Shrinking audience and budget woes force tough decisions for Chicago public broadcaster

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.