Commentary
Bewkes: Broadcast Nets Need Carriage Fees -- The CW, Too
- by Wayne Friedman , Staff Writer, November 11, 2009
"The broadcast networks have fewer people watching, for shorter times of day, lower and declining ratings; they have reducing revenue from advertising, they have declining programming budgets and lower earnings, so they have fewer of the scripted shows than they used to have," says Bewkes, chairman and chief executive officer of Time Warner.
"So therefore their business model is becoming increasingly not viable," he adds. "If you look at broadcast networks, which are the only ones in TV that have 'free' aspect, if they don't get some form of carriage fee, they may not survive."
This also goes for the CW -- we're assuming. That small broadcast network is co-owned by Time Warner (along with and CBS Corp.) CW isn't highlighted in earning call conversations, which instead focus on HBO, TNT, TBS, and CNN.
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Media analysts have speculated that NBC, under the control of cable system giant Comcast Corp, would definitely be a candidate to transition into a cable network -- or least get a sizable monthly fee for its TV stations and affiliates in the form of retransmission fees.
The troubled network needs it more than most. But it wouldn't be the only one in this category. Surely next on the list would be CW.
While the network has seen a turnaround of sorts over the last two seasons, there's still a long way to go -- with the necessity of a dual revenue stream more crucial than ever in the coming years.
Somewhat close competitors to the CW, such as MTV, VH1 and ABC Family, already have this financial model.
Bewkes is right to talk about the need for "branded networks." He points to Time Warner's own TNT, for drama; TBS, for comedy; MTV, for "young lifestyle and music"; and Discovery for "nonfiction" programming. On the news front, he says. CNN is "broad journalistic fact-based news," and Fox and MSNBC have "their own points of view."
CW is branded as well. Time Warner and CBS will increasingly need to let cable operators know that in the near future.
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
It's like the car companies...it's all about the product. When Burn Notice and White Collar are better than the network shows, but they're on cable, people will tune in. Time for a content change and a realization that men will watch TV, something that seems to escape the networks for some reason.
I believe a smart strategy would be to copy ESPN and have a CBS2, NBC2, ABC2 and Fox2. Then they could be both a traditional network and a cable channel as well. Why let Discovery have all the fun?
In the end, the consumer will be paying and paying. It's that paying that is becoming unaffordable. Maybe the revolution won't be televised via the TV set.
The networks already had the opportunity for "(network name)2". It's called retransmission consent. NBC2 is called MSNBC. ABC2 is called ABC Family, ESPN2, ESPN Classic, etc. Fox2 is called FX. CBS was late to the party, but if memory serves, CBS2 was called CBS Eye on People, which was sold to Discovery to become Discovery People, from there to become...Discovery Health? And that's just the network Owned & Operated's. Scripps2 is called HGTV, ProJo2 is called Food, etc. Cable operators were required to carry the new services as a condition of continued carriage of the affiliated broadcast stations. I see all the commercial networks becoming more like cable networks--distributed by cable and satellite operators in exchange for affiliate fees, with local avails for sale by the local cable operator. Return the broadcast spectrum to the people (after all, WE own it, not the broadcasters) for a more efficient use.If there is a market for real local programming (news, traffic weather), entrepreneurs will spring up to fill the void--as many already have.