Can things work so neatly for the networks in real life? CBS, ABC and NBC have seen their share of the viewing audience slide steadily from 91 percent in 1978-79 to 61 percent last season (chart). The rapid growth of cable television and its networks, like USA, CNN and TBS, broke the networks’ oligopoly and presented channel-surfing viewers with an alternative to Yet another sitcom. But this year there are signs the networks are waking from their slumber-and in fact making a case that mass deliver-v, backed by lots of cash, carries clear advantages in the coming age of hundreds of channels and other video choices. In the season just concluded, ratings rose for the first time since the late ’70s, while cable’s audience remained flat, at 22 percent. Financially, the networks are reporting hefty profits, while the archenemy cable networks are suffering from weak programming, slow growth and the same ailment that first afflicted the big networks-too many viewer options. “Maybe the best way to put this is that network TV ain’t dead Yet,” says Betsy Frank, an advertising executive.
That’s not exactly a resounding vote of confidence for the future of the networks-nor should it be. The slim ratings gain for the networks-from 60 percent of the audience to 61 percent-was significant because it suggested a renewed stability for the networks. But that figure includes the Winter Olympics, whose record audiences were ballooned by the Harding-Kerrigan affair. Combined ratings of the networks’ regularly scheduled programming actually dropped slightly compared with the year before. Bob Sieber, a VP at Turner Entertainment Networks, quotes boss Ted Turner: The networks are like “the captain of the Titanic telling the passengers, ‘Don’t worry. We’ve sunk 200 feet but we’re going to turn the ship around’.”
But at least the beleaguered networks are still able to come up for air. Their survival strategy? Programming, programming, programming. Last sea son saw a solid number of successful new network shows, especially at ABC with programs like “Grace Under Fire” and “NYPD Blue.” NBC, while finishing third among the major networks. banished the fears of losing “Cheers” with its “Seinfeld” and “Frasier” hits on Thursday nights. CBS became the first network ever to win the ratings war in prime time, daytime and late night (thanks to Dave Letterman). Fox’s ratings dropped as it strayed from its youth audience, but its broadcast of the NFL football games this fall will help promote its programs. In a world of multiple viewing choices, “viewers don’t care what outlet they are watching, but they want to watch their favorite programs-and most of those are on the networks,” says media consultant Arthur Gruen.
The cable networks are clearly at a disadvantage in putting on shows that can draw the big audiences that advertisers love. For next season the Big Three broadcast networks and Fox commissioned 109 primetime sitcoms, dramas and other projects, each costing an average $1 million-and from them will select only about 25 to air. The cable networks can hardly afford such lavish spending. Although such cable networks as the Discovery Channel and MTV have produced popular programs like “Beavis and Butt-head” and have established identities for themselves, cable programming is still an unexciting mishmash; the top-rated show is often a CBS rerun, “Murder, She Wrote,” on USA. Says Warren Littlefield, president of NBC Entertainment, “We plow our dollars into original programming. That is not what cable does. They live off us for the most part and reruns of features.”
As the Olympics showed, the networks can also exert considerable financial muscle to pull off blockbuster events-and use them to promote other shows. They also have the unrivaled ability to exploit hit shows to publicize new ones. Tim Brooks, a senior VP at cable’s USA Network, concedes the advantage, pointing out that the networks can easily make half of the country aware of a new show while his network “struggles” to reach 20 percent.
If the networks appear to be showing new vigor, they’re also benefiting from cable’s weaknesses. The number of people subscribing to cable has slowed in recent years; 66 percent of all homes now get cable even though more than 95 percent have access to it. Many analysts think the number won’t rise considerably. The unending introduction of new cable networks also appears to be cannibalizing existing cable channels, like TBS and USA. Says NBC president Robert Wright, “The big ideas are out there already: all news, all sports, all entertainment. The new cable networks are getting more nichey.” CBS executive vice president David Poltrack argues that viewers dissatisfied with the mainstream broadcast networks have already left for cable.
That sounds a bit optimistic. The total television pie will continue to fragment and split the three networks’ share of the audience-and advertising dollars. There will be more cable networks, new satellite-delivered channels and, possibly coming as early as next year, more broadcast networks. Two new planned networks, The Paramount Network and WB Network, promise original programming, like “Star Trek” and cartoons. The even bigger to the networks, says NBC’s is a technological one posed by telephone and cable companies. Under this Information Superhighway scenario. they could gain control of the dial so that a viewer might have to navigate layers of information before viewing a network program.
But no one knows the dangers better than the networks. They’ve been cutting personnel and other costs for years to adjust to their smaller share. Recent regulatory changes will also allow them a chance to rein in their programming expenses which have remained high despite their diminishing market. Those changes permit them to own and produce programming and eventually get lucrative syndication fees-rather than be forced to pay high royalties to Hollywood studios. NBC and ABC have also been in a hedging-their-bets mode for a while, owning all or parts of numerous cable networks, like ESPN, CNBC and, NBC’s latest, “America’s Talking,” debuting in July. Wall Street analyst Tom Wolzien likens this strategy to Coke, which doesn’t care which brand you buy in an expanding soft-drink aisle, provided it’s owned by Coke. And, like Coke, the networks have tried to give themselves brand identities so channel-zappers might sample their wares. NBC flashes its peacock logo frequently and ABC bills itself as the family network. Still, many viewers would be hard pressed to say which network “Roseanne” is on (ABC, we looked it up).
By the year 2000, even if the superhighway is fully paved, the networks will still roam the landscape and attract a big chunk of the TV audience. They may be owned by different companies, or there may even be one fewer; rumors are always flying about a Ted ’turner or a Disney swallowing a network. But even in a world of hundreds of channels and interactivity, the networks’ role as the nation’s binding force-for both viewers and advertisers-remains potent.
