Kid

Supply of Kids Educational Television

Last Updated Oct 5, 2008 10:41 AM

29. The Economics of kids's Educational Programming. As noted above, in enacting the CTA, Congress found that market forces were not sufficient to ensure that commercial stations would provide kids's educational and information programming. Congress concluded that the same problems that the Commission found in 1976 still existed and that market forces had not worked to increase the educational and information programming available to kids on commercial television.(75)

30. A number of factors explain the marketplace constraints on providing such programming. Over-the-air commercial broadcast television stations earn their revenues from the sale of advertising time. Revenues received from the sale of advertising depend on the size and the socio-demographic characteristics of the audience reached by the broadcaster's programming.(76) Broadcasters thus have a reduced economic incentive to promote kids's programming because kids's television audiences are smaller than general audiences.

31. Broadcasters have even less economic incentive to provide educational programs for kids. Educational programming generally must be targeted at segments of the child audience.(77) An educational program for kids aged 2-5, however, may well be of little interest to kids aged 6-11 or kids aged 12-17.(78) By contrast, an entertainment program for kids is more likely to appeal to a broader range of kids.(79) Thus the market for kids's educational television may be segmented by age in ways that do not characterize kids's entertainment programming or adult programming. Additionally, the adult audience is much larger than the child audience. There are 59.5 million kids in the television audience: 16.0 million kids aged 2-5, 22.2 million aged 6-11, and 21.3 million kids aged 12-17. Adults aged 18-49 number 122.2 million.(80) Because the adult audience is so much larger than the kids's audience, the potential advertising revenues are also much larger and therefore provide broadcasters with an incentive to focus on adult programming rather than kids's educational television programming. And within the category of kids's programming, broadcasters have an economic incentive to select entertainment programs that appeal to a broader range of kids rather than educational programs that appeal to a narrower group.

32. If stations are required to provide some educational programming for kids, we believe that the same incentives could cause station owners to prefer to show such programming when relatively few adults would likely be in the audience. For example, it is less costly for broadcasters to show kids's educational programs very early in the morning than to show them at later hours because the number of adult viewers lost, and hence the advertising revenues lost, will be relatively low. Hence, as discussed in Section IV and as shown in the charts in Appendix D, it is not surprising that a significant portion of kids's programming is currently aired before 7:00 a.m. and that few kids's programs are shown in prime time, which draws the largest adult audiences.

33. Furthermore, in the broadcasting marketplace it may be difficult for a small number of parents and others with strong demands for kids's educational programming to signal the intensity of their demand for such programming. In other retail markets, consumers can demonstrate the intensity of their preferences by the amount of money they spend, i.e., their dollar "votes." However, broadcasting rating services basically register only one "vote" per viewer.(81) But the signal that matters to the broadcaster is the dollar amount of advertising revenues. Small audiences with little buying power, such as kids's educational television audiences, are unlikely to be able to signal the intensity of their demand for such programming in the broadcasting market. Therefore, broadcasters will have little incentive to provide such programming because the small audiences and small resulting advertising revenues means that there will be a substantial cost to them (the so-called "opportunity cost") of forgoing larger revenues from other types of programs not shown.(82)

34. The combination of all these market forces consequently can create economic disincentives for commercial broadcasters with respect to educational programming. Broadcasters who desire to provide substantial kids's educational programming may face economic pressure not to do so because airing a substantial amount of educational programming may place that broadcaster at a competitive disadvantage compared to those who do very little. These and the other factors described above tend to lead to an underprovision of kids's educational and informational television programming, as Congress found in the CTA.

35. The amount of educational programming on broadcast television. A number of parties have submitted studies in this proceeding examining the amount of regularly scheduled, standard length educational programming aired on commercial television stations since passage of the CTA. In the NPRM we discussed several studies described below. We concluded that they provided insufficient evidence to permit us to determine whether the CTA and our existing rules had precipitated a significant increase in the amount of kids's educational programming aired on commercial television stations.(83) In particular, none of these studies permitted us accurately to determine what amount of programming specifically designed to educate and inform kids is currently being aired. Accordingly, we asked parties to provide us with additional information and studies documenting changes in the nature and amount of kids's programming. In so doing, we stated our intent to reassess the need for modification of our current kids's programming rules "if data were submitted that show that the educational and informational needs of kids are being met consistent with the goals of the CTA."(84)

See also Kid 617 1 - 7