The Newtorks' Fight for Survival
FRANK, REUVEN
On Television THE NETWORKSFIGHT FOR SURVIVAL By Reuven Frank It is hard to remember when the springtime ritual of the television networks announcing their upcoming entertainment...
...The eponymous character had been an ensemble member on Cheers, a sitcom about the regular clientele of a Boston saloon that was the anchor of an earlier NBC moneymaking Thursday night...
...This is merely one of many signs that institutional changes in American television, manifest to insiders for more than a decade, are becoming common currency...
...through their stations they reaped big profits from local advertising...
...The networks objected that this slighted their substantial investment in developing programs, including those not considered in the end good enough to broadcast...
...Expansion, he thinks, would water down the program and threaten its integrity...
...News magazines are not just cheaper than dramas or comedies...
...Newspapers tended to concentrate on which serial comedy NBC would nominate to replace Seinfeld in anchoring its enormously profitable Thursday night lineup...
...Most of these have affiliations with a network, but as the networks' interests and those of the stations they do not own keep diverging, networks will inevitably undergo institutional change...
...But the cards are against him...
...For big news the magazine could displace one of its reports, so long as it wasn't one that had been noisily promoted...
...Five magazines a week would cut the prime time hours a network must fill from 22 to 17...
...There is a rule of thumb that the compensation paid to stations for carrying network programs can range from as little as 5 per cent of the cash flow of a successful station in a major market to folly half for a small station...
...Then came the 1996 Act...
...plus c'est la même chose...
...Newspapers would bemoan the end of another era, evoke Edward R. Murrow and interview Walter Cronkite...
...The consequent network financial involvement in programs has reached the point where frozen out independent producers have charged it has become the prime reason some programs are scheduled...
...The 1996 Telecommunications Act encouraged the process...
...One of the biggest recent business stories about the television industry concerned the networks' dealing themselves into the production process, or at least into a share of its profits...
...Last year, every network-owned station group earned at least a billion dollars in gross revenues...
...NextNovember 1, for example, two dozen network-owned stations in 10 cities will begin the digital broadcasts required by the new high-definition television sets...
...This limits ownership not to a number of stations, but to reaching a maximum of 3 5 per cent of the population...
...Only CBS has made no change...
...The measure barred networks—then only three—from owning any entertainment programs they broadcast or making money from their rental to stations (and later to other outlets, among them cable or direct satellite broadcast) after the original exposure...
...After weeks of the usual gossipy speculation, the nod went to Frasier, a sitcom featuring a Seattle psychologist who does a radio call-in show...
...Fox and the two small networks do not pay compensation...
...Affiliates are bound to networks by money...
...In the beginning, having inherited radio's institutional structure, TV networks obliged affiliates to carry all of their programs or risk—horrors!—disaffiliation...
...Fox and two small ones, WB and UPN, hatched by Warner Brothers and United Paramount—are modifying their relationship with the Federal government, with their affiliates and with audiences...
...Manufacturers plan to have the HDTV sets, with their pictures of startling size and clarity, on the market by then, selling for as much as $12,000...
...That balance has been disturbed by technology: by cable and satellites and videotape, by ever better and cheaper equipment, and above all by the Internet...
...In response, the six networks—the original three...
...As the role of the networks in news changes, so does the role of news in the networks...
...This costs each of the three old networks about $200 million a year...
...NBC, for similar budgetary reasons, made an even more complicated arrangement with its affiliates...
...Dateline NBC will expand from four programs a week to five...
...Before it was passed, no network—or anyone else—could own more than five VHF and two UHF (channel numbers above 14) stations...
...NBC, having passed up the NFL because of the enormously increased cost, turned around and made its own commitment to stratospheric payments by agreeing to up its outlay for the top medical series, ER, from $2 million to $ 13 million per episode...
...The slot used for the evening news could be returned to the stations for Hard Copy or The Jerry Springer Show or a similar monument of contemporary culture...
...The new law set off a buying spree that is not yet over...
...NBC with 13 stations and ABC with 10 both stand at about 25 per cent...
...ABC is still negotiating...
...It is a complicated formula that has them forgoing some of the compensation they would ordinarily receive, and also returning to the network some commercial time they used to sell locally on such programs as CBS This Morning...
...The television industry—networks, stations, movie studios, news divisions, stars—functioned in equilibrium for about a third of a century, until roughly the middle '80s...
...Fox, with 24 stations, reaches its full 35 per cent...
...But there was little news about other programs, even new ones...
...At the top level they benefited from the programs they developed...
...Popular network shows enable them to jack up the charges for adjacent commercials and, more important, elevate the ratings of their entire schedules...
...Each of the major networks has known this problem...
...That was disallowed three decades ago, when the Federal Communications Commission (FCC) promulgated its financial interest and syndication rule...
...Today, facing shrinking audiences for broadcast TV and a probable decline in revenue, networks are looking to cast off their reliance on affiliates and turning to the stations they own for profits...
...With the rise of CNN and then other all-news cable services, networks' primacy in news has dwindled...
...Each of the big three had stations in New York, Los Angeles, Chicago, and two other cities, plus the UHFs...
...ABC, meanwhile, made a huge payment for the game it airs on Monday Night Football, at least partly on behalf of its cable systems...
...Another industry change, meaningful primarily to insiders yet widely reported, has taken place between networks and their affiliated stations...
...Their effect has been to break the nearmonopoly that networks once held, and to dimmish the attendant profits...
...Should some oldtimer object, an executive could point to the magazine and say, "I thought you guys always wanted an hour long newscast every night...
...Finally, in 1995, as expanding choices and shifting audiences made talk of monopoly or triopoly moot, the FCC withdrew the rule...
...To keep its stations happy (indeed, it said, to keep them at all), CBS will bring back professional football this fall—at a cost of $4 billion over eight years...
...On Television THE NETWORKSFIGHT FOR SURVIVAL By Reuven Frank It is hard to remember when the springtime ritual of the television networks announcing their upcoming entertainment schedules aroused less excitement than it did this year...
...This was clear, but generally ignored, when the program schedules were announced in May...
...CBS with 18, 31 per cent...
...Networks suffering declining audiences lose affiliates as the stronger ones in key cities desert them for their more successful rivals, and they are forced to take on weaker outlets—weaker in established local reputation, even in signal strength...
...Hewitt has more clout than most producers because the program he invented became the most profitable, in any category, in network television history...
...NBC experienced it in the late '70s under Fred Silverman, and more recently CBS was hit by it when the National Football League (NFL) found a greener field elsewhere...
...Instead, there were business stories on the shifting TV landscape...
...Moreover, this seems likely to remain the case in the new millennium...
...Once Federal finger-wagging modified this, network executives had to coax hard to get some programs the national distribution they required to attract advertising...
...CBS paid what it did for pro football hoping to boost its 18 stations, and they have been trumpeting the "return of the NFL" ever since...
...They are no longer turned to for bulletins, and have fewer viewers than they used to for major events...
...Furthermore, if it ran a magazine each weekday evening at 10 P.M., a network could jettison the evening news...
...Technical advances will continue and will impose additional changes...
...The Chicago Tribune's 18 reach a quarter of the country, Gannett's 21 about one-sixth, and so forth...
...They openly want to increase 60 Minutes from once a week to at least twice, but Don Hewitt, its creator, is opposed to the idea...
...Part OF THAT will occur in their news divisions...
...Of equal interest to the stations, naturally, is being relieved of the trouble and expense of providing their own programs...
...From space adventures to Presidents dying or resigning, TV was the agora where Americans shared history...
...They agitated noisily for the repeal of what was known in the trade as the "finsyn" rule...
...People who study such things already postulate the initial buyers will be young male technophiles earning S75,000 a year, the kind who want to be first on their block, or in their gated community, with impressive new gadgets...
...If history serves, they will be inundated with neighbors coming to watch who will eat their popcorn, drink their beer and grind potato chips into their carpeting...
...The biggest owners in terms of available audience are, as you might expect, the networks...
...It felt constrained to meet the price to retain its Thursday night domination after Seinfeld's departure...
...Their desperate piecemeal adjustments are part of an ongoing fight for survival that may well be more newsworthy than anything currently being broadcast from high towers and faraway satellites, or transmitted through copper wires and glass filaments...
...Where 60 Minutes pioneered, a parade of imitators holds forth, even if they may be less fussy about journalistic standards...
...Network news programs are now judged like other programs, and on that basis the news magazine is king—cost-efficient, popular, attractive to viewers under 49...
...Now CBS has worked out an arrangement whereby its affiliates will help pay for the NFL games...
...ABC is merging PrimeTime Live into 20/20, to be shown three times a week, almost certainly four after Monday Night Football ends its season...
...There are other owners of large groups of stations...
...Instead, the magazine might open with three minutes of the day's events, like the morning programs, then do its business for the rest of the hour...
...It will be interesting to see how long he can hold out...
...Few in the industry, or among advertisers and viewers, paid much attention...
...Networks also need them because there are no longer enough writers and directors and comedians and designers and other creative types to fill schedules...
Vol. 81 • June 1998 • No. 7
