “great concerns” about how the coupon program and consumer education policy would affect his network’s mostly rural viewers across the state. A state-owned network, IDPTV operates 5 transmitters and 38 translators. Ida. historically has had much lower cable and DBS penetration than the national average, he said. For instance, he said, in the Boise market more than 1/3 of viewers get their signals mainly over the air, he said. His network has begun promoting digital services and letting viewers know about the transition, he said, blaming commercial counterparts for not doing enough: “It would great if commercial stations took the same approach that we have done here.” Morrill suggested that more federal consumer education money be spent in rural states like Ida., where “over-the-air television is still the major way people get their media around the country.”
Julie Anderson, exec. dir. of S.D. Public Bcstg. (SDPB), said stations must have a role in the converter box program: “We have discussed the possibility of using them as pledge premium or membership incentives and or working with the NTIA or whomever in helping people get the coupon voucher program working here.” SDPB runs 9 full-power stations and 10 translators. Awareness of the conversion is “questionable” outside Sioux Falls and Rapid City, the 2 places that have electronics stores, she said: “Our rural folks are not going to have any place to go to get one.” She favored steering more federal money for consumer education to rural areas, Anderson said.
The threat to public TV membership from a badly managed transition is a “grave concern for us,” said APTS Pres. John Lawson. Stressing the importance of getting consumer education right, he said that if over-the-air viewers are forced to switch to cable or DBS, they would have less to contribute for public TV. Also with more viewing choices there would be competitive pressure on public TV viewership, he added. He said station proposals to play a role in the distribution and marketing of the converter boxes was a good idea. APTS has had “conversations” with several box vendors about marketing deals, he said: “We would also welcome similar discussions with retailers.” He said a public TV station tie-in with the NTIA coupon subsidy program was possible. APTS will compete for the $5 million set aside by NTIA for consumer education, he said: “We will provide some resources to stations. Whether it is cash or something else we are not sure.”