TV structure braces for streamlining

By Published on .

Most Popular
As i view the broadcast landscape, I firmly believe the national broadcast networks will continue to be viable businesses well into the first decade of the new millennium.

Their programming capabilities, distribution system and the deep pockets of their parent companies will assure that. But as with every organization in a time of dramatic and constant change, as analog migrates to digital, the networks will have to be tough and aggressive both internally and with their suppliers.

The networks will have to adapt and reinvent many of their current practices, as well as build totally new ones, to ensure the opportunity to prosper.

By 2004, there will be about 55 million homes equipped with smart boxes; that's roughly 50% of U.S. TV households. The smart boxes will deliver programming and services to homes through either cable or satellite, giving consumers superior audio and video fidelity and more channels than they need or care about. Smart boxes will provide vastly superior access to the Internet and a whole range of services from video-on-demand to security.


So what's a poor network to do when faced with this difficult and highly competitive landscape? Let's take a look into the future.

The networks' studio partners will provide more programming, including first-run movies and offer specialized programming on a pay-per-view basis with limited commercial interruption for nominal fees.

Networks are offering different pricing for breaks within a show and positions within breaks because the use of convergence appliances has made some advertisers leery of ordinary rotation patterns.

The networks have realized they were burdened by too much paper and will adopt a direct-to-buyer electronic data interchange system.

A reduced prime-time schedule for ABC, CBS, Fox and NBC obviously reduces their costs. Major advertisers, in conjunction with the studio arms of the networks, again will own programs. Large advertisers will also take whole time periods while smaller advertisers share time periods. Media buyers, such as Media Edge, act as catalysts in both cases and broker time when necessary to help facilitate the process.


Let's look at some scenarios that might change the network landscape as a reaction to the America Online Time Warner merger: Let's say General Electric Co. abandons the network broadcast business and sells NBC to AOL Time Warner, forming AOL TV. GE has, however, retained its cable channels CNBC and MSNBC, as well as its Internet assets. In addition, it has bought all of Barry Diller's assets, including USA Networks, Ticketron, HSN, QVC and USA Studios. GE has also purchased the Scripps cable networks, HGTV and Food Networks. In an alliance with Dow Jones, GE has also struck an exclusive arrangement with Conde Nast titles.

Continuing this crystal-ball look, I imagine News Corp. strengthening its global multimedia capabilities by forming alliances with Bertlesmann and Hachette Filipacchi Media. The cable channels -- FX, Fox Family, Fox News and Fox Sports -- are sold in combination with the Fox Network and their Internet assets.

Viacom/CBS, with the aid of Paramount Studios and Showtime, has also done several pay-per-view events. It now programs CBS and UPN and has totally integrated its sales to include radio, TV, outdoor and Internet. It also has added a home service channel through Reader's Digest and Meredith Corp. alliances. Finally, it has added Odyssey Network and Oxygen Media to its portfolio.

Last but not least, say Walt Disney Co. merges with Sony Corp., integrating entertainment operations into one. ABC News becomes the first network to abandon the 6:30 p.m. newscast, finding it no longer met viewer needs. Replacing it -- and "20/20" -- is a full hour of news stripped at 8 p.m., featuring all its top journalists.


Speculation is a lot of fun, but we all know what really happens. AOL Time Warner buys all the networks and decides to offer only three services: a Quiz/Biography Network, a Movie Network and a Sports/News Network. These threenetworks are very profitable, mainly because of special charges paid by advertisers called Cyberbleeds -- the new name for integration charges.

In this article: