Electronic media overview: Television

Television

HISTORY

During the 1920-1930s, two American inventors helped lay the foundations for television in its early development, Philo Farnsworth and Vladimir Zworykin.

The FCC halted development of TV during WW II, but after the war TV got a big boost as technology developed during the war was applied to the new medium. Equipment became less cumbersome and costly, and the number of new stations grew dramatically. In 1946 there were ten stations and 8,000 homes with TVs, but just ten years later there were 100 stations and 35 million TV households. Growth was so rapid by 1948 that the FCC imposed a freeze on new station licenses that would last for four years while the government worked out technical standards for the emerging TV industry. By 1952 the FCC established foundation rules to minimize station interference and decided that 12 VHF and 70 UHF channels would be reserved for TV.

The 1950s: Networks, Tape, UHF, and Color

TV's early structure was modeled after radio. Local stations provided service to their communities and, in turn, might be affiliated with networks. Most programs were broadcast live from New York or filmed in California. In 1956 the Ampex Company solved the "storage" problem with the invention of video tape; by 1960, most programs had switched to the video tape system.

The promise of UHF channels, however, failed to materialize largely because new TV sets did not include built-in UHF receivers; as a result, public attention and advertising dollars remained with the more powerful VHF stations. Also by 1960, NBC began broadcasting in color for about three hours a day, an advance helped along by their parent company, RCA, who concurrently began marketing color television sets.

The Golden Age of Television

The growth and experimentation period of the 1950s became known as TV's "golden years," a time wherein every show type was a pioneer, such as Ed Sullivan’s Toast of the Town variety show, Milton Berle’s Texaco Star Theater, and high-quality drama such as that from Studio One.
TV later introduced a new genre: the adult western (wherein character and plot took precedence over gunfights), the most notable example being Gunsmoke.



Coming of Age: Television in the 1960s

By 1960 TV sets were in 95 percent of all American homes. In 1963 network news expanded from 15 to 30 minutes, and the public began depending on network news as a trusted source. Among the more significant events of the 1960s which TV journalism excelled was coverage of the assainations of JFK, Martin Luther King, and Bobby Kennedy. Network news also got high marks for their coverage of the Civil Rights movement and the 1969 live coverage of Neil Armstrong’s historic moon walk. JFK’s assassination, however, fostered a negative reaction against violent TV programming; partly in response, the networks began airing escapist fantasy shows such as My Favorite Martian, Bewitched, and I Dream of Jeannie.

About 69 educational stations were on air in 1965. Two years later Congress passed the Public Broadcasting Act of 1967, which set up the Public Broadcasting System (PBS).

The 1970s: Growing Public Concern

Public concern over TV program content grew dramatically during the 1970s, highlighted perhaps by a Surgeon General’s Office study that investigated the impact of exposure to TV; the panel found a modest connection between heavy TV viewing and violence among some children.

The 1970s also marked the first time that citizen groups, such as the Action for Children’s Television and other coalitions of minority groups, became interested and involved in shaping FCC policies. Trying to reduce the networks’ power, the FCC introduced the Prime Time Access Rule in an attempt to expand program diversity by requiring stations in metro areas to schedule their own programming between 7:30-8 p.m. E.S.T. What happened, however, is that local stations simply ended up filling the time slots with made-in-Hollywood syndicated shows.

The 1970s also marked the first serious programming competition for the networks from the emerging cable TV industry, a fight for viewer time and ad dollars that continues to the present. Programming trends during the 1970s started with a heavy emphasis on crime drama (The FBI and Charlie’s Angels), then switched to adult situation comedies (M*A*S*H and All in the Family), and finally ended with the emergence of prime time soap operas (Dallas and Dynasty).

The 1980s and 1990s: Increased Competition

The biggest trend during this period was the continuing interests of viewers in new networks and cable channels (the networks commanded 90 percent of prime time in the early 1970s, but only 60 percent ratings by the mid-1990s). This period also saw the start of three new networks, Fox, United Paramount Network (UPN), and the Warner Broadcasting Network (WBN).

Cable’s Continued Growth

By 2000 cable was reaching more than 68 percent of the population, a growth characterized by a tremendous development in special-interest channels such as six pay-per-view services, six premium channel services, and more than 75 separate cable networks. Major companies have continued to switch significant amounts of their ad budgets from broadcast TV to cable, now making cable TV a full-fledged competitor to traditional broadcasting.
Zipping, Zapping, Grazing, and DBS

More than 90 percent of US households had TVs and VCRs by 2000; second only to TV, the VCR became one of the most quickly adopted appliances in US history. Already it’s had a major impact on both broadcast and cable TV. Among its effects:

. cassette movie rentals have become a multibillion-dollar, Hollywood-symbiotic business
. the VCR encourages timeshifting (taping a program for later viewing)
. advertisers have begun raising some concerns about the VCR user being able to:
. zap commercials (VCRs that automatically ignore ads when taping programs)
. zip by commercials (fast forward through unwanted program parts, usually ads)
. grazing by using a remote control to scan channels during program down time (ads)
The 1990s also marked the serious advent of Direct Broadcast by Satellite (DBS) backed by two firms, Direct TV and United States Satellite Broadcasting (USB), who offer their 15 million subscribers some 150 channels over 18-inch diameter receivers.

The Telecommunications Act of 1996 also introduced a TV program rating system followed by the V-chip, a built-in device that helps parents regulate what programs are made available to their children. On the programming front, the mid-1980s saw a return to family-oriented sitcoms such as the Cosby Show and Family Ties. The biggest programming trend in the early 1990s was the growth of prime-time newsmagazines such as 60 Minutes , 20/20, and Dateline; these shows attract strong audiences and are usually cheaper to produce than sitcoms or dramatic series.

A big surprise to network producers were the success of the revived game shows (Who Want to Be a Millionaire and Weakest Link) plus “reality” programs as embodied by Survivor and Big Brother. With parallel success, two cable shows regularly pulled in strong audiences as well, The Sopranos and Sex and the City.


TELEVISION IN THE DIGITAL AGE

Television’s digital age began on April 3, 1997 when the FCC adopted rules that regulated the way TV signals should be transmitted. With digital television (DTV) an image is still scanned as it is in the analog system, but the resulting signal is encoded digitally, each pixel on the TV screen assigned a binary code to recreate that particular screen spot’s color and brightness.

The FCC’s ruling mandates that all full-power TV stations must convert to digital transmission by 2003. Broadcasters are required to broadcast programs in both analog and digital formats from that year on until all the older analog transmitters are shut down. The goal for complete transition is 2007, but even then the old analog signals will still be broadcast in an area until more than 85 percent of viewers can receive the new signals. Although the standards apply only to traditional broadcasters, cable companies and DBS systems will support them as well.

Among the advantages of digital TV are clearer pictures, better sound, and a new theater-like horizontal screen format (letterbox). Broadcasters can use part of the digital signal to transmit high definition television (HDTV) to give TV viewers parity with the clarity of 35-mm motion picture film. Instead of using the digital bandwidth to transmit HDTV, a station might instead switch to lower definition signals and offer four simultaneous programs (the viewer might see four mini screens when first accessing the channel, then click on the program chosen to watch). Moreover, digital TV can send and receive e-mail, provide Internet access, and transmit data such as specialized program guides that a viewer could then print out at home. For the time being, however, both digital and HDTV are hampered by high equipment costs. DTV will almost certainly speed up the merger between home TVs and PCs, not to mention blurring the difference in their respective applications.


DEFINING FEATURES OF TELEVISION

Like radio, TV is a universal medium, installed in about 99 percent of all US homes and it is turned on about seven hours a day. TV is also the dominant US medium for news and entertainment. And TV is an expensive medium, especially in network programming. A single one-hour prime-time show might cost upwards of $1.5 million, and the total tab for all network evening shows is more than $2 billion. A 30-second prime time ad can run about $100,000.

TV’s audience also continues to fragment, with audiences increasingly attracted to highly specialized channels and cable networks (cooking, religion, sci-fi, health, romance, shopping).


ORGANIZATION OF THE BROADCAST TV INDUSTRY

Commercial television systems earn revenues based on advertising; noncommercial systems get their income from a variety of sources. TV stations are licensed by the FCC to provide services to a particular community, called markets. There are 210 markets in the US, and seven networks supply programs to local stations:

. ABC, the American Broadcasting System
. CBS, the Columbia Broadcasting System
. NBC, the National Broadcasting System
. Fox Broadcasting System
. UPN, United Paramount Network
. WBN, Warner Broadcasting System
. Paxnet

PBS, the Public Broadcasting System, serves the non-commercial television system.

When a local station signs a contract to be part of a network, the station is then called an affiliate of that network. Each of the three major networks has about 200 affiliates. Local stations that do not have any affiliation are called independents.
Like the film industry, television is divided into three segments:

Production

Stations can get programming from up to three sources.

. local production: sports and news, typically the biggest revenue source for local stations

. syndicated programming: created by independent producers and sold to local stations,
including such programs as Jeopardy, The Oprah Winfrey Show, and Inside Edition

. network programs (for some stations): networks supply 65-70 percent of the programming
carried by affiliates (some of these programs are produced by the network themselves, others
are produced by independent production companies and then sold to the networks)

Distribution

The three major distribution outlets are:

. broadcast networks
. cable networks
. syndication companies

Somewhat simplified, a network-affiliate contract says that a local station agrees to carry the network’s programs, and in return the network agrees to pay the station a certain amount of money for clearing its time so that the network’s programs can air (in return, of course, the network gets to use the built-in advertising time for its own use, usually featuring nationally oriented ads). The amount of money a network must pay is partially determined by market size

Cable networks upload their programs to satellites, which i are then downloaded to local cable systems. The local system then distributes the programs to its geographical area.

Syndicates provide tape, film, or satellite downloaded programming (from themselves or from other independents) to client stations; the local stations that buy a syndicated program receive exclusive rights to show that program in their market area. Syndication also serves as a profitable aftermarket for prime time TV series; some original networks series are even produced at a deficit, the gamble being that final profits won’t show up until after syndication. Usually a syndicate wants at least 100 episodes of a series before sending it back out to the market.

Exhibition

At the start of 2001, there were some 1,300 commercial stations and 365 non-commercial TV stations in the US Some stations broadcast in the VHF (very high frequency) range through channels 2-13, while others use the less powerful—and historically less desirable—UHF (ultra high frequency) through channels 14-69. These differences have meant a lot less, however, since the advent of cable, and will mean even less with the advent of digital TV.

TV Online

The primary purpose of broadcast network, local station, and cable network web sites is to promote programming and to offer news, information, and entertainment, as well as related links to other web sites.


OWNERSHIP

As of 1998, all but one of the major networks were under conglomerate flags:

. NBC owner: General Electric
. ABC owner: Walt Disney Company
. CBS owner: Viacom
. Fox owner: Rupert Murdoch’s News Corporation
. WB owner: AOL Time-Warner
. UPN owner: Viacom/Paramount

The Telecommunications Act of 1996 now allows an organization to own as many stations as it wishes, provided that their combined reach does not exceed 35 percent of the US population.


PRODUCING TELEVISION PROGRAMS

Departments and Staff

Like radio, a TV station’s general manager is ultimately responsible for all station activities. The sales department sells time to local and national advertisers, the engineering department is handles technical equipment, and the production department puts together the local programming. By tradition, the news division is separate from the programming department. Last, the administrative department handles the station’s business side.

Network organization is somewhat similar to a local station’s, but with these specific differences:

. Sales handles network commercials and works with ad agencies

. Entertainment develops new network programming

. O and O Department handles stations “owned and operated” by the network itself

. Affiliate Relations supervises contracts and maintains good relations with affiliates

. News responsible for network news and public-affairs programming

. Sports responsible for all sports programming

. Standards checks network programs to insure they don’t violate the law or
the network’s own guidelines for appropriate content

. Operations handles technical aspects of actually sending programs to affiliates


Getting Programs on the Air

On the local level, the biggest station expense, the largest revenue source, the largest staff, and the biggest production efforts all belong to the same department: news. Usually a local station produces no programs other than its own local news, interviews, and sports shows.

On the network level, the greatest efforts go into prime time programming (8-11 p.m., EST). A good program idea starts the process, and each year networks must sift through hundreds of these ideas. At the end of the trimming process (program ideas now down to 50-75), sample scripts and potential story lines are called for. If the idea still looks promising a pilot (a program’s first episode) is then produced. In a typical year a single network will produce about 25 pilots.


ECONOMICS

The TV industry has always made a profit, and ad revenues have continued to increase ever since 1971. By 2000, the industry’s total advertising revenue amounted to $44.5 billion.

Commercial Time

Like radio, television sells three major types of advertisements: national, national spot, and local.
National ads (40 percent of revenues) concentrate on general-consumption items such as soda, cars, soaps, and so on. Regional advertisers (30 percent of revenues) buy national spot time to sell products of only regional interest (snow equipment, pools, farm implements, and so on).
Local advertisers (30 percent of revenues) buy airtime to reach people in their immediate area.
The bigger a station’s audience (program rating) and market, the more they charge advertisers.

Where Does the Money Go?

At the network level, programming is the biggest expense. A 30-minute series may cost from $800,000 to $900,000; a full hour drama may cost $2,000,000 plus.


PUBLIC BROADCASTING

A Short History

Throughout its 30-year history, and despite a major reorganization by the 1967 Public Broadcasting Act, public television has faced several perennial problems:

. inadequate funding
. political infighting
. a lack of clear purpose

Before 1967, noncommercial TV was known as educational television. The 1967 Public Broadcasting Act authorized money for new facilities and established the Corporation for Public Broadcasting (CPB) to oversee noncommercial TV and to distribute funds for programs. The government also created the Public Broadcasting System (PBS), whose duties resemble those of commercial networks.

Programming and Financing

Much of PBS’s programming history can be described as a civil war between the local public stations and the centralized PBS organization. In 1990 the balance of power moved in favor of a centralized authority when PBS created an executive position for national programming, with the power to develop and schedule new programs. The results have been far from stellar, with PBS stations pulling down an average 2.0 prime time rating.

PBS stations are licensed by the FCC. Currently there are 348 PBS stations operated by 173 licensees: community organizations (50%), universities and colleges (33%), state-operated networks (12%), and the rest are mostly municipalities.

In addition to its programming efforts, PBS is also involved in such areas as the Adult Learning Service and the Teacher Resource Service.

Funding for PBS (circa 1999) breaks down this way:

. 43 percent from federal, state, and local governments
. 25 percent from viewer contributions
. 15 percent from businesses
. 17 percent from various gifts, grants, auctions, and other miscellaneous sources


CABLE TELEVISION

History

Cable TV began in the 1950s as a device to bring conventional TV signals to isolated areas that could not otherwise receive the signals. When the FCC lifted nearly all of its cable restrictions in 1980, the cable industry enjoyed increased freedom. As of 2000 there were 7,500 cable systems serving 68 million households. Providing programming such as live NFL games, coverage of the O.J. Simpson trial, and Clinton scandals, cable quickly proved to be a strong rival to traditional broadcasting. Ad revenues reflected that growth and strength: in 1990 cable ad revenue was $2 billion, but in 2000 it had grown to over $7 billion.

The most significant developments in the cable industry in the last two decades, however, have been legal ones. Reversing a deregulation trend and acceding to subscriber complaints, Congress passed the 1992 Cable Television Consumer Protection Act, which resulted in an average 17 percent reduction in rates. In addition, the act mandated that broadcasters could choose between must carry (the local cable system had to carry the station’s signal) or retransmission consent (the local station had the right to negotiate compensation for carriage of their signal).

In other areas, the Telecommunications Act of 1996 gave telephone companies the right to enter the cable business (and vice versa), both of who could have competing systems in the same community. The act also allowed most cable companies to once again set their own rates.

The resulting trend was that new cable networks found it hard to break into existing cable systems because of a lack of space. And like broadcast networks, cable TV is also falling victim to audience fragmentation. On the bright side, cable systems have an emerging advantage over broadcast systems in that cable TV can also offer high-speed Internet access to its customers.

Ownership

The ownership trend in cable, as in other media, is toward consolidation; three big companies serve almost 60 percent of all cable subscribers: AT&T, AOL Time Warner, and Charter Communications. But unlike conventional TV, a cable system is structured quite differently into three distinct components

Structure of Cable Systems

There are three main components in a cable system:

. head end consists of equipment that receives and processes TV signals
. distribution system the actual cables that deliver the signals to subscribers
. house drop the cable part connecting the feeder cable to a subscriber’s TV set

Programming and Financing


The sources of programming for a local cable system are:

. local origination cable studio shows, government programs, local school sports
. local broadcast stations TV signals from nearby metro areas
. superstations the six independent stations whose signals are widely carried

WPIX New York KWGN Denver
WGN Chicago WSBK Boston WWOR New York KTLA Los Angeles

. special cable networks MTV, the Weather Channel, C-SPAN, BET, USA
. pay services HBO, Showtime, Cinemax, the Movie Channel
. pay-per-view recently released films, special sports and entertainment events

A local cable system has two basic sources of income:

1. subscription fees from consumers
2. local advertising

Local advertising receipts, though growing, amount to only about 20 percent of a cable system’s total revenue. Cable systems must also pay for their programming. In the case of pay services, the consumer fee is usually split between the cable system and the cable network, a revenue source that now accounts for more than 50 percent of a typical system’s overall profits. Most of the revenue goes into system maintenance and into paying back original construction costs.

Nationally, cable networks typically work like this:

Program sources

On national level, cable systems have three:

. original productions CNN, HNN, ESPN, C-SPAN,
. movies HBO, Showtime, Cinemax
. syndicated programs network reruns, game shows

Revenue sources

National cable service systems have three:

. advertising
. carriage fees (the fee cable networks charge local systems to carry their programming)
. subscription fees

Pay-per-view (PPV)

By 2000 over 30 million homes were equipped with PPV. Sports and special events (boxing and wrestling are biggest draws) account for more than half of PPV’s $600 million revenues.


HOME VIDEO

The growth of the home video industry parallels the growth of VCR use in US households, which now stands at 90 percent. Though used mainly to play back the over 30,000 prerecorded cassette titles now available, VCRs are also used to timeshift (record a program for later playback, the most popular targets being soaps and movies).

Like other businesses, home video functions can be divided up three ways: production, distribution, and retail. Motion picture studios dominate the production end, record-like rack jobbers dominate the distribution side, and a few large discount chains and stores comprise the retail end.

Large chains such as Blockbuster (30 percent of all US rentals) and Hollywood Video dominate the rental business, with consumers spending over $20 billion in rentals in 2000. Until recently, rental stores bought tapes wholesale ($60 - $70 each) and then rented them out; once a tape generated more than it cost, the rest was profit. A new scheme called revenue sharing, however, may give a huge power advantage to the larger rental chains. Under this system, the chains agree to share the revenue from each tape rental in return for a drastically reduced wholesale price (as low as $10 each); this arrangement lets the store buy three or four times as many copies of hit movies so that consumers can always find a copy on the store’s shelves.


DIRECT BROADCAST SATELLITES (DBS)

Currently there are about 15 million households using DBS; though the final effects of DBS use is far from clear yet, we do know that DBS users tend to cancel their cable subscriptions and make fewer trips to video stores. Though satellite systems started with the six-foot receiver dishes, the newer 18-inch variety has made the former size obsolete. The smaller dish size also uses digital technology to produce sharper pictures and CD-quality sound.

Slow to catch on, DBS got a tremendous boost in 1999 with the Satellite Home Viewer Improvement Act, which granted satellite companies the right to retransmit the signals of some local broadcast stations. The two companies that dominate DBS are DirecTV and EchoStar. Like cable systems, DBS companies are preparing for the digital age by upgrading their set-top converter boxes to provide Internet access, e-commerce, and interactive TV to their subscribers.


FEDBACK

Measuring TV Viewing

Network Ratings: Nielsen Media Research, which serves both Canada and the US, provides networks with audience data through its Nielsen Television Index. To compile these ratings, Nielsen uses a device called a People Meter, a clock-radio size device that sits atop your TV. After gathering demographic data about each household member, each is assigned a unique number. While watching TV, members periodically punch in viewing data on the People Meter's remote control unit. There are about 5,000 People Meters used in gathering sample data, 90 percent of which is normally useable. The sample is replaced every two years.

Local Market TV Ratings: Nielsen surveys 200 plus US markets at least four times a year by using a combination diary and electronic metering technique. A computer randomly selects phone numbers from local area directories to get participants. Diaries (one issued for each TV set) have space to record demographic data about each household member as well as a record of their viewing habits on the quarter hour. Diaries are kept for seven days, and about 50 percent of the diaries submitted end up being useable.

Television Ratings

TV viewing data is reported in essentially the same radio it is for radio, ratings and shares.

Rating = # of households watching a program divided by # of TV Households

Total # of TV households = the number of households with TV in a given market

Share of the = # of households watching a program divided by # of HUT
Audience
HUT = number of households using (watching) TV at a particular time

Four times a year (Feb., May, July, and Nov.), Nielsen conducts a sweep period in which each local TV market in the country is measured. Stations use these ratings to set their ad rates.

Determining the Accuracy of Ratings

In response to Congressional concerns about the accuracy and integrity of the TV rating system, the television industry established the Electronic Media Ratings Council to monitor, audit, and accredit broadcast rating services. Nevertheless, some criticisms still remain.

. Do people who do surveys have different viewing habits than people who don't participate?
. Do survey "returners" have different viewing habits than "non-returners?"
. Do people who know they're being monitored alter their viewing habits?
. What about the industry's self-acknowledged problems trying to measure ethnic groups?
. What about "sweep week" programming distortions (short term changes in programming)

Questionnaires, Concept Testing, and Pilot Testing

Networks test audience reactions to programming in three ways. With questionnaires, the networks ask some 100,000 people per year about their tastes, opinions, and beliefs. In concept testing, networks give selected viewers a few paragraphs about an idea for a new series and then ask them their opinions. The third form, pilot testing, consists of placing a group of viewers in a special theater and showing them an entire program.

Television Audiences

Among the quantitative statistics we know about US television audiences are these:

. TV sets are in 99 percent of all homes; 75 percent of households have more than one set
. cable TV has some 68 million subscribers, reaching 68 percent of all households
. average set is on for seven plus hours a day, with each individual watching three hours plus
. audience grows in size from 7 a.m. and peaks during prime time hours
. viewing is heaviest during the winter, smallest during July and August
. preschoolers and females dominate a.m. TV, the 13-and-under crowd rule Saturday mornings,
and the 18-49 year old category dominates prime time
. low-income households tend to watch more TV than middle-income households
. teenagers watch the least amount of TV
. people with more education tend to watch less TV, and women watch more TV than men
. cable subscribers are younger, have more children, and are more affluent; they are also often
dissatisfied with traditional programming and want a greater variety of choice