Commentary
Not-So-Novel Idea For Solving The TV Glut: Going Out Of Business
- by Wayne Friedman , Staff Writer, September 16, 2015
So here’s the real question: Should some networks and TV programmers go out of business?
Given the general weakening of traditional TV viewership across all platforms, one report suggest this would save businesses time and money. Credit Suisse says: “With ratings for some ‘generalist’ cable networks down cumulatively 40% to 50% over the last three years, we are surprised to see so little rationalization across the industry.”
Credit Suisse believes TV network groups that close down money-losing -- or lackluster -- ventures will be rewarded by investors.
This comes following a warning a few weeks ago from John Landgraf, CEO of FX Networks, who was concerned about the unsustainability of some 400 scripted shows presently in the market: that is is impossible to garner enough long-term fans for each series to make money.
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But what Landgraf didn’t talk about was the underpinnings of those shows: Broadcast and cable networks that depend on the revenue of fewer and fewer TV franchises.
For its part, the Credit Suisse report blamed the glut of “generalist” cable networks -- those mainstream entertainment channels. The trouble is, almost any and all cable networks can fit into this category -- especially among the top 20 networks -- from the likes of MTV, USA Network, E!, TNT, FX, Bravo, A&E Network, and Oxygen, and others.
Not only that, but those “generalist” cable networks typically bring in the most money, from advertising revenues and affiliate fees.
If it is all about TV shows -- and their survival -- the future may just point to Netflix, a quasi-TV network where consumers are allowed, if not encouraged, to blow through a season worth of episodes over a weekend.
Fewer networks; TV shows not necessarily attached to networks; and increased overall TV consumption. Where does that take us?
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
Wayne, why should any networks or stations or cable channels drop out of the runniing uless they are not making a profit? The fact that the proliferation of channels and "platforms" is fragmenting the audience---not diminishing it in total, merely dividing it up in ever finer slices---does not prevent the majority of these channels from being profitable under their various business plans. If you look at the number of marketed product/service brands out there there has been a quantum increase over the past 25 years, and in many categories, as new brands arrive on the scene, share of market fragments--just like with TV ratings. Yet, no one is suggesting that many of these brands should go away.
I think that we are misreading the tea leaves when it comes to TV audience fragmentation and the growing number of entities competing for viewers. Ultimately the latter will decide whether a channel can make money via advertising alone and many chnnels have found a way---by developing multiple revenue streams and new sources of income, as well as altering their program content---more ads, more reruns, cheaper forms of programming, etc.--- to continue as profitable ventures.