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Discussion Starter · #1 ·
Link to article:

Free-to-air TV is under threat, warns FCC chief


Quote:
Michael Powell (pictured), the FCC chairman, said the growth of cable and satellite television had "dramatically" changed the economics of free-to-air broadcasting.


In an interview with the Financial Times, Mr Powell said the growth of multi-channel cable and satellite television services, which now reach more than three-quarters of US households, had placed a question mark over the willingness of television networks to continue broadcasting free of charge.
 

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Yeah, I'm sure they're go to abandon this multi-zillion-dollar business.

http://www.fortune.com/fortune/ceo/a...447824,00.html


A juicy quote:


"NBC is by far the most successful of the broadcast networks--it will generate more than $700 million in profits from prime time alone during the current TV season..."


I'm sure they'll pull the plug on all that ASAP.


Mark
 

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Profitable. Hardly. Only Two Companies are making money and a lot of money it is. NBC and CBS. NBC is making around 700 Million while CBS is makring around I think 600 million. While Fox and ABC are LOSING Hundreds of Millions. So Fox and ABC are losing almost as much as NBC and CBS are making.
 

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Yup, the sports contracts have a lot to do with it -- rights fees are expensive, and broadcasters can't raise money from both advertising and subscriber fees like ESPN does.


That said, it is not really the whole truth to say that those networks are losing money -- the flip side of this is that while the networks may lose money, they massively enhance the profits of the network's "owned and operated" stations. The odds are that ABC and Fox make far more from those stations than they lose from the networks.


And while it is certainly the case that OTA broadcasters do face some issues and challenges, I would also note that Mr. Powell's comments were made primarily to justify another round of consolidation and deregulation.
 

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Quote:
Originally posted by Thomas Desmond
Yup, the sports contracts have a lot to do with it -- rights fees are expensive, and broadcasters can't raise money from both advertising and subscriber fees like ESPN does.


That said, it is not really the whole truth to say that those networks are losing money -- the flip side of this is that while the networks may lose money, they massively enhance the profits of the network's "owned and operated" stations. The odds are that ABC and Fox make far more from those stations than they lose from the networks.


And while it is certainly the case that OTA broadcasters do face some issues and challenges, I would also note that Mr. Powell's comments were made primarily to justify another round of consolidation and deregulation.
Actually they are not making more from those stations. Last Season ABC lost around 400 Million and Fox around 200 Million. If this goes on for much longer one of them will die. Don't be shock if soon Fox or ABC shuts down.
 

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Neither Fox or ABC will shut down in this decade. Please.
 

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Quote:
Originally posted by rogo
Neither Fox or ABC will shut down in this decade. Please.
Probably true. There is no doubt that advertising revenues in major metropolitan areas will probably keep the "big 4" on the air for the forseeable future. This is somewhat complicated, however, with the digital transition. Some antenna-only people may balk at buying new tuners, televisions, VCRs, etc. and simply switch to cable.


And once you get out of the top-30 markets, is there really that much money to be made? I read of one station that said the cost to buy minimal digital-broadcast equipment would take more than 3 years of gross revenues (not profits, mind you.) In fact, those of us in these sub-30 markets are seeing broadcasters drag their feet on making the significant investments to fuel the transition, probably because of the extreme costs vs. potential returns. It wouldn't surprise me to see the major networks start to offer their programming via satellite around the time of the analog switch-off, much like CBS is doing now on Dish.


The picture in the big cities is rosy, no doubt. But the idea of near-nationwide coverage by "network" television may be coming to a close. And while we're championing the advantages of digital television and HDTV, it's also worthwhile to consider what this transition is going to do in areas that have been squeaking by.
 

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The transition will be painful, no doubt for small market stations. However, after the transition, 4-6 SD stations would be able to share a 6Mhz channel, and the associated operating and hardware costs.


This is a long way off, but the point is that the post-analog broadcasting market will be radically different from what is going on today or even in the near future, and therefore very difficult to forecast. You can predict either gloom and doom or rosy scenarios.
 

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Quote:
Originally posted by sregener
Probably true. There is no doubt that advertising revenues in major metropolitan areas will probably keep the "big 4" on the air for the forseeable future. This is somewhat complicated, however, with the digital transition. Some antenna-only people may balk at buying new tuners, televisions, VCRs, etc. and simply switch to cable.


And once you get out of the top-30 markets, is there really that much money to be made? I read of one station that said the cost to buy minimal digital-broadcast equipment would take more than 3 years of gross revenues (not profits, mind you.) In fact, those of us in these sub-30 markets are seeing broadcasters drag their feet on making the significant investments to fuel the transition, probably because of the extreme costs vs. potential returns. It wouldn't surprise me to see the major networks start to offer their programming via satellite around the time of the analog switch-off, much like CBS is doing now on Dish.


The picture in the big cities is rosy, no doubt. But the idea of near-nationwide coverage by "network" television may be coming to a close. And while we're championing the advantages of digital television and HDTV, it's also worthwhile to consider what this transition is going to do in areas that have been squeaking by.
However you have a problem when your revenues is less than your cost. For Fox and ABC their cost is much greater than all of their revenue. At the end of the year they have a net lost. This is a problem. Companies don't stay in buisness to long if they dont start making money.
 

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There's no such thing as "free" television. You pay for commercial television every time you buy a product made or sold by an advertiser--whether you watch the programs on which they advertise or not. You don't get to choose what programs your money buys. Those decisions are made by a bunch of people trying to maximize the number of viewers that the advertisers want to watch their commercials--usually 18 to 49 year-olds.


No wonder so many people have flocked to cable and satellite services. Broadcast program quality is, at best, a secondary concern to the network programmers. So we get "reality" programs (most of which are just dressed-up, cheap-to-produce, game shows), inane sitcoms, and insipid "dramas," most trying to be as inoffensive as possible.


I doubt I'd miss broadcast TV at all. The few things I watch on it now (mostly sports) would certainly be picked up by some cable channel or other. But I wouldn't hold my breath waiting for it to disappear. The broadcasters are one of the most powerful lobbying groups in Washington, and their friends in Congress will keep them in (profitable) business, probably forever.


Rich
 

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Don't confuse network operations gains/losses with those of the networks' owned-and-operated stations. All the networks are making some serious money with their highly profitable stations. Everybody in the TV broadcasting business knows that stations are the real profiit center, not the networks. Why do you think the networks are chomping at the bit for further ownership deregulation? Because the want to buy more stations than they currently are allowed to own.
 

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Quote:
Originally posted by David McRoy
Don't confuse network operations gains/losses with those of the networks' owned-and-operated stations. All the networks are making some serious money with their highly profitable stations. Everybody in the TV broadcasting business knows that stations are the real profiit center, not the networks. Why do you think the networks are chomping at the bit for further ownership deregulation? Because the want to buy more stations than they currently are allowed to own.


Ok For ABC everything they do including the money they make from their owned and operated stations and the money they spend on programming. They DO NOT MAKING PROFIT. You can do some research on it. Think of it this way. Lets say they make around 600 Million from theire own and operated Stations, but loose Over 1 Billion from programing because its not free to make the programs. So the amount they make in Owned and Operated station can not make up for their other loses.
 

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Sorry VTboy you are missing the big picture, ABC and FOX do not exist as separate companies anymore. ABC is Disney, which is going to keep ABC no matter what, they make money with ABC by syndication and cross marketing. ABC adds to Disney's profit indirectly many different ways.


FOX is owned by NewCorp, Newcorp is like one of worlds biggest media companies ever! Same thing with FOX as ABC NewsCorp can lose money on there FOX network and right the loss off, but will make money from FOX indirectly. You know how much NewsCorp made by selling X-Files DVDs ?
 

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News Corp isn't as big you think. News Corp is dwarfed by the likes of Time Warner and Viacom the two largest Media Giants. As for Disney a few years ago Disney was Much Larger than Viacom and now Viacom is larger than Disney. So over the years both News Corn and Disney havn't been doing as well as other media companies.
 

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VTBoy: Fox, ABC and CBS are all part of media companies that own movie studios, for openers. They all have critical cable interests. This doesn't even begin to get to the value of owned-and-operated stations, it merely points out the strategic relationships these businesses are engaged in. [Note to self: Predict that AOLTW will pry NBC away from GE.]


The synergies these things bring to one another are no longer nice and interesting, they are downright necessary.


Disney would sooner have their execs gouge out their collective eyeballs than shutdown ABC, which ends up making money even when the parent is struggling. [Note to others: No one here is suggesting execs gouge out their eyeballs, unless they are forced to watch "According to Jim".]


News Corp. may or may not be netting out positively between stations and the Fox network parent, but I suspsect they could well be. This is especially true with Fox's very strong winter/spring after a disastrous fall. Again, shutting down Fox network is not going happen. Furthermore, I suspect News Corp./Fox will indeed renew its NFL deal in 2005.


The most struggling of the media giants is actually AOLTW, which is at much more of an ambiguous crossroads. Still, none of them are going away. In fact, with the likelihood of new ownership rules, they may get even bigger.


Mark
 

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I am not a subscriber, but the answer would be no because it would be a copyright-law violation. Someone could post a synopsis with limited excerpts, but that's it.
 

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Discussion Starter · #20 ·
Quote:
Originally posted by sasha_j
This link seems to need a subscription. Could you please post the contents of this article here in the thread?
When I first posted the link, it did not require a subscription and I think the article has already being archived and this is why a subscription is required now. What rogo has stated is quite true.
 
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