Printer Friendly

Unsolved mystery: who's gonna produce.

For the first time ever, technology could work against the television structure as we know it. The same technology that created many "windows" of opportunity and "viewers' choice," could ultimately destroy what is referred to as quality production: Drama, miniseries, MOWs. Concurrent with this technological terminator, there seem to be other forces that could be tearing up the fabric of the present television structure: The need to focus on the 19 to 49 age group.

Even though this drastic assessment is contradicted by the still high profit margins of most TV stations, the record growth of cable TV networks and the large production budgets coupled with good financial performances by entertainment companies, the drought is upon us.

Optical fiber, video compression, multiplexing, interactive and digital transmission will indeed revolutionize television. The various forms of video distribution systems (nine at the last count) and the large number of video services (up to 30 on 500 channels) soon available will expedite this "revolution" (this is post "evolution").

Telephone companies, cable operators, interactive services and satellite carriers will have the potential of making huge amounts of money with related TV services (banking, shopping, video-dial, import of foreign DTH and DBS charged as a call, etc.) Of course, what is here viewed as catostrophic, could well become a gold mine for many companies.

J. Patrick Michaels of Penn State University anticipated that major advertising agencies will be investing in this technology along with electronic equipment manufacturers as well as some insurance companies and banks. Michaels reported that "some large funds are being created specifically to invest in [the video technology] industries on an international basis." He also predicted many "joint ventures between the owners of programming and the operators of the distribution systems."

The biggest unsolved question, however, is how the U.S., with its commercial TV nature, will be able to produce programs outside the inexpensive talk shows, game shows, funny videos, stand up comics, courtroom reports, etc. If current viewers' and rating's predicaments can be of any guidance, the U.S. television system is reaching its "critical" stage. With 60 per cent of the U.S. TVHH now receiving 30 or more channels, ratings are averaging a two in fringe periods and eight in prime time. Audiences are being further fragmented by more specialized services (weather, music, children, sports, news, etc.), copycat programs, non-entertainment services (home shopping, and soon banking and surveys), TV use for home video, video games, computers and, soon, videophone and possibly video gambling. So, the basis for changing the current TV structure doesn't, in effect, exist. The U.S. TV system will work perfectly well with the aforementioned low-cost shows and related and unrelated TV services. Producers of drama will have to adapt to the new reality, not vice versa.

Even though we are not at the crucial stage yet, the financial premises for producing the typical $1.2 million per episode TV drama is becoming increasingly problematic.

What could be slowing down this downturn is the fact that the 40 per cent of uncabled TVHH still represents a driving force (but an easy prey for wireless cable or MMDS). Another plus is that with an aging U.S. population, the 19 to 49 age group will no longer be the dominant force. Indeed, we're already seeing TV advertisers craving for the 25 to 54 age group. But, at the same time, out there in TV land there is a glut of TV ad time inventory that is making cash-syndication very problematic. Similarly problematic is the financing of production for barter-syndicated shows.

With ratings in the two to eight range, one could generate revenue of up to $250,000 per half hour, which is hardly enough to produce "quality shows." Coupled with this is the increasingly large number of TV markets needed to clear and the decreasing time slots made available.

Technology will help advertisers reach the "numbers" and demographics desired by simply buying into multiple programs. Technology will further aid advertisers in cutting media costs by keeping track of "avails" via computerized last minute buying. Interactive technology will additionally assist advertisers to better identify rating information. It is expected that CPM's (cost per thousand) will increase for specific target audiences, but it is doubtful that this increase will compensate for lower ratings,

Non-U.S. program sales could soon provide up to 5o per cent of the production budgets for drama, but such a windfall is not expected to last past the year 2002. First, because foreign broadcasters will increase their own production output and, secondly, because they too will have to fill their schedules with inexpensive talk shows, game shows, sports and variety shows.

It is possible that ad agencies, large manufacturers and major foundations will be producing or assigning "quality" productions to outside companies. These programs rights holders, in turn, could pay companies to syndicate them. It is not unrealistic to imagine foreign governments and special interest groups financing U.S. drama production.

It is also possible that the "window" sequence could change to a more efficient stream of revenue. For example, the $1.2 million per episode show could first be shown on PPV (also to assess its demographic and ratings strength), followed by traditional pay-TV, network TV, cable (wired networks) and syndication. Time shifts (multiplexing) could also provide additional airing fees. Nonetheless, these revenues, once added up, will still not be covering the production costs in today's marketplace.

Against this is the negative effect of a more diverse ethnic mix. Additionally, "viewer's flow" and "building blocks" dear to today's programmers, will be a thing of the past, since viewers will be making their own schedules with the remote control and VCR's automatic recordings.

Naturally, distribution companies still hope that production costs will go down to compensate for the reduced license fees. But, most likely, costs of TV drama production will be tied in with that of theatrical movies; Therefore, they cannot be easily diminished. As far as costs of other programs are concerned, they are not expected to go down until after production activity has temporarily reached a standstill.

Finally, those who question the practicality of filling some 500 cable channels need not worry. Recently, the announcement that viewers will be able to select from more than 20 college football games in one afternoon," or that a "PPV movie could start every 10 minutes" (a 120-minute movie would take 12 channels) has made the task feasible.
COPYRIGHT 1993 TV Trade Media, Inc.
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1993, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

Article Details
Printer friendly Cite/link Email Feedback
Title Annotation:television broadcasting
Author:Serafini, Dom
Publication:Video Age International
Date:Jan 1, 1993
Previous Article:Cultural exemptions are pro-Canadian, not anti-American.
Next Article:Catch word for FIPA means more than "quality." (Festival International de Programmes Audiovisuels)

Related Articles
Information rage: rating the TV raters.
MOWs exploding on many TV screens.
Witnesses to the Unsolved.
Beyond the bench: tracking clues with environmental health sleuths.

Terms of use | Copyright © 2016 Farlex, Inc. | Feedback | For webmasters