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If public television starts running commercials, is it still public television?

The people at KCET-TV Channel 28 in Hollywood think so, although they wouldn't use the word "commercial" to describe the 30-second corporate messages that have been running at the station since September 1995.

But it's hard to come up with a better word for them, especially considering that KCET now has a rate card listing the prices charged to advertisers to buy time on the station.

Last week, KCET and the Public Broadcasting Service held their second annual "PBS Premiere" event at the Four Seasons Hotel in Beverly Hills. The gala evening, with live music, cocktails, dinner and a presentation emceed by "Entertainment Tonight" host Bob Goen, was intended to screen clips from upcoming offerings on the station to local advertising agency executives, hoping to convince them to buy spots on KCET for their clients.

Did we mention that KCET is a public television station?

That public television stations are doing things that would have been considered unthinkable a decade ago is a function not so much of changes in public TV, but in the general television landscape.

Two years ago, the future of public television was very much in doubt. A contingent in Congress considered cutting or eliminating the federal grants that make public TV possible.

Lawmakers argued that because of cable, public TV is no longer necessary. The same educational shows, nature documentaries and British costume dramas that have been PBS's bread and butter for decades can now be seen on A & E; and The Discovery Channel.

PBS eventually got its funding. But the battle was a reminder that continued federal dollars isn't necessarily a sure bet, and it prompted the board of directors at PBS to change the organization's rules on promotional spots for corporate sponsors.

Starting last June, PBS, a non-profit group that supplies programming to local public stations like KCET, began allowing "brand" messages. Before, a company that paid a sponsorship fee for a given PBS program was allowed a 15-second plug in which it could mention only its corporate identity. Sponsors can now give the brand name of their products or divisions; for example, if H.F. Ahmanson & Co. sponsored a PBS show, it could now do so under the name Home Savings of America.

At KCET, station officials began relaxing the rules even earlier. In September 1995 it started allowing companies to buy 30-second spots that would run before its programming, even if the advertiser wasn't an official sponsor of the program. In other words, it began allowing commercials although commercials with heavy restrictions.

The Federal Communications Commission forbids public TV stations from running spots that constitute a "hard sell"; they can't use qualitative or competitive language, they can't contain price information, and they can't contain a "call to action" for consumers to buy a given product.

Of course, there is a boatload of image or brand advertising that fits within these guidelines. Just about any commercial for Nike, to name an example, would likely be allowed.

Despite the new rules, KCET suffered through hard times last year. The station laid off 11 employees and cut an additional nine jobs in June (the end of its fiscal year), after it fell $1.6 million short of its $22 million goal for memberships and contributions.

Meanwhile, the 30-second "corporate messages" between programs at KCET brought in $500,000 last fiscal year. And station spokeswoman Barbara Goen (the sister of Bob Goen) said the spots should generate more than that this year, although she declined to give a projected dollar figure.

She also declined to give the station's set rates for the 30-second spots.

"All public television stations are realizing that they really must be more entrepreneurial in terms of expanding their funding base," Goen said.

Events like last week's PBS Premiere reflect the fact that companies are changing their approach to public television sponsorship. Whereas these funds used to come from a company's philanthropic budget, they now come from its advertising or marketing budget, Goen said. So it has become more important to reach advertising decision-makers.

In February, KCET completed a survey of its members intended to gauge their reaction to the corporate messages.

"Members and viewers understand the need to broaden our funding base, and to explore new ways of raising money," Goen said. "Having said that, they were very particular about the kinds of spots they want to see on our air."

In general, viewers don't want to see the kind of hard-sell commercials already forbidden by the FCC. And they definitely don't want commercial breaks in the middle of programming, something Goen said KCET has no intention of allowing.

With all of that, why should advertisers buy time on the station?

Media buyers say that despite its low ratings, KCET does reach a highly desirable audience demographic, with most viewers meeting high educational and income standards. Further, the 30-second time slots tend to be cheaper than similar blocks on commercial television.

"It's a decent buy, I can't find fault with it," said William Croasdale, president of the national broadcast division of media buying firm Western International Media. "The biggest problem most of us have with it is you can't get your commercials within the shows, and there are only certain kinds of spots allowed."

Croasdale said public TV spots are not in high demand by advertisers. But if the rules keep eroding, that may change.

"As federal funding dries up, I think all of public broadcasting has to look at other income sources," Croasdale said. "Slowly but surely, they're lowering the bars."

Los Angeles Business Journal staff reporter Dan Turner covers the marketing, entertainment and media industries.

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