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Broadcast Television and the Network System

Broadcast Television and the Network System. The Business Model. Why Is Network TV So Valuable?. Scarcity of airwaves High corporate demand, prompted by easing of regulations Gives advertisers access to largest national audiences

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Broadcast Television and the Network System

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  1. Broadcast Television and the Network System The Business Model

  2. Why Is Network TV So Valuable? • Scarcity of airwaves • High corporate demand, prompted by easing of regulations • Gives advertisers access to largest national audiences • Network services the most watched on cable (beginning to change)

  3. Benefits of networks • Near-zero marginal cost: an additional customer costs next to nothing • One network schedule for approx 200 affiliates. • Advertisers deal just with one network • Network programs benefit from being scheduled adjacent to one another

  4. Station Types (1) network owned and operated (2) affiliates (3) affiliated with limited networks (4) no network affiliation

  5. Approx. 1,500 TV stations altogether • 211 markets • 1,100 are commercial • Big 4 networks have ~ 890 affiliates • Most homes watch 7 hours a day.

  6. “Threats” to Networks • Loss of “twenty-somethings” % of 18-to-34 year olds watching primetime • Age of primetime viewers: NBC Av.age 46 ABC 44 CBS 54 MTV 21.5 50% of movie-goers are 12-to-29

  7. “Threats” to Networks • “Death” of live viewing? DVR, Digital recording (e.g. TiVo) enhances time-shifting • cable siphons of network viewers • videogames

  8. “Threats” to Networks • Loss of niche markets to cable: news to CNN, Fox News, MSNBC music to MTV kids to Nickelodeon.

  9. Network Responses • Provide video-on-demand versions of network shows • Increase production of reality shows (popular with younger audiences) and charging advertisers as much for them as for high rated scripted shows

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