After 9/11, I don’t think I saw a single commercial on network TV for at least 2 or 3 days after the attacks. Now, it seems that the television coverage with the war with Iraq will do the same thing.
Do networks lose a lot of money when these things happen? Do they have to refund the advertisers money or what? Could a network go bankrupt if many disasters happen in succession? i.e. at 9/11 type thing, followed by California falling into the ocean, etc. etc.
Yes, the networks lose money when they cancel commercials.
The answer to the rest of it is a bit more complicated. The US big networks are all very small parts of giant corporations: NBC - General Electric; CBS - Viacom; ABC - Disney. The health of these corporations is affected by many more things than the loss of a couple of days’ worth of commercial traffic.
And the news organizations are just part of the overall sweep of a tv network, which includes prime time programming, day-time programming, owned-and-operated radio and tv stations, sports programming, Saturday morning cartoons, online sites. Each of these can be making or losing money on its own.
In fact, the overall health of the networks has not been going well over the past several years as they keep losing viewers to cable. News in particular tends to be vulnerable right now. Both ABC News and CBS News have talked about merging with CNN to save money.
Bottom line, though, the networks are still valuable properties. They won’t go out of business very soon.
Exapno Mapcase is correct.
For the record, a TV network can go eventually go out of business (go dark) if it doesn’t make enough money, just like any other business.
Remember the DuMont network.
Because I was slow in posting, I can only add a cite
http://www.nypost.com/business/71164.htm
And for the record, Viacom’s television group (which includes CBS and UPN) had revenues of $2.1 billion in the 4th quarter of 2002.
The Washington Post reported the other day that during the aftermath of 9/11, the networks each lost $1 million per day that they pre-empted commercials. There is only so long they could sustain losses like that.
We can only hope…