Is Free TV in Danger?
 

By ANDREW VANACORE, AP Business Writer Andrew Vanacore, Ap Business Writer – Tue Dec 29, 3:07 am ET
NEW YORK – For more than 60 years, TV stations have broadcast news, sports and entertainment for free and made their money by showing commercials. That might not work much longer.

The business model is unraveling at ABC, CBS, NBC and Fox and the local stations that carry the networks' programming. Cable TV and the Web have fractured the audience for free TV and siphoned its ad dollars. The recession has squeezed advertising further, forcing broadcasters to accelerate their push for new revenue to pay for programming.

That will play out in living rooms across the country. The changes could mean higher cable or satellite TV bills, as the networks and local stations squeeze more fees from pay-TV providers such as Comcast and DirecTV for the right to show broadcast TV channels in their lineups. The networks might even ditch free broadcast signals in the next few years. Instead, they could operate as cable channels — a move that could spell the end of free TV as Americans have known it since the 1940s.

"Good programing is expensive," Rupert Murdoch, whose News Corp. owns Fox, told a shareholder meeting this fall. "It can no longer be supported solely by advertising revenues."

Fox is pursuing its strategy in public, warning that its broadcasts — including college football bowl games — could go dark Friday for subscribers of Time Warner Cable, unless the pay-TV operator gives Fox higher fees. For its part, Time Warner Cable is asking customers whether it should "roll over" or "get tough" in negotiations.

The future of free TV also could be altered as the biggest pay-TV provider, Comcast Corp., prepares to take control of NBC. Comcast has not signaled plans to end NBC's free broadcasts. But Jeff Zucker, who runs NBC and its sister cable channels such as CNBC and Bravo, told investors this month that "the cable model is just superior to the broadcast model."

The traditional broadcast model works like this: CBS, NBC, ABC and Fox distribute shows through a network of local stations. The networks own a few stations in big markets, but most are "affiliates," owned by separate companies.

Traditionally the networks paid affiliates to broadcast their shows, though those fees have dwindled to near nothing as local stations have seen their audience shrink. What hasn't changed is where the money mainly comes from: advertising.

Cable channels make most of their money by charging pay-TV providers a monthly fee per subscriber for their programing. On average, the pay-TV providers pay about 26 cents for each channel they carry, according to research firm SNL Kagan. A channel as highly rated as ESPN can get close to $4, while some, such as MTV2, go for just a few pennies.

With both advertising and fees, ESPN has seen its revenue grow to $6.3 billion this year from $1.8 billion a decade ago, according to SNL Kagan estimates. It has been able to bid for premium events that networks had traditionally aired, such as football games. Cable channels also have been able to fund high-quality shows, such as AMC's "Mad Men," rather than recycling movies and TV series.

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I love free tv. There's no reason for me to get cable. Between OTA broadcasts, netflix, itunes & online streaming, I can find anything I want for low to no prices.

In reality, this is a strategy FOX has encouraged its individual affiliates to pursue for years. It just so happens that it tends to ALWAYS come up during college football bowl season, particularly in locales that have a strong football following - that's not coincidence.

Next year, when the BCS heads to ESPN, it'll be interesting to see when/where FOX tries to exert leverage over the cable monopolies - it's really the only place the affiliates can use leverage.

Honestly, I hate the concept of paying for 600+ channels. I end up watching the channels that I would watch without cable or with basic cable. Sorry but my L&O SVU, Sex and the City reruns, daily news, ESPN, and court shows don't require more than basic cable.

But the dude hates that I don't watch all of those channels. Neither does he. We mostly use all of those channels to watch a movie OnDemand and even that has become obsolete with RedBox. But, he won't get rid of all of those channels because (I guess) having big flat screen tvs around the house is less cool when you don't have 600+ channels. :rolleyes:

Is this why I've noticed so much paid programming lately? I've NEVER noticed that on network television before, except in the wee hours of the morning - and in the last couple days, I've noticed infomercials/PP on Fox in the middle of the morning, sometimes as late as 1 in the afternoon.

I am hating even more as the bills creep a lil higher and still a lot of channels I want in HD still aren't in HD.

Also, it seems like nowadays HBO and other premium channels are competing against Netflix and Hulu and so on because it used to be that the premiums had 1st dibs on new movies but now I ask why have it when most of those 'new' movies they are airing I can (and already have) get thru Netflix weeks and months before? So is it really worth having anymore? Sure, if you get it for free thru whatever monthly special they are offering every few months.

Since I have had my own place, I have never had cable and probably never will. I have never seen the point of paying for extra channels so that I can watch reruns (because that's all I do with the cable channels--they are provided by my building--that I have, watch reruns of the stuff that I watch on regular t. v.)

If free t. v. disappears, I will use my t. v. for dvds and other things. Like my soror said, with all of the other options that are available for entertainment, it just doesn't seem necessary.

I got rid of cable and live in a remote enough area I don't get any broadcast channels (not even PBS anymore!) with the digital conversion so I hooked my computer up to my tv and watch things off the internet that way. I'm saving a lot of money, and I can get over not seeing something when it is hot and new.

same here. i havent had cable for almost two years, but my TV randomly picks up TBS, Food Network, and TV55 (which reruns a lot of daytime TV and sitcoms that come on during the day). I dont understand it, but i've gotten used to watching badly edited movies and syndicated sitcoms just fine.

and i too will watch shows/movies online when i can. i soak up what i can when i visit family and friends.

yeah! its crazy. ive noticed it too. apparently in the informercial world, there is a high need for blenders, juicers and food processors. who knew there were so many ways to chop food for the low, low cost of 3 easy payments of 19.95?

I pay almost 200$ a month in cable. I wish I could cancel it but I am hooked on True blood, Dexter, CNBC, movies on demand and primetime on demand. I hope Time W. does not get rid of Fox b/c now I am hooked on Glee.

^^^
Netflix & iTunes could take care of 99% of that. What's better, $200 a month or True Blood a la carte? The season pass on iTunes is $24.99.

These days, who doesn't have an ipod that they can connect to the tv?

I think that most of you, from younger generations, see the idea as no big deal, but I think you'll find that older generations will be quite a bit more upset. Honestly, my dad and most of the people in his generation do NOT have Ipods that can connect to their TV. A lot of people in my own generation are not that into their computers to be willing to watch TV on them. (A lot, not all, obviously). There are a great number of people who just aren't that into technology because they didn't grow up with it.

I clearly remember the days when having cable meant you had commercial free television and that was the big appeal of cable. You paid for it to not have commercials. That certainly isn't true anymore. I think it will be sad if free TV goes away. There are people who can't afford cable, high speed internet, computers that have enough resources to stream tv shows, etc. Since print journalism is disappearing, these folks won't even have access to basic news if free TV goes away. Do we want to cut our less tech savvy and indigent people out of the news loop?

The quote from the article about advertising not being enough to fund production brings the question to my mind "Why is it so expensive?" I have to wonder what the biggest costs are in producing a tv show. I would hazard a guess that a large part of it is the salaries of the actors/actresses. Did the actors/actresses on Friends really deserve $1million each per show? Don't they film a show in about a week? $1 million a week? And, because these people make so much money, the rest of us, who hope to make in a lifetime what they make in two weeks will pay more and more to cover their salaries? Yet, we don't want to pay for health care for people who don't have insurance? Our society's values are seriously messed up.

These would be more of my concerns about the disappearing media outlets. Though, these days, I don't even watch the television news for daily news; I listen to the radio.

I expect, over time, the same thing will happen to free radio, as more and more people get XM/Sirius.

I need free radio because I REFUSE to pay for radio.

Apparently Time Warner cable subscribers might have to start paying for FOX in the very near future. My FOX channel keeps showing a banner at the top of the screen listing shows that people will be missing (aka anything FOX shows) like Bowl games, House, etc.

A helluva lot of people said that about TV when cable first came on the scene too.

And the people who felt so strongly about it didn't get cable...until their free channels received such poor reception (conspiracy) that they had to at the minimum get basic cable.

Paying for radio is dumb to me. When I get tired of the music and radio shows on free radio, I either put in a CD or turn it off completely. Those who wish to have XM/Sirius can enjoy it---I don't want everything else to keep crumbling because so many people want to pay for this stuff (usually stuff that they aren't going to use but a few stations from--just like using only 6 channels on a 600 channel cable system).

That's a scare tactic. These have been used so many times it's not funny. You do mean paying extra like it's HBO, right? Cause if you have cable you're already paying for it...

Sirius XM is great for people who are on the road all the time, and for businesses. If you're just in your car a normal amount of time though, I think it's an absolute waste of money. Like DrPhil said, there's a concept of CDs.

Free tv is already gone - the digitalization saw to that. Before that happened, my parents' house got 7 channels, including all the main networks. After it was put in place, AND after buying the converter, I could only get 3. I HAD to get cable because the signals didn't come over the mountain and were that weak.

And the last thing I want to do is watch TV shows on any sort of computer. I can make it through a SNL skit on youtube and even that is pushing it.

I have also noticed that a lot of new rental cars have Sirius XM (or something like it?).

See! That's the conspiracy that I was talking about ealier. Most of this stuff is being forced upon us.

And if people keep using the U Scans at the grocery store, cashiers will be gone too, just like Full Serve gas stations. We think we have choices and options but it's all just a conspiracy, truly.

You're obviously not from NJ.

When I first moved to New York, I had no idea about the gas pumping rules in NJ. I went to a gas station and started for the pump but the pump guy started fussing at me to get back in my car. I had no idea what was going on so I left the station altogether. Now I LOVE it!!

Should I stock up on gallons of water, cans of nonperishable items, and get my rifle ready? :eek:

I don't use U Scans too much because I'm lazy and don't like being put to work when I'm spending money. I will U Scan at 24 hour grocery stores where the cashiers are unavailable or if I'm in a rush and the lines are long. I hate it all the same.

I only know of 2 full service gas stations. The victims of city living. We should do a "where are they now?" for the gas attendants of yesteryear. :(

Yes, paying extra like HBO. I don't have Time Warner. We are satisfied enough with our package provider, though I agree that the it's expensive. We need a fast internet connection bc my husband sometimes telecommutes, and we both watch cable stations probably 4x as much as we do the networks. He loves the HBO shows and I love A&E, Discovery, Animal Planet, and a bunch more of the specialty channels. So we just made the best choice for us.

We don't have expensive hobbies, and whenever we buy new electronics (like replacing my 4-year old laptop for various reasons), we usually try to sell the older version (he saves boxes and packaging) and try to recoup 1/3 to 1/2 of the older item's original cost to put towards the new item. So before we get new phones, mpg players, etc., we check to see the going price and sell-ability of used items we have, before committing to making a new purchase. Of course, I cringe when I have to spend $100 at the grocery store (I load up when chicken breast is on sale for $1.99 a pound), so we weigh our costs carefully.

Not to totally take the thread aside, but I am a firm believer in decluttering and selling items you no longer use or when you need to upgrade. We have sold DVDs, CDs, tech books, and donated clothing and furniture to the Salvation Army for the tax deductions. So much of the stuff is still in amazing condition, and someone else will be able to get things at a bargain. It's also a way of being green.

Off - off topic.....

Maybe it would be better if every U scanner came with a microphone so you could shout into them "I need a price check on an item!!!". I think that it would make it more fun!!! :)

I love the self-checkout! And if it had a microphone, i would love it even more!!!!

I like the self checkout, because many times i've had items marked wrong (like lower than they should be) and you don't have the cashier asking for a price check to change it. Like everytime I go to Albertson's and buy a case of water, it charges me the price of 1 water bottle ($1 something) instead of the price of a case ($5 something). That's not something you'd get away with w/ a cashier lol

I like the self-checkout but I worked at Target for so long that I'm a speed demon at the check-out lanes. I was a Jewel once and used it and the attendant said that I was way faster than most of their cashiers!

I hope it wasn't sarcasm. :o

ETA: To stay on topic. I don't pay for most of my TV watching anyway, muahahaha.

Oh, I'm still all for free tv. That comment was for some of the cable shows.

This isn't a free TV comment, it's losing channels on cable ..... I LOST THE FOOD NETWORK!

Cablevision is not carrying the Food Network anymore ... ugh! It's the only channel I watch! I told the boy that I'm going to be camping out on his couch, haha .. I'm so sad. What a crappy New Year's Day surprise .. we didn't even get any kind of warning; it just went off air today. :(

One of my TVs is almost 20 years old-not sure how I would hook up my computer to it? I am not very computer savy.

A TV that old - unless it's a high-end TV - probably doesn't include component outputs for audio and video; the only solution available is buying an RF converter at RapidShaft - ahem, Radio Shack :D - or any reputable store with a decent electronics department. Even then, computer video signals don't work very well on older TVs - it wasn't until a few years ago that many TVs allowed computer video component inputs.

Isn't the whole FOX Network off the air now for Time Warner customers? On the news on the 30th, the anchors were saying that it was unlikely FOX and TW would reach an agreement by 12/31 at 11:59PM.

I know one ad that FOX was broadcasting said that TW would show the bowl games and other big events, but, according to FOX, that totally breaks the agreement they have and is illegal or something.

TW was going to do a customer survey or something to determine if their customers wanted them to cave (i.e. keep fox) or "get tough" (i.e. ignore fox)

ETA: here you go..

http://www.dallasnews.com/sharedcont...2.4c0f4bf.html

Well, I just went to keepfoxon.com and apparently Time Warner caved.

http://static.keepfoxon.com/img/squa...ion/02/fox.jpg

They reached an agreement, I read somewhere.

About Sirrius/XM - I've have it for over 3 yrs. and LOVE it. CDs wouldn't be able to replace what I listen to - NPR, the comedy channels, Broadway, Martha Stewart and 40s. It boils down to something like $2.50 a week for me - well worth it! I can't stand standard "free" (you have to listen to those stupid commercials all the time - that's a fee as far as I'm concerned) radio anymore.

Oh, what a shock.