Wednesday, April 10, 2013

Dark Days in Television

Recent comments by News Corp president Chase Carey and other television executives hint at how dark the U.S. television business has become. Carey suggested that the Fox network could become a pay-TV channel if current laws don’t permit the network to extract programming fees from CATV operators and similar services based on shared antennas and over-the-air TV broadcasts. People with antennas were “stealing” the networks’ valuable programming, Carey said. Carey walked back his comments the same day, saying Fox was not about to cut off its broadcast affiliates or its over-the-air viewers, but I am sure anxious TV station operators were checking with their lawyers yesterday just in case. Meanwhile, a chorus of other TV executives made similar comments about the option of canceling all over-the-air broadcasting.

These may be empty threats, but it still shows the financial stress that television is in. It’s a situation that doesn’t make any sense from the outside. Commercial television gets about $2,000 a year from nearly half of the households in the country when you combine advertising and subscription fees. It takes in a trillion dollars every few years yet still can’t make ends meet. Just like the targets of some of its more shady advertising messages, television is desperately looking for ways to make extra money. TV executives seriously think you’ll pay $4 a month to watch a pay channel on which every hour of programming comes with 24 minutes of commercials — it’s not just Fox that thinks this. Perhaps a few of them are right, but 100 TV channels can’t all charge subscription fees from all the TV households in the country — there isn’t that much household income to go around, and TV has to compete for revenue with less pricey forms of entertainment, such as books, cinema, Internet, and live music.

We are headed, then, for some kind of shakeout in the television business. I can’t say what form that may take, but if the whole television industry tries to spend more every year on content while television viewers look for ways to spend less, something has to give.