1. Television in the Digital Age Chapter 5 part 2 Economics of TV & Cable Television in a Democratic Society

2. Home Video & Recording Home video technology has evolved: – 1975-76 saw the development of videocassettes and VCRs, – 1990s saw take-over of VHS (Beta lost out) by digital DVDs, and in the 2000s DVRs. In 2010 90%+ of American homes have DVD players. Newest DVRs can record programming Changed our notion of prime-time TV. DVRs allow advertisers to track viewers http://www.youtube.com/watch?v=uYE3oYWsIAk

3. The Internet Further transforms viewing habits – We can watch TV on-line, or download applications to watch on mobile devices (for a fee). – “timeshifting” Created alternative forms of content – Hulu and Netflix are creating their own programming to compete with major networks and cable stations.

4. Interesting facts Hulu Hulu is a joint venture of NBC Universal Television Group (Comcast), Fox Broadcasting Company (21st Century Fox) and Disney–ABC Television Group (The Walt Disney Company), with funding by Providence Equity Partners, the owner of Newport Television, which made a US$100 million equity investment and received a 10% stake. Wikipedia Netflix As of September 2013, Netflix Q3 2013, Netflix reported global streaming subscribers at 40.4 Million (31.2 million in U.S.). In 2013, Netflix became a "streaming TV network service" that plans to compete with cable television and network television. Netflix also expressed an intention to eventually make television ratings obsolete[citation needed]. On July 18, 2013 Netflix earned the first Primetime Emmy Award nominations for original online only web television at the 65th Primetime Emmy Awards. Wikipedia

5. More platforms Direct broadcast satellite (DBS) closest to original CATV model – Best for remote/rugged terrain – Direct download link (no cable interface). – Two main companies: DirecTV and DISH network. More TV options, bundling of Internet service Cell phones, mobile video, WiMax: Worldwide Interoperability for Microwave Access- a wireless network. http://www.youtube.com/watch?v=pp2MAtRRfx 8 http://www.youtube.com/watch?v=pp2MAtRRfx 8

6. Economics of Television & Cable Syndication – Leasing to exclusive rights to air older TV series Includes cash or barter deals Fills “fringe time” Advertising – Nielsen ratings determine success of shows Subscriptions – Cable market only – Viewers pay monthly fee for basic option, more for premium channels like HBO or Showtime

7. Advertising Revenue/Media Plan http://www.ibtimes.com/economics-prime- time-how-much-does-it-cost-place-30-second- ad-prime-time-weeknight-tv-show-1424544 http://www.ibtimes.com/economics-prime- time-how-much-does-it-cost-place-30-second- ad-prime-time-weeknight-tv-show-1424544

8. Economics: Money Out Production – “Below-the-line” costs: 40% of budget on equipment, special effects, cameras, crews, sets, and so on – “Above-the-line” costs: 60% of budget on actors, writers, producers, editors, directors Distribution – Networks pay affiliates to show programs in return for ad time. – Networks own affiliates only in large markets (NYC, Los Angeles)

9. Ownership and Consolidation Many corporations have consolidated or been acquired to save costs. – Examples: Disney owns ABC, GE owns NBC – http://www.freepress.net/ownership/chart http://www.freepress.net/ownership/chart – http://www.businessinsider.com/these-6- corporations-control-90-of-the-media-in-america- 2012-6 http://www.businessinsider.com/these-6- corporations-control-90-of-the-media-in-america- 2012-6 Multiple-system operators (MSOs) – AT&T, TCI, and Comcast – Time Warner, AOL, and Turner – DirecTV and DISH Network

10. Television in a Democratic Society Cable, Internet and DVRs fray social bonds – No longer shared experience of network TV – Cable specializes in niche programming – Citizens have little input with service providers Mergers and consolidation worry critics – Will limit political viewpoints, programming options, technical innovation – Lead to price fixing TV can still unite large audience – Super Bowl draws most segments

11. What role does the viewer play? http://www.pbs.org/newshour/bb/media/july -dec13/tv_10-09.html http://www.pbs.org/newshour/bb/media/july -dec13/tv_10-09.html