Robert H. Heath

TV Networks Weathering the Storm

I found the NYT article to be anything but optimistic for the broadcast networks.

Yes, declining audiences overall mean that there is scarcity value associated with those shows that still deliver, which has sustained some pricing power. And pre-selling inventory in the upfront (as in any business) means current economic conditions will have a lagged effect on broadcast ad sales. But the fundamental trends for broadcast networks and their local affiliates are anything but bright.

The networks are in the business of selling people's attention. And they face more competition for people's attention than at any time since the the commercialization of the technology a half century ago. Moreover, they industry operates with cost structures, guild rules and operating practices largely established under conditions of benign regulated oligopoly.

Finally, most of the regulatory, geographic and distribution structure of the industry is predicated on over-the-air transmission of local content (basically news) that is largely irrelevant to the 85% of the market that subscribes to cable or satellite services.... or relies on the internet for news.

How much longer will local news ("four alarm fire on Pine Street, film at 11:00") support this outdated business model?