Channel 9's outsized dreams, downsized reality

KCTS launches a bold digital broadcasting initiative. So why is the station going broke?

Next week, KCTS, Seattle's public television station, will "reorg" itself to embrace the future of broadcasting, according to station president and CEO Burnill F. Clark. The station has long prided itself on its leadership role in the development of digital television broadcasting, which is slowly succeeding the traditional analog method. In January, KCTS established a for-profit, wholly owned subsidiary, called Intris, for digital development, production, and planning; and in early April, penned alliances with WebTV and Microsoft, on the same day that PBS announced a nationwide pact with Intel.

See end of article for related links.

All of these moves give the impression that public television, which just yesterday seemed on the brink of collapse under Republican budget cutters in Congress, is robust, trendy, and ready for life on the cutting edge of the Digital Age.

That, at least, is the publicly disseminated gospel according to Clark. Privately, though, he tells colleagues that PBS is dying, that KCTS is in dire financial straits, and that up to two dozen KCTS employees will likely be laid off as early as next week.

A memo distributed to KCTS staff three weeks ago projects a 1998 operating deficit of $2 million to $3 million. Among the causes are federal budget cuts and new telecommunications legislation requiring all television broadcasters to begin transmitting on a new, high-definition, digital frequency within the next five years. That move alone, according to Barry Martin, who is leading KCTS's prestidigitization, will cost the station $18 million for new equipment.

Thus, while Clark is publicly trumpeting his station's bold digital vision, some station staff are labeling his initiative overaggressive, mismanaged, and expensive enough to cause the station's current budget crunch—which will cost many of them their jobs.

Clark rebuts that KCTS has been producing digital programming for 10 years. He expects that experience to get his station's new for-profit digital venture, Intris, off to a flying start. Barry Martin agrees, saying that Intris earnings—gained through marketing alliances with Microsoft and American Production Services (a local digital editing facility), and through service contracts with smaller public broadcasters and private television producers to help them make the transition to digital—will translate into profits for KCTS.

The alliance with Microsoft and WebTV, though, is risky. KCTS/Intris is making an early—and, some say, premature—bet that the current fight over digital broadcast standards between the computer industry and the broadcasting industry will be won by the computer companies. To date, television networks (with the possible exception of ABC) have lined up solidly behind "interlace" technology, which favors existing TV production equipment, while the computer industry is pushing a "progressive scan" standard, which favors computer displays over television sets.

Clark and Martin believe progressive scan will win, at least in the short term, because it will require less expenditure by viewers, who can receive progressive-scan broadcasts on standard Windows 98­equipped computers (which will enter the market this summer). Interlace technology, they argue, will force viewers to buy expensive new HDTV sets equipped with digital receivers.

This standards debate may prove beside the point: Internal station documents reveal that KCTS has far bigger problems. The station, for example, expects a $1 million shortfall in pledge support from its Canadian subscribers. Minutes from an April KCTS management meeting blame the remainder of the projected 1998 deficit on "production projects not bringing in enough revenue, or the projects being delayed." (Production costs account for roughly 40 percent of KCTS's $30 million annual expenses.) Notes from an earlier meeting, held in January, cite "a huge jump in the production figures" and "some accounting errors and losses on some projects."

Clark briefed the KCTS advisory board on the situation last week. "We're really just beginning to realize the extent of the problem," says one board member, who asked for anonymity. "I think we all were somewhat shocked. We're very concerned." KCTS staff have been aware of the situation since February. Clark recently established a toll-free hotline for staff members to anonymously record suggestions and complaints about management.

"They're going to completely wipe out the production arm of the station," says one station producer. "It's a failure to manage projects well. I guarantee you won't see one top manager eliminated.... It would be nice if the board were interested in hearing from other voices at the station. I would think they'd be trying to get past Burnie's [Clark's] bullshit and find out what's really going on. They're downsizing because other people at the station are not being held accountable."

A dire financial situation and palpable staff unrest notwithstanding, Clark insists that next week's layoffs and reorganization stem primarily from modernization. "The model that exists in most major production houses is that most of the capability resides outside rather than inside the company," he says. KCTS will likely rely more on independent producers contracted for single projects than on the permanent salaried staff the station currently carries. And as KCTS goes digital, more of its in-house production responsibilities will be taken over by Intris. "The real question that you have to wrestle with in public broadcasting is the move toward the studio model," Clark says.

He will brief KCTS's full board of directors on April 30 and announce station changes at a staff meeting scheduled for May 8.

Related Links and information:

KCTS site

www.kcts.org

PBS site

www.pbs.org

The Corporation for Public Broadcasting funding page

http://www.apts.org/ptvfunding/cpbfunding.html

 
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