Hacker News Reader

Comment by derbOac | Hacker News Reader

One thing that's always been confusing to me is this:

I assume that Sesame Street must have received a significant amount of public funding over the years, from governments, while it was being broadcast on public television.

As such, it seems like there should be some kind of legal obligation to keep it public.

This is one of my pet peeves — when a project receives significant public funding and then it is just essentially reverted into an entirely private benefit. It shows up in a number of domains of activities (telecommunications, research grants, and so forth) and always seems to me that there should be significant legal consequences for not maintaining public benefit or access in some way.

I might be wrong in this particular case though — maybe the public funding was always indirect, through the broadcasters?

View on HN

> As such, it seems like there should be some kind of legal obligation to keep it public.

The challenge here is royalties. You have to pay people royalties for broadcasting their work. You could take the position that publicly funded media should be in the public domain, but then it's going to cost considerably more because you'll have to compensate people for the royalties they won't receive.

> I might be wrong in this particular case though — maybe the public funding was always indirect, through the broadcasters?

Yes, Sesame Street wasn't commissioned by PBS, it was originated by the Children's Television Workshop which was funded via grants (some from the state, but mainly by non-profits like the Carnegie Corporation). And originally it aired on the precursor to PBS (National Educational Television), which was funded by the Ford Foundation.

Nonprofit funding is, in significant measure, a form of public funding as the organization's income is not taxed and its donors receive a tax deduction.

If the public wants that credit, tax ‘em and pay for the programs. Otherwise I’ll give you the government didn’t discourage the effort.

By that logic, a pack of cigarettes taxed at 500% is "publicly funded" because it could have been taxed at 1000%.

There is no functional difference between a tax break and a subsidy. And everything is private property only if a sovereign authority says it is. Much of it is not even remotely justifiable even by the most generous Lockean assumptions. But it remains private property because an entity with the power to do so has deemed it so.

> everything is private property only if a sovereign authority says it is

This is simply untrue. Private property proceeds the existence of the modern state.

Many parts of the world have extremely weak states, yet a distinction between private and public property remains.

Arguably, the states role is to ensure private property protections are available to the weak and the powerful, not just the powerful.

“The commons” - in the European and British sense were/are public property long before a meaningful state became involved.

Both s public and private property proceed modern states, and can have their origin in customary law as much as legal statutes.

Sovereign authorities also precede the existence of states.

Claims of ownership are only as legitimate as the potential to do violence to assert such claims.

Authority isn’t always rooted in force or threat of force.

“The commons” is/was publicly owned, but without any real threat of force behind it.

The commons was managed in a decentralized manner, but indeed there were consequences for violating the written or unwritten rules.

And government was often involved in managing them historically.

Hence the poem:

>The law locks up the man or woman

Who steals the goose off the common

But leaves the greater villain loose

Who steals the common from the goose.

That's great. Here's it set to music.

https://mainlynorfolk.info/folk/songs/thegooseandthecommon.h...

and wikipedia on the Enclosure acts: https://en.wikipedia.org/wiki/Inclosure_Acts

> Private property proceeds the existence of the modern state.

Stop intimating that private and personal property are the same. Private property is enforcable only by coordinated violence. Its manifestations in the past (serfdom, slavery etc) have been universally agreed to be negative.

> Both s public and private property proceed modern states, and can have their origin in customary law as much as legal statutes.

You're still conflating personal and private property here.

Da comrade, even "your" life belongs to the state, and you should feel fortunate they permit you to keep it!

By that logic, your posting uses public funds. The government could have taxed your comments, but they didn't.

This presumes that all income belongs to the government by default, and not being taxed is some special favor.

That’s backwards, all income belongs to the people who earn it by default. We agree to use a portion for the common good to fund the government. Since a nonprofit is presumably already working for the common good, there is no reason to take any of their income to fund the government.

> You have to pay people royalties for broadcasting their work.

Might be a dumb question - but is this a contractual thing? Why do people still need to get royalties for broadcasts of something made 40 years ago vs just paying them for it back then?

>is this a contractual thing

Yes. In general the content owners (less often so actors, screenwriters, etc.) work on a combination of upfront fees and royalties. This is true of book authors as well who typically get an advance against royalties. Purchasers generally won't pay a fee commensurate with "if this is a big hit" so the content owners are willing to accept a smaller fee in exchange for a cut of the big hit proceeds--even if those often don't come about.

It’s similar to startups paying in stock and options. It allows for more speculative projects since the upfront cost is lower.

Yes, it's contractual because of copyright. If someone (and many parties in the process) created it back then, there is a web of copyrights that require royalties to the creators. Contracts would control who this obligation is owed to (if anyone) years later.

What? It has nothing to do with copyright. It's a provision negotiated by unions for the benefit of members which means you can't employ anyone in certain unions without a minimum royalty schedule.

Notably, live action productions covered under SAG-AFTRA and WGA get residuals while animated works under IATSE did not until very recently.

Sesame Street was developed by a 501c3 (Children’s Television Workshop renamed to Sesame Workshop) and sold to PBS. Episodes were licensed by a publicly funded organization, they weren’t produced by one.

Fascinating — but I'd be curious how much of the production was funded with those licensing fees. Maybe they're not legally obligated to keep it public — but ethically?

If I sell software to a government agency am I morally obligated to give up my copyright?

If you subsist entirely on grants and charitable donations and you yourself are a charity then I think it’s reasonable that your software should be open source.

There’s actually a push for all custom developed code for the US government be open sourced, even if produced by a contractor. Seems reasonable to me.

That is something that should be determined up front by the purchaser. If you want it to be open source, require it.

It isn't something to blame a vendor for several decades after you agree to a contract when you feel like you missed out.

I’m not blaming a vendor. I’m calling out how I think it is immoral. And I don’t donate to such vendors.

I understand why they do it as I like money too.

I think there is a big difference between donating to a for profit project and paying for a service.

There is also donating to something because you want a for profit service to exist as something to buy.

Laws (usually) reflect ethics.

Keep in mind there is a balance where the "ask" for receiving government funding may prevent the creation of the work in the first place.

Sometimes, the right balance may be to require the work to contractually enter the public domain in return for receiving funding. Sometimes, the government could negotiate something less than in order to get a net benefit.

Revenue from public television was used to fund new episodes. So the question is why it’s OK for public TV to have these kinds of arrangements not why Sesame Workshop can own it’s content.

Any way money can be extracted from a nonprofit to create private IP is dubious be that a University or public television.

How much should public funding be a taint to things it buys?

You can easily get to a point where public funding can’t buy anything and can only be used to produce things directly.

> How much should public funding be a taint to things it buys?

For higher education the rule is 100%, even when the funding isn't supposed to be buying anything in particular, or going to the organization which becomes attainted.

It's not aboung tainting what it buys, it’s about what it can pay for without owning. I have no issue with a nonprofit buying buildings, paying employees, or paying consultants market rates to design a logo it owns. You can value such transactions to verify people arn’t extracting money from a nonprofit this way.

However when it comes to creating IP that they don’t own it gets tricky because the IP owner also benefits from the exposure of being on public TV and can then turn that into toy sales etc. On the other hand if the IP flops then public TV has taken all the risk. In many other contexts having a nonprofit take in the risk while a for profit sees the profit is illigal. Just imagine doing this with startups rather than childrens TV shows.

The public isn't taking all the risk. The creator accepts a lower fee in exchange for the IP rights, commensurate to the future value of any spinoffs/merchandise, etc.

To be clear, Sesame Workshop is also a nonprofit so the risk is not so great.

However, how do you guarantee that public television or other none profit is actually getting a discount in such deals?

I don't. That's their job!

Not just their job, it can also be a requirement to qualify as a nonprofit which is my point.

This seems to be an argument for congress to change laws relating to non-profits?

Why are you bringing it up in the context of PBS negotiating licenses of Sesame Street?

PBS doesn't control congress, it's the other way around!

By can, I mean it already is a requirement under various existing rules in specific situations.

I don’t know the degree to which it applies in this specific situation.

Can you link or specify where this law is? Because I haven't heard of any that mandates such a requirement.

I don't understand the the objection. Public TV licensed content. If they wanted to own the IP, they should have bought the content.

What the revenue was used for is irrelevant. If I pay an employee a salary, I dont get part of their house. If I pay a Mcdonalds for a burger, I dont get shares of the corporation.

I think it’s because a non-profit receives tax subsidies in that donations are tax deductible and they don’t pay income tax and frequently pay reduced property tax.

If they make millions or billions from licensing to HBO then they don’t pay taxes on that. They can also distribute those gains to employees and management in the form of bonuses or featherbedding.

And they don’t pay taxes on the sale.

So it seems more like a tax dodge than just a moral argument that government shouldn’t fund private enterprises. Or at least claim that it’s for public good.

Thats just an argument that Non-profits should exist.

I think this misunderstands that the entire point of having a non-profit tax status is to create a tax dodge.

We want them to avoid taxes because we want to promote the products they generate.

>If they make millions or billions from licensing to HBO then they don’t pay taxes on that. They can also distribute those gains to employees and management in the form of bonuses or featherbedding.

Why should we care that they don't pay taxes? If they give it to employees, then they have to pay income tax at a much higher rate than a for profit would.

At the end of the day, the public wanted high quality educational content produced, we set up tax incentives to support it, and the content was made.

> Why should we care that they don't pay taxes? If they give it to employees, then they have to pay income tax at a much higher rate than a for profit would.

Can you provide a source for this? I'm not finding anything that suggests that an employee of a non-profit organization would be taxed at a higher rate than an employee of a for-profit organization.

That's not what I'm saying. I'm saying that lavish employe salaries are taxed more than for profit corporate profits.

But isn’t than an argument for not having corporations pay taxes? Or for letting revenue to corporations be tax deductible for consumers?

Why should the Sesame Street production company get tax benefits over any Hollywood production?

For profit companies can and do deduct employee taxes as a cost of business before calculating their corporate tax liability.

>Why should the Sesame Street production company get tax benefits over any Hollywood production?

Specifically because we decided as a society that we wanted to encourage companies making educational content and not Hollywood blockbusters.

There are strings attached to being a nonprofit. These include limits on employee compensation so that the CEO of a nonprofit can't take a billion dollar salary as a workaround for corporate profit. They have to be paid a salary that the IRS thinks is reasonable, and any excess Revenue made by the nonprofit has to go back into its beneficial purpose

Employee salaries and benefits (costs generally) not employee taxes.

But agree in general. US 501c3 status is based on a variety of things that the federal government has determined are worth encouraging--including education--that it has historically deemed the private sector was not sufficiently interested in funding. This in turn comes with strings. Which is not to say there aren't large and wealthy institutions that benefit from this status or that donors to those organizations don't benefit as well from certain tax benefits such as donating appreciated assets.

>Employee salaries and benefits (costs generally) not employee taxes.

Can you sign elaborate because I'm generally curious. I run a business and and my portion of employment taxes, and all of salary including their taxes, are discounted before corporate profit and taxes are calculated.

If this were not the case, I would be paying taxes while my bottom line is negative

I was thinking of the taxes that the employees pay. You're of course correct that employee costs--including salary, benefits, and the portion of their employment tax that the business pays are tax deductible business expenses.

The difference between subcontracting and embezzlement is the closeness of the relationship. If I receive public funds with the goal to advance public education and I use it to set up public schools, that is a valid pursuit of that goal. If I receive those same funds and use them as grants for private schools meeting specific goals, that can also be a valid pursuit of the goal. But I choose to direct those funds to private schools, and I sit on the board of some of those private schools, then that makes a strong case for it being embezzlement.

Where the close relationship comes from may differ. It may even be from trying to avoid conflicts of interest (e.g. an agency whose policy forbids holding assets, and therefore has been the sole funding of a nominally independent production company). Requiring publicly funded would to enter the public domain would be a way to prevent this entire class of misdeeds.

I don't think closeness or relationship really has anything to do with it.

A much simpler definition is if all the stakeholders were aware and consenting of the contract, and did you deliver on your obligations.

Are you insinuating that the producers of Sesame Street failed to deliver or tricked those purchasing the broadcast license

I am proposing that public TV has overpayed for Sesame Street. It can be illegal when a nonprofit does that when paying rent on a building, but it is more difficult to value IP transactions.

Sesame Workshop did nothing wrong, public TV did by agreeing to such a contract at the beginning of their relationship.

Why do you think public TV overpaid? If they didn't like the terms they could always not renew the license, and ultimately I guess they did.

Similar arrangements are quite common in the startup world were you invent something novel. You then make a second company with a license for a specific purpose and sell the second company with the license and retain the core IP. There's nothing fraudulent about it as long as the buyers know they're getting a license and not the core IP

“There’s nothing fraudulent as long as the buyers know they’e getting a license and not the core IP”

That’s making a lot of assumptions, imagine the CEO of IBM set up his own company which he the sold to IBM. That kind of transaction is just ripe for conflicts of interest.

Now to be clear Sesame Workshop is a nonprofit so this specific deal is less of a concern. However, public TV didn’t get the better end of this deal which is my concern as it demonstrates the obvious loophole.

> That’s making a lot of assumptions, imagine the CEO of IBM set up his own company which he the sold to IBM. That kind of transaction is just ripe for conflicts of interest.

But, that's not what is happening HERE, which is closer to IBM still contractually paying patent royalties to a former employee of the purchased company.

> not what happened HERE

Sure but it illustrates things are complex. My personal belief is PBS should at a minimum have gotten perpetual rights to the episodes inside the US for any purpose.

PS: IMO, toy sales is somewhat sketchy because the show acted like a commercial in the same way Transformers or My Little Pony did, but that's a different issue. Should they include shows with a toy line is more a question of their mission than how cost effective the deal is.

Why? Why should they have gotten priority rights? I don't think any network gets perpetual rights, so why should pbs?

Some do, Saturday Night Live is a similarly long running and prolific show owned by NBC.

As to why PBS should have negotiated, they where getting well over 100 new 1 hour episodes per year as PBS was also running a lot of reruns. I am not saying very young kids don’t deserve that much new content but PBS would have been better off owning fewer episodes they could rerun than paying for that deluge and then also paying to rerun episodes. It's one thing not to negotiate after year one, but by year 30?

In which year should they have renegotiated and how much of a premium should they have paid for total ownership? I think your argument is predicated on PBS being able to read the future and their partner being able to lose more control without the product suffering.

You changed my comment in your quote. You quoted me as having written, "not what happened HERE". But, I wrote, "that's not what is happening HERE" in present tense. This is currently happening, which is present tense.

> in a reply is a prompt not a quote

Though it can be used as a quote, it can also be adjusted to make a point as people can just look up. Anyway are talking about a 50 year relationship not just what happened recently.

>However, public TV didn’t get the better end of this deal which is my concern as it demonstrates the obvious loophole.

Why do you consider it a loophole? It seems like a clear win win in retrospect? They got decades of high quality licensed programing that they wanted.

Why do you think they didnt get the better end of the deal, or at least a good deal? Maybe they could have payed more for more rights, but that doesn't account for other shows where full rights are worthless. Should PBS have done the same for every show they contracted with where the IP ended up worthless?

Companies don't acquire every vendor or contractor they work with for good reason. There is a reason that Netflix or HBO dont buy perpetual IP to everything they air. You dont know what will be a winner or loser, so you pay less and license opposed to buy.

It is easy to armchair past decisions with future knowledge, but those making the decision didn't have that knowledge. You and I should have invested in apple, google, amazon, tesla, ect for pennies. however, we would be broke if we invested in every company that could be worth something.

Overpaid or hasn’t paid enough?

PBS has been licensing Sesame Street since before digital distribution was even a “thing” to put into a contract. PBS can certainly be licensing those rights now but they’d have to pay more, not less. They paid for the broadcast rights and still do.

There’s always been rights they’ve left to Childrens Workshop such as product licensing which subsidizes the production costs making PBS’s outlay less, not more. PBSs mission is to broadcast public interest programming that’s it. They license all their content similarly.

Let alone the fact that Children’s Workshop is a non-profit with public reporting requirements so it’s not like they have something to hide.

Seems like a working symbiotic relationship.

We can dig into past cash flows and argue about it, but I just want to a dress your final point.

An AIDS research nonprofit shouldn’t be handing lots of money to Wikipedia just because Wikipedia does good work. I think Childrens Workshop has done great things and they should be creating and licencing content for around the world. However, my point is simply PBS has it’s own mission and could have been a more effective steward of it’s funds.

This is a fine position to advocate for, but it’s not the way the licensing worked here.

No. Directing funds to a private school you are a board member of makes zero case for embezzlement. It doesn't even hint at it. It may be unethical, but you aren't stealing the funds but are you misappropriating them. As you said yourself if the funds go to a private school it is fine.

>I assume that Sesame Street must have received a significant amount of public funding over the years, from governments, while it was being broadcast on public television.

The Republican party has been battling to keep that significant amount of public funding as close to zero since PBS was founded. There was the famous Mr Rogers testimony in Washington DC (where the Corporation for Public Broadcasting managed to prevail) and there was the Gingrich era where the stated goal was to shut down CPB:

https://www.nytimes.com/1994/12/17/us/gingrich-foresees-a-wo...

If a creative work or research endeavor costs $10,000 to produce, and public grants provide $1, does that dollar buy the public unrestricted rights to the work?

It sounds like you think it should, which is a fine position to take, but odds are that the contributors of the other $9,999 have a different opinion and may make different choices about contributing were that the case.

So — assuming that the public can’t justify the entire production cost of all grant-worthy work — what ends up happening is that you have a negotiation of rights and contracts and lawyers and all that banal, complicating stuff.

That's a valid counterargument.

...if Sesame Street were 0.1% public funded.

What about 50%?

4% of Sesame Street's operating income is government funded: https://www.hollywoodreporter.com/news/general-news/sesame-s...

A more charitable view of the situation would be a requirement that any content which has taken public funding should always be able to be "reasonably accessed."

This allows private businesses to seek out solutions that are in their best interest, while also offering some protections to consumers. I don't see it as any different from the way we regulate other public utilities, like not allowing power companies to shut off service during the winter.

Note that I specifically used ambiguous language so that a wide range of uses for the content are possible. I don't necessarily have a problem with Sesame Street being behind a paywall, provided that the service isn't priced in an absurd manner.

This is good public policy thinking. At a minimum, if you want to take our tax dollars, you need to do _at least_ the bare minimum to benefit the public.

> Sesame Street must have received a significant amount of public funding over the years

You'd be surprised by how little it is. Most pbs and ctw funds are derived through nonprofit foundations and "viewers like you" (and corporate sponsorship), NPR likewise has relatively little government funding. A good chunk of what does wind up coming from government gets earmarked for things like rural media access.

While it's not zero, lots of things like science research, military weapons, get a much much bigger relative slice of their r&d funds from the public purse and still get to keep their IP.

Some segments and full episodes are free in the PBS Kids app on smart TVs. They appear to rotate over time, so I suspect there are rights issues involved. They may also not want to cannibalize viewing of local stations.

It is public. HBO pays just for exclusiveness for some time. You can still watch those lost episodes, PBS still had the right to distribute them. They’re not gone, just gone from HBO.

The Today, Explained podcast had an episode on Sesame Street a while ago, which got into how the show has been funded over the years and the compromises Children's Television Workshop has had to make. https://dcs.megaphone.fm/VMP1713252129.mp3

But does an obligation exist to stream it freely forever? Who pays hosting costs for that?

This is a great example of why neoliberalism is a scam. This is also true when a city or country begins to “privatize” it’s parks and fire department and water infrastructure, etc.

Public cost and private profit.

There's plenty of ideology sunglasses people wear to prevent themselves from seeing this.

It's hard to convince people of a reality wherein their identity demands them to oppose it.

HN has been more reasonable recently but there's still threads mobbed by Hayek and Rothbard partisans.

The giveaway is they have an unfalsifiable ideology. Bad results are because they didn't adhere enough, every problem has an identical solution, any purported tests aren't true tests, examples given aren't real examples so it can't be observed, it's just pure rhetorics and pseudo-intellectual dogma

Don't bother. It's team sports to them. See y'all in the replies with whataboutisms and personal attacks.

Reply on news.ycombinator.com