Why do we still have Television Networks?

Or, what exactly differentiates them (NBC, ABC, etc.) from the hundreds of ‘cable channels’?

I can only see two differences;

  • They provide local news coverage.
  • They provide over-air broadcast.

The second one seems an extremely diminished market. I don’t see why a ‘cable channel’ couldn’t add some level of local coverage (granted, at a cost).

The big networks still offer the largest potential audience for advertisers, partly because some customers do still receive their signals via broadcast instead of cablecast, and partly because cable companies “must carry” local television stations for free, and put them in the same low numbers where they’re found on the broadcast dial. They’re under no obligation to carry particular cable channels unless the channels pay, and it often costs extra for a “low number.” But the differences between the major networks, cable channels, and other outlets like Netflix are being constantly eroded. Networks still benefit from synergy between headline live event programming (mostly sports) that draws a large audience and can be used to promote other shows on the same network. They can use their local “news” operations as essentially publicity arms to promote their entertainment ans sports offerings. And network programming tends to have a wider appeal and be less “edgy” than cable, which is a draw for some individuals and families.

People have been writing the obituary of broadcast networks fro 20 years, but they are clearly in decline.

There’s at least one “cable channel” that does add a level of local coverage – The Weather Channel (i.e., their “Local on the 8s” local forecasts, and emergency weather announcements). Even that, which is largely (if not entirely) automated, requires TWC to have a dedicated computer system at every cable company “head end” (i.e., local network location). For, say, a CNN or Fox News to provide local news content in every market (or even just the major markets) would, indeed, likely be a huge cost, and one to which I suspect they’d not see any real upside in pursuing.

According to this article, while the percentage of U.S. households who rely solely on over-the-air TV signals is now small, and continues to slowly decline, it’s not zero (it’s currently at 7%).

Part of why we “still” have the major networks may well be inertia. The networks each have literally hundreds of local affiliates, and that infrastructure isn’t likely to be abandoned any time soon without good reason.

There is some local news coverage provided by cable–in New York, Time Warner Cable runs a pretty good 24-hour news station called New York 1. I think there are some similar operations in other places, but it’s for sure there’s not enough demand to support 24 hours of local news in, say, the Bismarck, ND market.

You’re thinking of a TV network as a top-down organization. It makes much more business sense to look at it as a franchise-type operation, where hundreds of local stations band together with a national source of programming (and advertising.)

Each local station has its own local sales staff, which uses the audience delivered by the national and local programming to sell time to local advertisers. In turn, the programming of the local stations (news, sports and sometimes other) produces a bigger audience for the national networks than just the national programming would generate.

Also, not everyone has cable, still. In some areas, there’s a surprisingly large number of homes that don’t get cable or satellite – Milwaukee 22.2%, Houston 18.6%, Minneapolis, Dallas and Kansas City, all >15%, etc.

Cable channels could provide local content. Obviously the Weather Channel does. HLN tried having local headlines in at least one of their formats, but overall it hasn’t been particularly successful.

TWC also does local markets other places. In NC, Charlotte and the Raleigh-Durham-Chapel Hill area both get 24-hour news channels. Admittedly, some of the statewide content is shared between them.

Your post reminded me – Chicago has a 24-hour cable news station, as well: CLTV. However, it’s owned by the Tribune Company, and shares a lot of its resources with WGN (the Tribune’s local TV station, which also operates a cable superstation), and the Chicago Tribune. The Tribune Company is apparently looking at divesting itself of its newspaper operations; it’ll be interesting to see if that has an impact on CLTV.

The big networks still hang on with the economy of scale factor - the combined market of habitual viewers over the entire country is large enough that the rates they charge advertisers can pay for programming. By contrast, if you want to make Game of Thrones or Sex and the City and you don’t have 50 million viewers to sell to your advertisers, or you want to skip ads (yeah, right) you have to convince those people to shell out a significant amount of extra money each month.

So like magazines, newspapers, bookstores, CD music stores, etc. - their ability to survive is being whittled away by the itnernet 9and cable TV) bit by bit. However, for some programming they are the only one who can deliver the audience needed.

Consider, for example, a show like American Idol or Dancing with the Stars. That only really works if they can reach everyone in the USA, it lives on audience participation. If it went on a pay channel, it’s automatically limited to the few million who subscribe.

OTOH, reality TV is exactly what’s wrong. I floods cable TV because it’s cheap, and it’s been dominating network TV because… it’s cheap.

That raises another problem. Who would provide local programming? Obviously CNN and Fox News can’t do it; just like the national networks, they can’t afford to put 200 local news bureaus all over the country. Your local cable company probably isn’t the only cable company that serves your entire area. If TWC produces their own local news, that doesn’t help U-Verse customers or the people in the next town over who have Comcast.

So that leaves the job to a local, non-cable network, non-cable provider organization. Like, say, a local TV station. And you’re right back where you started.

Local news coverage is indeed a problem. Just look at what’s happening to newspapers. And so far “microblogging” does not seem to be filling the gap. Then again, local TV news ain’t all that anyway.

The local affiliate might show national programs from 7am-9am (national morning show), 6pm-6:30pm (the national news) 8pm-11pm (prime time programs) and from 11:30pm-1:30am (late-night talk shows). They might also show the national game shows or soap operas during the day. The rest of the day the affiliate is showing whatever makes it money. And even during the network programs, part of the commercial time is sold locally.

Actually, there’s been a resurgence of people sticking up antennas and receiving broadcast television. When the TV stations went digital a few years ago, you gained the option of receiving digital quality over the air. Most people who are doing this are doing it in reaction to cable TV prices, and are basically using the antenna to supplement the entertainment they get through streaming services like Netflix and Hulu with broadcast TV for local and “real time” programming. $9/month Netflix subscription + free broadcast vs. $80/month cable or dish? Of course, if services like Aereo ever gain traction, you won’t need the antenna.

Over here we have the cable networks and people like Sky who also do satellite broadcasting. Of course we are very much smaller geographically so one satellite easily covers the country.

Personally I have FTA with a Humax box as a PVR. My TV has a decoder as well, and can receive HD transmissions. The main advantage that Sky has is that it controls much of the sport. Since I am not a sports fan, this is no loss to me.

My broadband is via a twisted pair, but only from the box on the pole outside. It is cable to there courtesy of the telephone company. We also have Virgin cable in the street if I wished to use it. All these companies try to sell packages with telephone, broadband and TV all tied together. My TV can connect to my network and stream from the BBC and other broadcast channels.

The problem with all this fragmentation is as described above. If the programmes don’t attract big audiences they won’t get the funding. If a channel only has a small audience, it can’t comission original content. We get a lot of American TV over here.

Third difference;

  • They’re free.

To the viewer anyway. Some people just don’t want to pay $100 give or take each month to watch TV.

We still have television networks because they still make money. I don’t know of any company ever that closed its doors just because someone else COULD do what they are doing. The market for television viewing is big enough to support many major players . The television networks won’t go away until they stop making money.

I am sure I don’t understand the question.

Is the question one of transmission methodology? analogue aerial / digital aerial / digital over data network?
Is the question one of locality of content and programming?
Is the question one of business structure? large organisation / small local entity
Is the question one of funding? pay to view / government supported / corporate sponsorship / paid by advertising / combination of the above

To my knowledge (and I stand to be corrected), the structure of the US television market is different from other parts of the world. The same cable/broadcast paradigm just didn’t exist where I grew up and doesn’t really exist where I live now. There are a large number of different options possible and the market will develop according to what is most profitable which is determined by infrastructure already in place, consumer demand and where the money is: as well as a certain amount of government regulation in some parts of the world.

I submit that the future of television will mirror what has happened in in-flight entertainment. In the past there was one movie played to all. Then a number of different channels were available and individuals could choose which they wanted. Now we have individually streamed feeds and users select for themselves what they want.
I believe in TV there will be a tendency for more material to be sent over data networks to individuals with users having full autonomy. Set-top boxes and PVR will have their day and disappear as networks get up to speed. Advertisers will get their hand in and probably slow the transition because users will not choose to watch advertising given the option.

It is likely that there will always be a place for passive viewing and hence programming of some kind. (People still listen to the radio even though we can carry a gazillion songs around with us and choose what we want to listen to.) There will also be a place for subsidised special interest programming such as educational material, certain documentaries and programmes designed for minority indigenous groups and the like.

I think the dichotomy set up by the OP is false. Like any market, TV will follow money, public demand and technology. There are a large number of different places that it could end up and its future form is likely to be different in different parts of the globe.

Kevin Spacey talking about House of Cards on Netflix is relevant here. http://www.youtube.com/watch?v=P0ukYf_xvgc

To be sure, broadcasting will have to adapt. It may happen in the future that material is individually selected for view. It may happen that little or no material is sent out over the airways and most or all viewing happens via data networks. But broadcasting is here for a while. These are mega-organisations competing for entertainment dollars. They aren’t just going to roll over and die because the playing field changes.

FWIW, my ‘cable’ is essentially free. We have FIOS. With their ‘triple play’ I pay the same for tv+internet+telephone as I used to pay for just internet and telephone.

Lots of the programs that I like, and watch on cable channels, were actually produced by one of the big networks. So networks survive as a provider of content, not just local news. I’m sometimes surprised that the networks sells so much of their old programming to the cable channels. If they didn’t do that, I’d guess a large portion of the “competition” cable channels would just go away due to lack of content.

TV Networks themselves actually produce very little content. Most of it is made by production companies, some of which are part of the same media conglomerates that own networks, but most of them aren’t. The production companies license the shows to the networks. And it’s them, not the networks, that get to syndicate the shows if they’re successful.