Taxpayers subsidize premium content streaming app for PBS

The Public Broadcasting System’s inclusion of a premium access service on its digital streaming app is stirring debate about whether government funding gives it an unfair advantage in the streaming wars.

PBS’s streaming app offers current events programs like “PBS News Hour” and “Frontline” free of charge — and its separate PBS Kids app also offers all of its children’s programming, including “Sesame Street,” without fees.

But PBS Passport offers commercial-free access to full seasons of its most popular dramatic shows, like “Call the Midwife,” for viewers who donate at least $5 monthly or $60 a year to most local stations. That “member benefit” appears to mirror the basic “subscription plan” that Discovery+ sells for $4.99 a month to watch similar public-interest programming with commercials.  

Michael Warder, principal of the California-based Warder Consultancy which provides financial services to corporations and nonprofits, said Thursday that PBS’s entry in December 2015 into the members-only streaming world has made it “a prime candidate for elimination” from annual congressional funding.

The former vice-chancellor of Pepperdine University said it’s hard to justify taxpayers funding digital entertainment with the national debt exceeding $30 trillion.

“With the advent of cable TV, the internet and other means of communication since PBS was founded in 1969, the U.S. taxpayer is funding the equivalent of horse and buggy transportation,” Mr. Warder said.

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“It is time to spin it off and let it stand or fall on its own as a nonprofit,” he added.

Conservatives have long pushed to end the annual congressional allocation that has funded the Corporation for Public Broadcasting (CPB) since 1968.

By federal statute, the CPB distributes taxpayer money from the allocation directly to locally owned and operated stations affiliated with PBS, National Public Radio and other public media entities.  

The CPB did not respond on Thursday to a request for comment.

But its website says it received $465 million in federal appropriations for 2022. That included $232.79 million in “direct grants to local public television stations,” $77.97 million in “television programming grants” and grants spent on radio stations and administrative costs.

Eleanor Hawkins, PBS senior director for external communications and media relations, told the Washington Times in an email that PBS Passport launched in 2015 “as an added member benefit from local stations” and that it “is not a subscription service.”  

“That is to say, if you make a donation to your local station, you will receive access to a digital, on-demand library of PBS content,” Ms. Hawkins said in the email.

Because PBS includes the service for viewers who are already donors, it does not track what share of donations come from people seeking only digital access to its programs.

It also does not track overall subscriber numbers because they’re tied to the separate finances of more than 350 local stations.

But Ms. Hawkins said the federal investment in PBS amounts to $1.40 for every American taxpayer — and for every dollar of federal funding, PBS raises an additional $6 from viewer donations and private grants.

“PBS has the ability to reach more people than commercial competitors, especially those in underserved communities with little access to broadband or cable,” Ms. Hawkins said in her email.

Angelica Gianchandani, who teaches business at the University of New Haven, said the streaming app gives PBS “an innovative way” to bring its on-demand library of programs to a “younger generation” of potential donors.

“As an organization, PBS has leveraged technology and digital content to create new revenue streams to drive its donor base,” Ms. Gianchandani said.

More Generation X viewers pay for TV and streaming services than older Americans, she added.

“It is an attractive offer with ease of flexibility, device compatibility, low cost, personalization and no commercials,” she said.

Some economists believe that gives PBS an unfair advantage over private competitors.

“PBS is now charging extra fees for premium content it generates at taxpayer expense,” said Walter Block, who teaches economics at Loyola University New Orleans.

“That in and of itself is illicit [because] the people already paid for this information [and] they ought not to be made to pay for it a second time,” Mr. Block told The Times.

Daniel Lacalle, chief economist for Tressis financial services in Spain, said it’s also problematic because of the “political bias and lack of independence” that creeps into government-funding media.

“It is virtually impossible for a government to fund a truly independent and ethical media enterprise,” Mr. Lacalle said.

“It is even more challenging to accept that a taxpayer-funded media service should charge for premium content. It is a double tax,” he added.

Mr. Lacalle cited a “crowding out effect” that arises from public sector companies accessing government money at lower rates than the private sector, giving them more access to funds and credit in better conditions than the private sector.

That lets them absorb credit that could go to private businesses, creating a potentially unfair advantage in years of crisis or tight credit markets.

Some congressional Republicans have made perennial efforts to defund the Corporation for Public Broadcasting.

Rep. Doug Lamborn, Colorado Republican, has introduced bills for more than a decade to remove taxpayer funding from PBS and NPR.

On May 20, he filed H.R. 3411 in the current legislative session to amend the Communications Act of 1934 to prohibit federal funding for the Corporation for Public Broadcasting after the fiscal year 2023.

“It’s time for Big Bird to earn his wings and learn to fly on his own,” Mr. Lamborn has said.

The bill, which the Energy and Commerce Committee referred one day later to a subcommittee, is unlikely to reach a vote in the Democratic-controlled House.

In 2011, the GOP-controlled House passed Mr. Lamborn’s legislation along party lines but it died in the Democratic-controlled Senate.

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