TV Business

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by Hailey Rovner, Rachel Thimble, Jodi Zimmerman

While many other media outlets are beginning to die off, television stands strong. It has the ability to transform and adapt as new forms of media emerge. In fall 2011, television is still one of the biggest sources of income for major studios, even more profitable than film. The television business is by no means simple, but it is effective in creating content, reaching the viewer, and turning a profit.

Major Players

The television business is composed of network and cable executives with highly creative visions for their channels. The fall season for a television network is a critical time and entertainment and network executives work tirelessly to secure and create the best programming and right advertising for their network. In Fall 2011 major players of the television business worked no differently. Below I will outline the major network and cable channel executives and their contributions to the fall 2011 television business.

ABC

CBS

  • Leslie Moonves is President and Chief Executive Officer of CBS. In a time where television networks are faltering in the troubled economy, the CBS Corporation advertising revenues were stable in the third quarter thanks to Moonves: http://www.nytimes.com/2011/11/04/business/cbs-and-directv-results-attest-to-media-strength.html. CBS’ solid financials in Fall 2011 are also accredited to Moonves’ approach to programming costs. Moonves is more interested in producing programming with a long-standing audience then investing in new shows like Fox with “The X Factor”: http://www.variety.com/article/VR1118043143?refcatid=4076&printerfriendly=true.
  • Nancy Tassler is the President of CBS Entertainment. Tassler has been at the helm of CBS since 2004 and since then CBS has attracted the highest number of viewers. CBS’ consistently high viewership is mostly accredited to its long-standing programming with loyal audience bases (like CSI, Two and a Half Men). Tassler only launched five new shows in the fall programming line-up, please see the article for more information: http://www.variety.com/features/falltv/. A strong advocate for all CBS programming, Tassler made the surprising decision to move Rules of Engagement, a comedy, to Saturday nights. This move was made in an effort to attract more advertisers to the show because advertisers are more apt to advertise on comedies: http://www.canada.com/entertainment/Fine+Tuning+column+Saturday/5525348/story.html.

CW

FOX 

ION

NBC 

Programming

Types of Programming

There are two basic types of programming. The first is called Original Run. In this case, a producer creates a program that the network has paid for the production of or the license to. In general, primetime shows are original run shows. The second type is Syndication. Syndication is the secondary run of a show. The network usually does not have any hand in the production of the show. The simply obtain the rights to air the program after the original run and decide when and how often it will air.

Scheduling

Networks must strategically build their schedules in order to garner the most possible viewers and therefore increase a programs worth. They use many different strategies, some of the most common are,

Lead Off –  Begin evening with a strong program to get an large starting audience

Lead In-  Place a stronger show ahead of a weaker show as an attempt to have the audience carry over

Hammocking – Placing a weaker show between two strong shows hoping viewers will watch the middle show in between the two stronger ones

Blocking –  Placing a new program with a similar established program

Tent-Poling– One strong show is placed between two weak ones

Bridging-  Starting and ending programs at odd times, causing them to run past the starting and end points of other networks

Counterprogramming – Offering something of completely different appeal than the other shows airing at that time

Blunting – Matching competition by scheduling shows with identical appeals

Stunting – Scheduling specials, adding guest stars, promotions, etc.

Seamlessness – Running the end of one program right into the next to keep the viewer on the same channel

Funding

Different types of television earn theirs funds in different manners:

  1. Commercial – earn money by selling air time to advertisers
  2. Noncommercial – receive money through donations from individuals, businesses, and government
  3. Network – sell advertising
  4. Local – sell advertising in region/community
  5. Cable – cable box and subscribers, advertising too
    An important period of time is called the upfront. This refers to the summer before shows are on television, during which networks show the advertisers pilots or past ratings, calculate how many viewers they expect, and try to sell commercial blocks in advance.

Ratings/Shares

An intricate part of TV Business is determining how to market TV programs. Networks and stations want their programs to do well, and to increase viewership. They ask themselves questions such as: how many people are watching the program? How does this number compare to other TV programs airing at the same time? And which age group/gender/ethnicity watches the program? This is where ratings and shares play an important role.
A rating is the number of households tuned into a program based on all households that own a television. A share is the number of households tuned into the program based on the number of households watching television at that specific time.

Watch the following video to learn more about ratings and shares: Ratings and Shares Video

Arthur Nielsen founded Nielsen ratings, the system most commonly known today. Another company, Arbitron, released the Portable People Meter in 2007. The PPM is a small device, much like a pager or cellphone, that electronically gathers inaudible codes that identify the source of a broadcast. The participating audience member wears the device for one-two years.

Check the following links to see if your favorite broadcast and cable television programs are doing well for shares and ratings this week:
Broadcast  or  Cable

Development Deals

Hollywood’s TV Factory

https://blackboard.syr.edu/bbcswebdav/courses/20273.1121/Hollywood%27s%20TV%20Factory%2C%20from%20%27Big%20Bang%20Theory%27%20to%20%27The%20Voice%27%20-%20WSJ.com.pdf

“For Warner Bros. to entice rival companies to buy its programs, it has had to open its checkbook to secure hugely expensive deals with the industry’s top producers. Peter Roth, president of Warner Bros. TV, has assembled or retained a cadre of the biggest-name producers in the business. Mr. Lorre, “E.R.” and “West Wing” veteran John Wells, Mr. Bruckheimer and “Lost” creator Mr. Abrams, among others, all have exclusive TV development deals with Warner Bros. In March, Warner Bros. signed an eight-figure multiyear deal with “Everwood” and “Brothers & Sisters” executive producer Greg Berlanti. Deals often come with annual fees and overhead as well as a hefty portion of revenue from syndication and DVD sales”< /font>

With deals such as these, both the studio and the talent benefits. Studios gain access to  first access to work from many top producers, writers, and actors. They eliminate the competitions ability to pick up these projects first. For the talent, they may make small creative sacrifices and may lose out on some syndication revenue, but they gain a steady paycheck and easy funding for their projects. They are also more likely to pursue projects which may otherwise have difficulty finding a studio because of controversial or out of the ordinary themes. Warner Brothers Studios is the most well-known studio to employ these types of deals and have signed big names such as Chuck Lorre, Greg Berlanti, and JJ Abrams.

Online Viewing

Everyone’s schedules are hectic nowadays, but we still want to fit in time to view our favorite TV shows. It’s hard to be around exactly when the shows are scheduled on television, however, online viewing has become extremely popular. Networks have websites, and on their websites they often make recent episodes of their programs available for viewing for free.  Sometimes they also stream older episodes and shows, for example, cbs.com features “CBS Classics” with shows such as “I Love Lucy,” “ Star Trek,” and “ Happy Days” to name a few.

Also, there are websites such as Hulu.com and Netflix.com that stream television shows.
In September, Blockbuster (remember them?!) actually released a video streaming service for subscribers of the Dish Network. Read more here. 

In early October, Hulu and Univision made a deal, and Hulu added Spanish-language television shows for the first time. Read more by clicking here. 

Current Trends

Television Meets Internet

With networks partnering and licensing their shows to Hulu and Netflix, it has become evident that the television industry is learning to embrace the internet. Instead of seeing the internet as a medium that takes away from overall television viewership, television executives see the internet  as a tool to garner a wider audience for their programming.

On October 28th it was announced that the CW was teaming up with Hulu to stream all of their programming from Gossip Girl to The Vampire Diaries (http://www.huffingtonpost.com/2011/10/29/hulu-getting-cw-shows_n_1065205.html). Ryan Nakashima writes, “the five-year deal announced Friday means that before the end of the year, the online video service will feature shows from five of the largest six broadcasters — ABC, NBC, Fox, the CW, and Univsion. The only holdout is CBS” (http://www.huffingtonpost.com/2011/10/29/hulu-getting-cw-shows_n_1065205.html).

As more and more people are growing up using the Internet, streaming sites like Hulu and Netflix are becoming the norm of how to consume television programming. Hulu and Netflix mark the next phase of the television industry, it does not put an end to the television industry.

Television vs. The Box Office

Believe it or not more and more people are stepping away from their couches and heading to the movie theaters thanks to 3D films. While 3D televisions are available, they are available for a hefty price.

Film studios are churning out re-releases of blockbuster films like The Lion King in 3D. The Lion King 3D cost Walt Disney Pictures $10 million dollars to convert to 3D and made $60 million dollars in the box office(http://www.therecord.com/living/article/600241–aging-hollywood-blockbusters-to-get-3d-makeover). Now, with the success of The Lion King, film studios are looking to re-release classics like The Titanic and Top Gun in 3D (http://www.therecord.com/living/article/600241–aging-hollywood-blockbusters-to-get-3d-makeover). The 3D experience in a movie theatre is an experience that can only be re-created in a movie theatre. Moreover, this poses as competition to the television industry.

Social Networking and Television Viewership

Whether we notice it or not, when we are watching television we are never just watching television. While sitting down to view the season finale of NBC’s The Voice we are also on our laptops chatting to our friends about the final performances and scrolling through The Huffington Post on our iPhones.

Because television viewers are now “ multi-taskers” social networking has become a pathway for viewers to directly interact with what they are watching on television(http://www.tvweek.com/blogs/tvbizwire/2011/10/x-factor-unveils-relationship.php). For example, on the FOX talent reality-show The X Factor viewers are invited to vote and tweet about contestants while watching the show (http://www.tvweek.com/blogs/tvbizwire/2011/10/x-factor-unveils-relationship.php). In addition, X Factor judges tweet about artist performances live, giving the audience an even more in-depth view of the show.

In the September Forbes article: Is The Future of TV in Social Networking? Parmy Olson discusses the interaction between social networking and television: http://www.forbes.com/sites/parmyolson/2010/09/06/is-the-future-of-tv-in-social-networking/2/

Television Ownership is in Decline 

According to Neilson reports, television ownership is in decline for the first time in history (http://insidetv.ew.com/2011/11/30/tv-ownership-declines/). While the number of people who own televisions has been leveling off for the past couple of years, new research shows that less and less people are investing in televisions (http://insidetv.ew.com/2011/11/30/tv-ownership-declines/). The Entertainment Weekly article reports, “the rising trend of TV ownership has been leveling off in recent years, and now the number has dropped from 115.9 million homes in 2011 to an estimated 114.7 million in 2012,” (http://insidetv.ew.com/2011/11/30/tv-ownership-declines/).

The decline in television ownership can be blamed upon a host of reasons but the most interesting is the rise of the internet. With access to television shows on Hulu, Netflix, iTunes and others, more people are watching television shows right on their computers, smart phones, or iPad devices (http://www.yidio.com/news/sign-internet-has-won-tv-ownership-declining-4632). This decline in television ownership shows a clear shift in how people are consuming television: http://www.yidio.com/news/sign-internet-has-won-tv-ownership-declining-4632.

Cable Companies

Comcast Cable

In the Fall Comcast Cable launched the service XFinity TV. This service allows Comcast customers to watch TV shows and movies on-demand on their televisions or portable electronic devices. In the Fall TV season XFinity TV provided its customers to view many of the new series launching on major networks on-demand (from New Girl to A Gifted Man): http://www.comcast.com/About/PressRelease/PressReleaseDetail.ashx?PRID=1114. In October PC Magazine named Comcast the fastest Internet provider in the United States: http://www.comcast.com/About/PressRelease/PressReleaseDetail.ashx?PRID=1124 . This is an important accolade for Comcast Cable because as Cathy Avgiris says, “the Internet has become integral to how we experience entertainment, access content, and connect with friends and family,”

. In November Comcast announced that it would be promoting Vice President of Comcast Cable, Peter Kiriacoulacos to Senior Vice President of NBCUniversal: http://www.comcast.com/About/PressRelease/PressReleaseDetail.ashx?PRID=1129.

DirecTV

The RVU Alliance is defined as “a consortium of leading content service provider, semiconductor and consumer electronic companies gathered to advance the use of Remote User Interface (RUI) technology for home networked television entertainment, ensuring interoperability among devices implementing RVU’s RUI technology,”

. In an effort to streamline all of their devices and have DirecTV devices be compotabile with other technology DirecTV joined the RVU Alliance in September: http://dtv.client.shareholder.com/releasedetail.cfm?ReleaseID=603673. In an effort to develop the DirecTV network: the Audience Network, DirecTV bought the Canadian sitcom smash “Less Than Kind.” The Audience Network is known for presenting high-energy, daring programming from Damages to Underbelly

. “Less Than Kind” will make a great addition to the HD, commercial-free, 24/7 channel because this Canadian program is witty and clever satire on the inter-relationships of families: http://dtv.client.shareholder.com/releasedetail.cfm?ReleaseID=606867. Taking advantage of the new (and expensive) 3D television technology, DirecTV produced the original 3D series: On Deck with Jamie and Mike. This series offers an in depth look at America’s most famous ballparks and the fans and cities that house them: http://dtv.client.shareholder.com/releasedetail.cfm?ReleaseID=607262. DirecTV sets itself apart from its competitors by offering programming, other than movies, that utilize 3D technology. This was particularly exemplified when DirecTV broadcasted the “World’s Best Bull Riders” competition on October 30th in 3D: http://dtv.client.shareholder.com/releasedetail.cfm?ReleaseID=615155. On October 31, 2011 the dispute between FOX and DirecTV over carriage of FOX programming was final settled. DirecTV and FOX disputed over show costs of cable networks FX, Fox South, Fuel, and others

As of late-October DirecTV will continue to broadcast all FOX programming and networks: http://dtv.client.shareholder.com/releasedetail.cfm?ReleaseID=619508. Third quarter results reveal that DirecTV profits are increasing. The cable company reports that its revenue has grown 14%: http://dtv.client.shareholder.com/releasedetail.cfm?ReleaseID=620542.

Dish Network Corporation

In September Dish Network launched the 24-hour “MLB Network.” This network is dedicated to airing live regular season games, spring training games, original programming and baseball events. This network allows baseball fans to experience baseball, 24/7, all year round: http://press.dishnetwork.com/Press-Center/News-from-DISH/page/DISH-NETWORK-HITS-IT-OUT-OF-THE-PARK-WITH-MLB–(1). On September 23rd Dish Network launched the Blockbuster Movie Pass. This service streams TV shows, video games, and movies directly to your TV or computer. This is a comprehensive entertainment system that acknowledges the ‘empowered audience’ and gives the option to consume entertainment whenever, wherever: http://press.dishnetwork.com/Press-Center/News-from-DISH/page/DISH-NETWORK-INTRODUCES-BLOCKBUSTER-MOVIE-PASS,-FE. In the third quarter Dish Network revenue increased 12.3% since 2010 with $3.6 billion dollars. This is largely accredited to the newly launched Blockbuster Movie Pass: http://press.dishnetwork.com/press-releases/dish-network-announces-third-quarter-2011-financia-nasdaq-dish-0818204.

Time Warner Cable, Inc.

In an effort to promote broadband service to all Americans, Time Warner Cable has vowed to carry the PSAs for the Broadband Opportunity Coalition. Broadband Internet is important because it will make the United States more technically competitive in comparison to other world powers: http://www.timewarnercable.com/corporate/about/inthenews.ashx?prid=3340.

The film industry is threatened by the cable service: Movies on Demand. The film industry argues that this service takes away from box office ticket sales because people choose to wait until releases come to cable. However, in an effort to embrace Movies on Demand, the film industry released Tresspass, Margin Call, and Melancholia on Movies on Demand the same day as theatrical release: http://www.timewarnercable.com/corporate/about/inthenews.ashx?prid=3347. Time Warner Cable launched the “TWC TV” app for Android tablets in November. This app allows DTV customers to program their DVRs on-the-go and even as a remote control: http://www.timewarnercable.com/corporate/about/inthenews.ashx?prid=3392.

Cox Communications, Inc. 

In September Cox Communications’ High Speed Internet was rated the “Fastest in the U.S.” by PCmag.com: http://cox.mediaroom.com/index.php?s=43&item=560. While Cox Communications was at one time a cable provider, this fact and figure shows the interaction between cable and internet services. MyPrimetime, an on-demand television service, added new fall television programs to its on-demand queue. Ranging from FOX’s The X Factor to ABC’s PanAM, Cox Communications customers have access to many of the new fall television shows at anytime. This is just another example of the ‘empowered audience’: http://cox.mediaroom.com/index.php?s=43&item=561.

Fall 2011 Schedule

Every season, many new shows are launched with the hopes of being the next breakout. In fall 2011, 27 new shows were launched in total. http://www.nytimes.com/2011/09/18/arts/television/it-girls-mad-men-and-monster-slayers.html?_r=1&scp=3&sq=oprah%20winfrey%20network&st=cse

Early on there were many cancellations. Throughout the first half of the season, even more shows received the ax.

http://www.winnipegfreepress.com/arts-and-life/entertainment/TV/happily–ever-after–or-the-end—-tv–seasons-hits-misses-134812828.html

This article outlines which shows have been picked up and which have been cancelled as of December 1, 2011. Surprisingly, many shows which received much attention before the season began suffered early cancellation such as The Playboy Club and Free Agents. An unlikely standout is Once Upon a Time, a fairytale drama which is standing up to the fierce competition of Sunday Night Football.

 

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