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  • Nielsen
  • FCC as of June 30, 2004
  • FCC as of June 30, 2004

Television Presentation Transcript

  • 1. THE U.S. TELEVISION INDUSTRY Professor Miriam A. Smith San Francisco State University
  • 2. The U.S. Television Industry Overview and Current Issues
  • 3. U.S. Television Audience
    • Population
      • - about 300 million
    • Percentage of Households with TV
      • 98% (Nielsen Media Research 1998)
    • TV Households
      • 112.8 million (Jan 2008)
  • 4. TV Ownership
    • More than one TV
      • 82% of total households in U.S.
    • 1 TV
      • 18% of total households
    • 3 or more TV’s
      • 52% of total households
    • 99% have color television
    • 85% have a VCR
  • 5. Dual TV Broadcast System
    • Large Commercial (Private) Sector
      • Advertiser supported
    • Much Smaller Public Sector
  • 6. Television Delivery Options
    • Broadcast
      • Free-over-the air
    • Cable
    • Satellite
    • Internet
    • Mobile
  • 7. Cable & Satellite
    • Cable
      • 64% of total U.S. households -- basic cable
      • 96.6% of TV households passed by cable
    • Satellite
      • 22% of total U.S. households -- DBS
  • 8. Other Options
    • Remote Control
      • 93% of total U.S. households
    • VCR
      • 85% of total U.S. households
    • DVR
    • VOD
  • 9. Commercial Broadcast Television
    • National
      • 5 networks
    • Local
      • 1,752 local broadcast stations
      • (1,566 digital)
  • 10. National Networks
    • ABC, CBS, NBC
    • Fox
    • CW (WB, UPN merger)
    • Combined have a 58% market share
  • 11. Public Broadcasting
    • 1 national network -- PBS
    • 381 television stations
      • 254 UHF educational stations
      • 127 VHF educational stations
  • 12. Broadcast Regulation
    • Federal Communications Commission
  • 13.  
  • 14.  
  • 15. Basic Powers of Regulators
    • Licensing
    • Supervisory
    • Rule-making
  • 16. FCC Objectives
    • Healthy industries
    • Competition
      • More choices and lower prices for consumers
    • Diversity of voices
    • Localism
      • Local control
      • Local programming
  • 17. Rulemaking
    • Notice of Proposed Rulemaking
    • Comments
    • Promulgate Rule
    • Requests for Reconsideration
  • 18. Licensing in U.S.
    • 8 year license period
    • licensee must serve public interest, convenience and necessity
    • availability of frequency
    • no opposition
  • 19. Basic Qualifications
    • Technology
      • comply with FCC technical standards--transmission facilities, interference avoidance and signal quality
    • Financial
      • adequate capital -- sufficient funds to operate station for three months without ad revenue
  • 20.
    • Character
      • lack of serious legal violations (don’t lie to commission, engage in fraudulent programming or commit felonies)
    • Citizenship/Ownership
      • U.S. citizens
      • ownership restrictions
    • Equal Employment opportunities
      • Don’t discriminate
  • 21. Media Concentration
    • Ownership
    • Quotas
  • 22. Spectrum Management
    • spectrum allocation
    • band allotment
    • channel assignment (licensing)
    • Berlin International Radio Convention of 1906
  • 23.  
  • 24. Media Ownership Rules Always a debate
  • 25. Other Things that Are Good to Know
  • 26. Other Powers of the FCC
    • Warnings
    • Fines (forfeitures)
    • Revoke Licenses
    • Refuse to Renew Licenses
    • Position Papers
    • Informal Negotiations
  • 27. Specific Rules
    • Ownership
      • Concentration
      • Foreign ownership
    • Political Advertising
    • Children’s Television
    • Cable
    • Satellite
  • 28. More Rules
    • Advanced television (digital; HDTV)
    • Close-captioning
    • Indecency
  • 29. Some Background
    • For almost 40 years there were only 3 national networks in the United States.
    • Today there are 6 national networks.
    • Is the U.S. twice as big today?
  • 30. Dominance of Big Three
    • In 1983 big 3 had 80% of the prime time viewing audience
    • In 1980, networks and their stations and affiliates accounted for about 90% of revenues and profits in broadcast television industry
  • 31.
    • Economic
    • Technical
    • Regulatory
  • 32. Economic Reasons
    • First networks grew out of existing radio networks
      • CBS
      • NBC Red
      • NBC Blue
  • 33.
    • Could use radio profits to finance television
    • Had an established program pool to exploit
    • Could shift program, sponsor and audience to television
    • Many new tv licensees were long-time radio affiliates
  • 34. Technical Reasons
    • co-channel interference -- need 200 miles between same channel stations
    • adjacent channel interference -- need 60 miles between adjacent channels
  • 35.
    • even in largest city, interference would limit number of channels to 7
      • 2, 4, 5, 7, 9, 11, 13
    • economically, even in large markets only a handful of stations will be successful
  • 36. Regulatory reasons
    • FCC decided to assign only limited portions of spectrum.
    • FCC wanted to assign, wherever possible, at least one television station to each U.S. community (localism).
  • 37.
      • because most communities close in proximity, in order to avoid interference, had to limit the area television stations serve
      • to allow for transmitters in small communities, FCC had to limit number of stations assigned to larger cities
  • 38.
    • Effect was to limit number of available outlets that the networks might use to reach large numbers of viewers
    • Localism model
      • criticism: overconfidence in local area’s ability to produce viable programming
  • 39. Alternate: National Model
    • Put all stations in big cities
      • 2, 4, 5, 7, 9, 11, 13
    • Practical reach of signal is 50 miles
    • Use repeaters to expand reach
  • 40. How Did We Get 4 Networks?
  • 41.
    • struggle between major movie studios and networks for ownership of television programming
    • FCC imposed rules in early 1970’s
      • financial interest and syndication rules, networks could not own any prime time programming it distributed
  • 42.
    • resulted in increased supply of available programming
    • availability of programming led to growth of broadcast television stations -- mostly independents
      • 1975 -- 80 independents
      • 1980 -- 121 independents
      • 1985 -- 241 independents
  • 43.
    • Fall 1986 -- Fox begins
      • 1 program
    • 1987
      • single night of programming
    • 1993
      • five nights of programming
  • 44.
    • FCC suspended full-regulation of Fox so it could grow.
  • 45. Why More than 4?
  • 46. UPN and WB
    • availability of stations
    • availability of supply of programming
    • repeal of fin/syn rule
      • studios want to distribute their programs and then syndicate same
      • weblets are owned, at least in part, by studios/producers
  • 47. 2006
    • end of UPN and WB
    • birth of CW
  • 48. Four Advantages of Networks
    • Reduced transaction costs
      • one network schedule takes care of 200 affiliates
    • Increased efficiency
      • advertisers need only deal with one network (who might guarantee the audience)
    • Distribution costs reduced
      • cost of transmitting signals to affiliates reduced if same program scheduled simultaneously
    • Success breeds success in network scheduling of programs
  • 49. Ownership of Local Stations
    • Network
      • owned-and-operated (O&O)
    • Station Groups
      • Cox Communications
      • Hearst
    • Business or individual
  • 50. Local Station
    • Administration
    • Sales
    • Programming
    • Promotion
    • Engineering
    • Traffic
    • News
  • 51. Trends
    • Mergers & consolidation leading to vertical integration
    • Globalization
    • Shrinking audience
    • Increased options for audience
    • Going digital
  • 52. Vertical integration firm controls different aspects of production, distribution and exhibition of its products
  • 53. Vertical Integration
    • In 1993, vertically-integrated companies (production, distribution, station ownership) had 27% audience share.
    • 1n 2003, have 69% audience share.
  • 54. Current Issues
  • 55. Current Issues
    • Ownership Restrictions
    • Everything is Getting More Expensive
  • 56. Everything is Getting More Expensive
  • 57. Programming
    • In the final season, NBC paid Paramount $5.2 million per episode for Frasier
    • Even reality shows can cost $1 to $2 million per episode
  • 58.