New York's WNET Goes Multimedia

Station broadens base of revenue sources

THREE years ago, New York's public television station, Channel Thirteen (WNET), produced a series called "Art of the Western World." Station executives felt that it was an exceptional show, but the audience ratings were disappointing.

To the station's executives, the reason was clear: There wasn't enough money to promote the show.

"There is never enough money to support the shows like you think you should," says George Miles Jr., the chief operating officer of the station.

For WNET, tight funding is not unusual. Although the non-profit station finished the financial year ending in June 1992 with a cash surplus of $731,000, it walks a thin financial line. "We are always hanging over a cliff," Mr. Miles says.

The station felt the crunch last year when New York State cut the station's funding by $5 million. This forced the station to restructure, eliminating a level of management and firing 69 employees. The station also decided not to broadcast between the hours of 1 a.m. and 6 a.m. on weekends.

The financial vulnerability has also forced WNET to try to raise more long-term capital. Over the next three to five years, WNET will try to raise $65 million - $35 million for a permanent endowment for research and development, $15 million to upgrade facilities, and $15 million to provide a financial cushion for current activities. WNET has commitments of $30 million so far, but only $10 million in hand.

At the same time, the station has pulled back to look at its operations. "What we have said to ourselves is that we are no longer just a broadcast and production entity," Miles says. Now the station sees its future as a provider of programs in all forms of distribution or format.

For example, WNET's chairman, financier Henry Kravis, committed $5 million to set up a multimedia center at Thirteen. The station is planning to provide programming for some of the new technologies that are developing, such as interactive compact discs, which will marry television with the computer. Today, the bulk ($89.5 million) of WNET's expenditures is on programming and educational services, such as an institute to train teachers in new video technologies.

Only 10 to 15 hours a week of the station's output would be considered strictly local. "Local programming is pure expense unless you get someone to underwrite it," says Les Brown, a senior fellow at the Freedom Forum Media Studies Center and founder of Channels magazine.

Instead, much of the focus is on shows that will attract a national audience. Currently, the station produces about 35 percent of all the shows that are seen on prime-time public television. These are programs such as "Great Performances," "American Playhouse," and "The American Experience." They are also programs that are not likely to air on commercial networks. "If we were trying to compete against the commercial networks, we would be out of business. We offer an alternative to the networks," Miles sa ys.

Unfortunately, the alternative continues to appeal to a relatively small part of the viewing audience. Ten years ago, Thirteen had a 4 percent share of the metropolitan New York market. Today, it still has the same share.

"You can say that they held their own at a time when the commercial networks were losing [their] share [of viewers], or you can say, `Is this the best they can do?' " says Mr. Brown.

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