1 / 18

Network economics & regulation

Network economics & regulation. Ideas and definitions. What do networks do?. purchase programming or self-produce deliver via local stations to viewers act as intermediaries. Who do networks interact with?. Producers Affiliates Advertisers. Advantages & Disadvantages.

chas
Télécharger la présentation

Network economics & regulation

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript


  1. Network economics & regulation Ideas and definitions

  2. What do networks do? • purchase programming or self-produce • deliver via local stations to viewers • act as intermediaries

  3. Who do networks interact with? • Producers • Affiliates • Advertisers

  4. Advantages & Disadvantages • lower per-unit costs • important because of first-copy costs • scheduling adds value to programming • compared to direct syndication • large audiences, no duplication • Drawback • Large audiences = loss of viewer satisfaction

  5. Why affiliate? • Network programming as a whole is more profitable • Perhaps not a case-by-case basis • Syndicated programming may appeal more in local market • Sell advertising time to national advertisers • Decreased profits compensated by nets

  6. Network Compensation • Difference between • network ad revenues; and • affiliate expenditures for network programming • Power relations • networks powerful in larger markets • affiliates powerful in smaller markets

  7. Network “Clearance” • percentage of national markets where a show airs • basis for reduced costs associated with networking • “Free riders” carry only profitable network shows

  8. Preemption • Affiliates free to preempt programming • usually weak shows • compensation slightly above profits from preemption • preemption results in lower production spending • exclusive-dealing contracts are illegal

  9. Network regulations • Attempt to curb network power • Contractual limitations with affiliates • Prime-time access rule • Financial interest and syndication rules • Repealed in 1995

  10. Risk-Bearing What Is It & Who Cares?

  11. What is “risk-bearing” • Economic term • Costs must be “borne” prior to profitability • How does “risk-bearing” affect industry players?

  12. Economics of risk-bearing • What are the risks? • unpredictable profits • high production costs • Correlation between production budgets and popularity • More expensive shows are more popular– often • Nets bear risk better than producers

  13. FinSyn and Risk-bearing • Shifted risk from networks to Hollywood • Increased production costs • Lowered network profits • Less innovative programming • Network risks are lower • “Adjancency” • networks take more chances • Reduced option periods

  14. Option periods • length of contract between producer and network • gives network “right of first refusal” • long option periods mean more network risk • short option periods mean more producer risks

  15. Network Decline How (and Why) the Mighty Have Fallen

  16. Why Have Networks Declined? • Increased competition, especially cable • Open skies satellite policy • Alternative forms of cheap distribution

  17. How Can Networks Survive? • Harvesting • short-term: hold on while you can • cost-cutting; lower production costs • Backward vertical integration • buy production companies • Forward vertical integration • buy more stations • Charge for broadcast • Exploit new technologies

More Related