Keiichi’s Weblog

Introduction

In this paper, I would like to discuss specifically the progression of the television industry. Recently, as new technologies have drastically changed the landscape of the television industry, concerns about the existing television industry are increasing. April of this year, NBC recorded the worst rating week for last twenty years. CBS “Survivor” experienced the least popular season since its start. The audience of ABC’s “Lost ” used to be 10 million, but they have nearly half as many viewers now. Through March to April 2007, the total audience of ABC, CBS, NBC, and Fox were 2.5 million fewer than the same time last year. (Bauder, 1)
The reason for this decline? The home entertainment environment has developed at an amazing speed and television is no longer he king of home entertainment. The major networks are now surrounded by so many competitors, such as cable channels, rental videos and DVDs, the Internet, and video game machines such as Xbox and Wii.  Also, growth of digital recorders such as Tivo, are changing the audience’s television viewing behavior. The market share of viewers and therefore, the revenue they bring from the advertisements for the traditional television industry is on the decline.

Many recent inventions such as Tivo and Digital recorders are changing the people’s behavior in watching television. Those new technologies allow viewers much broader freedom in viewing television programs. In short, they do not necessarily have to watch or videotape a program at the time the program was aired. They can watch programs at any time, at their convenience. This gradually makes the prime time broadcasting lose its viewing power.
A study conducted by Business Week shows that in the 1960s, an advertiser could reach 80 percent of adult American women by simply buying a prime spot on all three networks. Today, reaching the same group would require advertising on 100 different channels. (Greenblat,2)

Looking back to its history, the television industry has been exposed to several adversities since the start of commercial broadcasting, challenges by new medium such as cable television, and the home video market. I would like to take a look at the history of the television industry.

 
Past

In 1941, the FCC adopted RCA television standards. When World War II ended, there were only nine television stations and less than 7,000 working television sets in the nation. (Boyd,1)

The earliest television networks in the United States were actually a part of the larger radio network systems. (Boyd, 2)  They controlled only a few local television stations. There were four networks including NBC, CBS, ABC, and Dumont. At first, NBC began its operation in 1946, followed by CBS and ABC in 1949. In 1956, Dumont, the oldest network beginning operation in the United States in 1946, ceased its operation and ABC took over most of Dumont’s affiliate stations.(Anderson,1) Networks started centralizing their program production, distribution, and sales. This enabled advertisers to reach nationwide audiences. (Boyd,2) 1950 to 1955 was the time the sales of television sets reached its first peak. (Boyd,3)
　“Television in the 1950s was famously lucrative business for those who staked an early claim…a broadcast license bestowed upon a local station by the FCC was almost literally a license to print money, advertisers paid dearly for access to an audience that multiplied day by day” (Anderson,2)

Through the 50’s to the 60’s, the viewer’s behavior was totally different from now. Back then, the “least objectionable programming” theory was widely believed in the industry. In that, when viewers decided to watch television, but there was nothing particularly interesting to them, they chose a channel that was most acceptable, even if it was not what he or she really wanted to watch. This behavior had been dominant until cable television became common in 1980s. (Greenblat,2)

The Emergence of Cable television

In 1984, Congress deregulated the cable industry. As a result, it triggered many local phone companies to migrate to the cable television business. By 1988, (Greenblat, 3)50 percent of U.S. households subscribed to cable television. In my point of view, the availability of more than 30 channels affected viewer’s viewing habits drastically. They could become pickier in selecting programs. Hence, “least objectionable programming” behavior was no longer effective.and the networks’ advertising effectiveness was degraded by the emerging of the cable industry.
In addition to the regular cable industry, several competitors entered the television industry in the middle of 1980s  Pay Per View television became available and, VCRs were sold at a more reasonable price.  People became more  selective in choosing what they watched. The big three broadcast networks had a 91 percent share of prime time audiences during the 1978. This figure dropped to 75 percent in the 1986, and down to only 61 percent in 1993. (Boyd, 3)