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12-29-2009, 08:41 AM
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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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12-29-2009, 09:55 AM
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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.
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12-29-2009, 10:26 AM
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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.
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12-29-2009, 10:43 AM
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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.
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12-29-2009, 10:46 AM
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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.
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12-29-2009, 10:49 AM
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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.
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Law and Order: Gotham - In the Criminal Justice System of Gotham City the people are represented by three separate, yet equally important groups. The police who investigate crime, the District Attorneys who prosecute the offenders, and the Batman. These are their stories.
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12-29-2009, 12:08 PM
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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.
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12-29-2009, 06:20 PM
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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.
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12-29-2009, 06:52 PM
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Quote:
Originally Posted by DrPhil
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.
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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.
Quote:
Originally Posted by xxstardust
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.
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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?
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Do you know people? Have you interacted with them? Because this is pretty standard no-brainer stuff. -33girl
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12-30-2009, 11:07 PM
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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.
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12-31-2009, 01:16 AM
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^^^
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?
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12-31-2009, 08:03 AM
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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.
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12-31-2009, 09:40 AM
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Quote:
Originally Posted by AGDee
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?
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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.
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12-31-2009, 11:47 AM
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I expect, over time, the same thing will happen to free radio, as more and more people get XM/Sirius.
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12-31-2009, 11:54 AM
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I need free radio because I REFUSE to pay for radio.
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