Shrinking Subscriber Base Putting Squeeze on KCET

KCET-TV Channel 28 opens its 15-day December pledge drive Sunday facing a harsh reality--a precipitous decline in new subscribers.

Al Jerome, president and general manager of Southern California’s flagship public television station, said that while additional gifts from existing members rose 9% and renewals went up 3% in fiscal 1996, the dollar amounts provided by new members as well as the actual number of new members dropped 26% from 1995.

Primarily because of that decline, the station fell $1.6 million short of its $17.9-million overall goal for subscriptions and contributions. In June, to help allay revenue losses, KCET laid off 11 employees and eliminated nine other positions.

Had it not been for a change in national accounting standards, KCET might have had to make other cuts in personnel or even in production to avoid finishing in the red, Jerome and Gary L. Ferrell, the station’s chief financial officer, said in interviews this week.

As Jerome explains to KCET’s 324,000 or so current subscribers in the station’s December program guide, the shortfall is not apparent in the bottom line. That’s because the Financial Accounting Standards Board, which affects all businesses, “required KCET to recognize [$3.8 million] in certain restricted revenue for productions. Without that adjustment,” he writes, “KCET would have shown a significant financial loss, the first in many years.”

That deficit would have been about $3 million. Instead, because of the accounting change, KCET finished in the black, with revenue of $51 million and expenses of $50.4 million.

Station executives recognize that, sooner or later, the lower revenue could catch up with them. One of the ways they hope to entice viewers into subscribing is by shortening pledge breaks. Gone this time will be the 20-minute program interruptions. Now the longest break will be 12 minutes.

While Jerome will not have a pre-taped pledge message, as he did during last spring’s special “countdown” campaign, he will occasionally come on live to talk to viewers about the membership crunch.

In the interview, Jerome pointed out that about 60% of viewers pay for cable--many of them shelling out more per month than they would for KCET’s annual base subscription fee of $40.

“If 60% of the people who watch KCET were subscribers, we would be in excellent shape,” he said.