‘Reverse musical chair scenario.’ — A scurvy elephant
When Ted Harbert [president and C.E.O. of the Comcast Entertainment Group] talks about television, it’s with the sober clarity of someone who has looked at life from both sides now and has seen that only one business model is working. Cable networks target just those viewers who want what they have to offer. Broadcast networks want everyone. And the business of wanting everyone has never been worse. At the end of last season, ABC, CBS, and NBC reported their smallest combined audience ever, an event that has become a gloomy yearly occurrence. Meanwhile, cable—counting both basic channels and pay services like HBO and Showtime—now receives 55 percent of the total viewership. (…)
It’s unlikely that a broadcast network is ever again going to create a megahit like The Cosby Show, which at its mid-’80s peak drew as many as 50 million viewers an episode. For several years now, TV’s top event has been Fox’s American Idol. Last season, it drew 28.8 million viewers a week.
Conversations about the future of television tend to vault way past next week or next year into a world where schedules don’t exist and 10,000 programming options are all available at any moment, half of them fully interactive. (…)
It sounds like fun. But in reality, the number of cable channels has topped out. And the number of households that subscribe to basic cable—about 65 million—hasn’t budged for a decade. That’s roughly 58 percent of all American TV households and it’s a much higher percentage of the total households that advertisers actually care about. People who have something to sell are attracted to viewers who have already demonstrated their willingness to buy something (like cable TV). The cable business is booming: Annual advertising revenues have jumped from $8.1 billion in 1997 to a projected $28.6 billion this year. (…)
The notion that the “500-channel universe” is a pie being cut into ever-tinier slivers ignores the fact that the vast majority of what we watch fills the coffers of a small handful of megaliths, just as it always has.
Take a closer look at that pie:
• Besides Bravo and Sci Fi, NBC Universal also owns USA, the highest-rated ad-supported cable channel; MSNBC; CNBC; ShopNBC; Oxygen; Telemundo; and one-third of A&E Television, itself a conglomeration that includes A&E, the History Channel, and the Biography Channel.
• Disney owns ABC, ESPN, SoapNet, ABC Family, its own one-third share of A&E, and half of Lifetime. It also, of course, owns the Disney Channel, the top-rated basic-cable outlet of any kind.
• Viacom and CBS, though now traded separately on Wall Street, are both controlled by one man, Sumner Redstone. CBS owns Showtime, the Movie Channel, and half of the CW. Viacom’s list of properties includes MTV, VH1, Nickelodeon, Spike TV, BET, and Comedy Central.
• Rupert Murdoch’s News Corp. owns Fox, Fox News, FX, and, well, everything with the word Fox in it, from Fox College Sports to the Fox Reality Channel.
• Time Warner owns the other half of the CW, as well as CNN, TNT, TBS, TCM, HBO, Cinemax, the Cartoon Network, and TruTV (formerly CourtTV).
So a half-dozen companies own not only five broadcast networks but also a majority of the cable channels that anyone actually watches—including all 10 of prime time’s highest-rated cable networks, which together accounted for more than 18 million viewers a night last year. To anyone worried about where network viewers have gone: They may have left the building, but they haven’t escaped the compound.
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Despite overseeing NBC, the network of Cheers, Seinfeld, and Friends, Jeff Zucker [C.E.O. and president of NBC Universal] is relentlessly focused on the future. He is unsparingly harsh about the prospects for broadcast television—gloomier than any other TV executive out there. In his view, the era of growth in network TV, the period of the megahit, is over. Growing his business, then, means investing in cable, digital video, mobile—anything other than network TV.
In cable, Zucker has gone on a multibillion dollar acquisition spree, buying Oxygen last year for $925 million, the Weather Channel in July for $3.5 billion and, moving into the international markets, a $150 million stake in India’s fast-growing NDTV network this year.
In digital media, he acknowledges that nobody is sure how digital content will be displayed, viewed, and, most important, monetized. So he’s trying just about anything to see what sticks. In March, he partnered with Fox to provide NBC content for free on a video-streaming site called Hulu. And he’s experimenting with all sorts of new distribution channels, with screens of all sizes in unexpected places—spooning out a few minutes of NBC content to video displays on gas pumps and in the back of taxicabs.
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