Network Bailout or Blow it Up?

With all of the attention focused on newspapers and their troubles, few have noticed that the 4 broadcast networks are in pretty bad shape as well. Their share of consumer television time is dropping at the same time advertisers are cutting back on their TV ad spend budgets as those dollars shift to new media marketing programs.

Some executives are now talking about something dramatic, the idea that it’s not necessary to have an affiliate network supporting local regions and cities as part of a broadcast network. This is exactly how cable channels operate, they sell their feed to cable operators and bypass local presence altogether.

Meanwhile, should one of the nets decide their hefty broadcast infrastructure no longer makes sense, they could go for the most drastic idea of all, one that then-NBC honcho Bob Wright first dangled more than 10 years ago: Dump the network model entirely and turn your broadcast network into a cable one.

[From Needed: Network bailout? - Entertainment News, TV News, Media - Variety]

Lost in the debate about the future of television is the fact that the average American is watching more television than ever, 142 hours per month. Parse those numbers a little more and it’s clear that while Americans are watching a lot of television per month, they are watching less broadcast network television. This shift is not new, broadcast has been under assault from cable for 30 years but now we are seeing what could be the fatal fractures in the broadcast business model just as we saw technology expose the fragile underbelly of newspapers.

The reason I find this interesting is less about the medium and more about the business of news in general. More Americans get their news from television than from newspapers, but online eclipses both of these medium. To be fair, it’s not a zero sum game, we get our news from all 3 sources whether deliberate or not, and much of what is online is coming from newspapers, but when it comes to trust it is online that clearly outshines all others.

A Zogby poll released last week revealed that people surveyed declared the web to be more reliable than television for news by a ratio of almost 2:1, and when it comes to newspapers the numbers are so skewed that it doesn’t even warrant surveying them anymore. This does reveal in inconsistency though because even online people are consuming news from broadcast and newspaper sources, so the reliability factor more likely suggests that people are using the web to multi-source news events rather than relying solely on what the NYTimes or the Tiffany network reports on.

The elimination of local affiliates would essentially drive the broadcast networks out of news altogether, something they make very little money on anyways. However, it could also drive additional investment in their cable networks in the form of local news from multiple sources instead of their local affiliate alone, and it would also greatly enhance the positions of cable operators to be the syndicator of local news much like a bureau or wire service.

In the end, all this could be goodness but the process to get there is going to be painful, ugly, and massively disruptive. We are struggling with a shift in media and audience behavior that comes around once in a lifetime, if not once in a century.