WTTW - Shrinking Audience & Shrinking Budgets

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: At WTTW-TV/Channel 11, shrinking audience and budget woes force tough decisions : (Crain's) By: Lynne Marek June 21, 2010 : : WTTW-TV/Channel 11 CEO Daniel Schmidt blames a state funding cut for the station's decision to ax 12% of its staff this month. The Chicago PBS outlet faces a more fundamental problem, however: attracting viewers in a digital era that's bombarding them with options. : WTTW's monthly viewership has declined almost every year since 2005, dropping 12% over the period. The decline came as the station added three separate channels following a 2004 digital overhaul. : Dwindling revenue from viewers, sponsors and government sources, thanks partly to the recession, is forcing Mr. Schmidt and his peers at other PBS stations to cut spending, programming and employees at a time when they're also competing against everyone from the History Channel and HBO to Netflix and YouTube for the relatively affluent viewers who traditionally support public broadcasting. : Even with $3 million in savings from the cuts, which lowered expenses to $53 million, Mr. Schmidt is struggling to craft an annual budget for the coming fiscal year that doesn't lead to a second consecutive shortfall. His plan to attract more viewers and funds includes streaming more programming to WTTW's Web site and boosting the station's presence on the Comcast cable system. : "We are recognizing the need to go beyond television," Mr. Schmidt says. : Public TV "is not going to survive unless it reevaluates where it's going," says Lawrence Grossman, who sits on the Connecticut PBS station board and led PBS from 1976 to 1984 before becoming president of NBC News. : Since 2005, WTTW's monthly audience has shrunk to 2.2 million households from 2.5 million. Mr. Schmidt expects pledge revenue for the fiscal year ending this month will be down 16% and corporate sponsorship income will also see a double-digit drop. The station's parent, non-profit Window to the World Communications Inc., is expected to log a $4-million deficit for the year. While WTTW has a $28-million endowment, it's mainly for emergency spending. : Board Chairman Norman Bobins, who leads a pack of about 65 WTTW trustees, is determined to have the non-profit in better shape before it must start paying $21 million in debt coming due in 2014. : TOO CONSERVATIVE? : WTTW isn't the only public TV station stretching to make ends meet. The two biggest stations in the country, WGBH in Boston and WNET in New York, had bigger overall revenue declines last year than WTTW, the fifth-largest PBS station by revenue. WTTW's 8% drop in 2009 pledge revenue was slightly bigger than the estimated 7% for all stations combined. : Part of the problem is that stations have hunkered down and become too conservative, says Mr. Grossman, the Connecticut public TV board member who joined Chicagoan Newton Minow to create Digital Promise, a Washington, D.C., group backing digital technology use in the public interest. : "Many of the stations in the system have chief executives who've been there way too long, and often that lack of vision is a significant problem to the PBS station's survival," says Frank Liebert, who was a top producer at WTTW in the 1980s and is a consultant in the Chicago area. : 'PLATFORM AGNOSTIC' : Mr. Schmidt, who has led WTTW since 1998, wants the PBS outlet to become more "platform agnostic," as he puts it, reaching beyond its TV station and its WFMT-FM/98.7 classical-music radio affiliate to stream programming to the Web and handheld devices. It's also offering some programs through Comcast, free of charge for the marketing benefit, including an upcoming on-screen pledge request. : He contends that most of the recent employee cuts, mainly administrative and IT staffers, will be invisible to viewers, though one program, "The Friday Night Show," formerly hosted by the late John Callaway, has been cancelled. The 18 veterans who step up for early-retirement packages may yet have an impact on programming. The station is aiming to cut the workforce to 180. : The CEO is contributing by taking a second 5% pay cut this year, reducing his annual salary to $304,684. : Randy King, a former WTTW executive vice-president who left in 2005, faults the station's current leadership for not updating programming and financial strategies. The station has become too dependent on buying its viewers with giveaways during pledge drives instead of cultivating loyalty through local programming that viewers can't find elsewhere, he says. : "It's a model that has been the same way for many, many years, that needs to readjust," says Mr. King, who now co-leads two video consulting firms. : Mr. Bobins, the board chairman, agrees that local programming is key. The station had a record 2,500 pledge drive calls on June 7, the night it broadcast the premiere of "DuSable to Obama," a documentary about Chicago's black metropolis. WTTW's most popular regular shows are "Check, Please!" and "Chicago Tonight." : Still, the station has cut back significantly on local content over the past few years, including the decision to drop veteran local correspondent Rich Samuels, Mr. King notes. : Mr. Bobins knows the cutting can't continue forever. "We've made about as many cuts as we can really do without taking away the fabric," he says.

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