The Price is Wrong
FRANK, REUVEN
On Television THE PRICE IS WRONG By Reuven Frank American commercial television as we know it began on May 1,1948. A half century later, it is going through the early stages of a typical...
...Consequently, as news operations become an increasingly small part of large companies, far above every editor's desk sits someone who decides if fighting constitutional battles will make sense to his shareholders...
...Thus, to save Thursdays NBC will more than double its payment over the next five seasons for what has been the evening's final program and the network's most popular drama, E.R...
...This May 14 will go down in the annals of TV as the day the widely heralded final episode of Seinfeld, NBC's hit comedy, was aired...
...Perhaps, as some say, it is the only way commercial TV can survive...
...No one will say how many...
...At that, the station would have to get the same rate for the minute preceding Seinfeld and the minute following if its weekly take is to approach $450,000...
...Independent Counsel Kenneth W. Starr has been subpoenaing notes and outtakes (film or pictures not used on the air) from newspapers and broadcast news organizations...
...That is why securities analysts wonder how commercial TV can remain profitable...
...In New York, WPIX has been paying $ 125,000 a year to show, at 11 P.M...
...Rupert Murdoch, lord of the Fox network and Fox News cable network, has famously let his business interests in China interfere with the presentation of information, in one case involving satellite TV, and in another the publishing house he owns...
...How can any single station recover $100 million from one rerun program...
...each evening, episodes of Seinfeld that had already been seen on the network long ago...
...But Seinfeld is the one the others have been waiting for...
...As audiences drift from stations and networks to cable, rented videos, and the World Wide Web, the few programs that continue to command high ratings are more valuable than ever...
...Stations balk, yet how else will they attract the local audiences they sell to their advertisers...
...Inevitably, the stations and networks will be devoured by media conglomerates...
...Sony, proprietor of Columbia Pictures, is a Japanese company and only American citizens may own broadcast stations...
...It is another one of those iron laws: When enough money is at stake, nothing else matters...
...Gambling the programs will still draw viewers, despite the fact that every episode will have been seen in New York at least six times, Fox will pay $300,000 a week for five years...
...So networks pay ever larger sums trying to hatch programs that will attract the biggest audiences possible...
...No station has ever paid that much money —almost $ 100 million—for an ex-network program...
...But signs of decline are manifest...
...Time-Warner, which includes Warner Brothers, owns CNN and other cable networks...
...at the center, the leadership is indulging itself as it awaits what it knows will be its final bacchanal...
...In the context of television this was revolutionary...
...On the Right and Left, self-selected watchdogs still sound their alarms...
...Since popular programs boost the ratings of the offerings that precede and follow them, losing Seinfeld threatened to drag down NBC's entire hugely profitable Thursday prime time lineup...
...To boot, challengers do not get much approval from a surly public that has grown openly hostile to the press...
...Why not now...
...The struggle over forcing news organizations to produce notes and outtakes has been a long one...
...Certainly such merging and acquiring is the tenor of the times...
...The talk about CBS is that it may sell its network to Sony, but not its stations...
...That would yield less than the $300,000 a week fee, not to mentionpaying for the station's payroll, overhead and equipment amortization...
...Disney already owns ABC and ESPN...
...A product looking for a mass market has nowhere else to go, even for audiences far smaller than in the days of the threenetwork monopoly...
...Tablecloth doodles in midtown restaurants postulate the Fox station, WNYW-TV, will sell five minutes of time in each episode, that is, ten 30-second commercials...
...It could be a cozy little world...
...Let the floodgates open," a major sales executive said to a trade newspaper when the WNYW deal was announced...
...They then bought them for prestige, for "clout," and because their stations needed them...
...It therefore bought five years' worth of those same Seinfeld episodes beginning March 2001, when the WPIX contract expires...
...TELEVISION'S NEWS outfits, for example, are becoming smaller and smaller parts of larger and larger organizations...
...Heads rolled...
...Tuesdays, where NBC has also been making lots of money, have depended in large part on the success of another comedy, Mad About You...
...Eventually the only thing worse for a network than owning TV rights to some athletic extravaganza became not owning them, and being submerged in the ratings by the networks that did...
...This started when competition forced the cost of rights to major sports events so high that networks could no longer make a profit from them...
...If owners are less prepared to give information priority over markets, they are similarly less inclined to defend their information in court...
...The subject first came to light when papers filed in open court revealed that a subpoena had been issued to ABC News...
...Given the rosiest audience expectations, it would take the daunting price of $7,500 each to come out ahead...
...NBC's owner...
...The pretense has become unnecessary...
...And that is only part of the cost...
...Not that it will disappear...
...We don't know that General Electric—a manufacturer, financial powerhouse, defense contractor, and river polluter—has ever interfered with a single news story, but it has been criticized for valuing NBC's news profits higher than its journalism...
...A side effect is the trouble coaches have maintaining authority over millionaire players, another uncomfortable parallel with television...
...A half century later, it is going through the early stages of a typical decline and fall: Entertainments are growing increasingly lavish and expenditures more extravagant...
...The price tag comes to almost $300 million annually for 22 original episodes plus repeats...
...Team owners reaped an incredible bonanza—until players organized to demand their share...
...Other series are doing almost as well...
...The situation is worse for individual stations, which also live by the advertising they sell...
...Neither Congress nor the audience demands it...
...When one makes it—usually not the one they expected—they pay whatever it takes to keep it...
...The founding generation, with its questionable claim that it served the public as well as itself, has cashed out and passed on...
...In the Review, Abrams charges Starr with creating "a secret body of law" by unleashing "an explosion of subpoenas...
...Commercial television stays alive because for advertisers the alternatives are too diffuse...
...Meanwhile, the Fox network's New York station had been having a bad year...
...The studios want guaranteed outlets for their products...
...Indeed, it is a measure of how far we have come from the '60s and '70s that one of the flagships was fourth in the Nielsens at 11 P.M...
...Early indications are promising...
...Today even those in the middle level of the National Basketball Association are paid in millions, and owners, though hardly impoverished, seek greater profits by hustling their teams from city to city in search of tax breaks, municipal funding for stadiums, and the freedom to lease luxury boxes to corporations that will declare them taxdeductible expenses...
...The rest is to be announced...
...Those who once saw the hand of the Politburo in every news report now accuse TV of covering up Vincent Foster's murder...
...And they did...
...The other networks, lacking NBC's huge profits, are even less able to resist demands from stars or producers of any show that resembles a hit...
...What's wrong with showing law enforcement agencies your notes...
...network ownership is falling like border provinces to corporate invaders...
...This is true...
...There remains, of course, commercial television's real problem: It has finally done overall what for years it has been doing in the case of sports coverage— priced itself out of its own market...
...A former chief counsel for the New York Times told the Review large corporations that today own news organizations are determined to increase their profits, and "pressing First Amendment rights can be very expensive...
...Lawyers who know, including First Amendment stalwart Floyd Abrams, reluctantly refuse to be specific because of confidentiality...
...At the other extreme, we are told Big Business owns the evening news and is slathering it with violence to warp young minds and distract everyone else from society's serious troubles...
...The consensus considers $5,000 a more realistic price for a 30-second commercial in 2001...
...Lawyers run up big bills...
...And who knows how many New Yorkers will, by the time the contract ends in March 2006, still want to watch a 15th or a 20th Seinfeld rerun...
...Both sides live by angry press releases bathed in indignant spittle...
...When its two stars, Paul Reiser and Helen Hunt, hinted they might not return in September unless each was paid a million dollars per episode, they got it...
...First Amendment issues almost always end up in court...
...An article in the current American Journalism Review raises a new and serious matter...
...Speculation and calculation inside advertising agencies and in broadcasting typify the dull, mundane realities of how TV really functions...
...General Electric, is rumored to be looking for a movie studio...
...So is ignoring the dangers lurking beneath the cheerful win-win veneer of perpetual optimism...
...Networks ask stations to help pay for events like NFL football and programs like E.R...
...As competition for local audiences keeps intensifying, prices will rise steadily, and commercial television's profit margins will keep narrowing...
...All this tumult concerns just one halfhour program as it moves from the network where it began into "syndication" —or selling its reruns to stations...
...These repeats draw larger audiences than the competing late local newscasts on the flagship stations of the three old networks...
...their meters click furiously throughout the invariably drawn-out proceedings...
...The sellers are now out flogging Spin City, Suddenly Susan, the animated King of the Hill, Cybill, Everybody loves Raymond, NewsRadio, and the Larry Sanders Show...
...You're citizens like the rest of us, their letters say...
...the networks demand to share in profits from the series they first broadcast, sometimes at significant risk, after they are "syndicated" to stations and cable networks...
...In the wake of its New York sale, Seinfeld has been able to exact premiums in city after city...
...Journalists feel— have learned—that when they are identified as sources providing information to the police, by any means, access to news and people involved in it shrivels...
...Something drastic was needed to build back audiences...
...Primarily for this reason they have always fought such demands hard and loud...
Vol. 81 • April 1998 • No. 5
