Wednesday, June 16, 2010

Network spending shows why free TV isn't dead yet (AP / LA Daily News)

So why are the TV networks spending tens of millions of dollars more on prime-time dramas and comedies for next season than they did in the last season? What's in it for the companies, when even Fox, No. 1 among viewers in the key demographic of 18- to 49-year-olds, eked out just 3 percent of the total operating profit reported by Rupert Murdoch's News Corp. in the last quarter? ...
* Even though the profits may be slim on the broadcast segment alone, other areas of media companies enjoy the benefits.
* The most expensive shows that generate the largest audiences are usually developed on broadcast TV before migrating to cable channels.
* The benefit of hitting a home run outweighs the cost of a few strikeouts.
* Broadcast television is developing sources of revenue that were once exclusively the domain of cable networks. That also helps justify new spending.
* Broadcast TV, not cable, remains the easiest way for advertisers to get their message out quickly. And now advertisers have more money to spend.

No surprises here, but it's definitely yet another example of the bottom line taking precedence over quality, where I think we all know cable has been kicking network ass for quite some time.

Read the full article here.

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