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Chapter 13: The Television Industry

by: Deja Jackson

Chapter 13: The Television Industry Comm 130

Marketplace > University of Pennsylvania > Communication > Comm 130 > Chapter 13 The Television Industry
Deja Jackson

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Lecture and book notes
Mass Media and Society
Joseph Turow
Class Notes
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This 7 page Class Notes was uploaded by Deja Jackson on Sunday May 1, 2016. The Class Notes belongs to Comm 130 at University of Pennsylvania taught by Joseph Turow in Spring 2016. Since its upload, it has received 16 views. For similar materials see Mass Media and Society in Communication at University of Pennsylvania.

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Date Created: 05/01/16
Chapter 13: The T elevision Industry 04/30/2016 ▯ “MVPDs are now linking with OTT SVOD services… that allow them to sell these services directly to their broadband and pay-TV customers.” ▯ ▯ The History and Rise of Television ▯ 1885: Nipkow Disk: created a mechanical version of a TV camera ▯ 1935-1938: Nazi government in Germany operated world’s first regular television service; RCA (Radio Corporation of America) ▯ 1939: FDR became first president to appear on TV 1940s: WWII interrupted TV; 1946: Started commercial life in the US 1950s: “Golden Age of Television”: marked by the proliferation of original and classic dramas produced for live television; most had at least 1 TV set in their home and rise of Nielsen company 1951: Live TV and I Love Lucy shot on film in front of an audience; executives realized they could put filmed episodes into syndication: licensing of mass media material to outlets on a market-by-market basis (reruns) 1960s-‘70s: advertisers rushing to the new medium, rise of participating sponsorship (purchased slots within or between shows as opposed to full sponsorship), rise of color TV (NBC peacock) 1970s: FCC started assigning a large number of new TV licenses and caused the rise of “independent” broadcasters; fin-syn rules— prevented the major TV networks from owning their own syndication companies and primetime access 1970s: ABC, NBC, CBS flying high; rise of cable took away some of their dominance; coaxial cable allowed national marketing 1980s: start of a raft of new satellite-delivered TV 1990s: Hollywood = creator/leader of popular programming 1994: DirecTV begins direct-to-home satellite services, followed by Dish 1996: Telecommunications Act of 1996: got rid of fin-syn rules ▯ ▯ The Contemporary TV Industry ▯ TV Broadcasting: scanning a visual image and transmitting it, generally with accompanying sound, in the form of electromagnetic waves that when received can be reconverted into visual images  Historically the most popular of the three domains  Signals are transmitted from towers owned by local stations on frequencies allocated to them by the FCC  Commercial stations: support themselves financially by selling time on their airwaves to advertisers  Noncommercial stations: receive support through donations from listeners, private foundations and commercial firms in return for billboards o Billboards: mentions of a sponsor’s name or products at the start or end of programs airing on the station o Underwriting: when a company pays to sponsor a program on a noncommercial station  Television network: an organization that distributes TV programs (usually by satellite and microwave relay) to its affiliated stations, or stations that agree to carry a substantial amount of the network’s material on an ongoing basis, so that the programs can be broadcast by all the stations at the same time o Big Four commercial networks— ABC, CBS, NBC, Fox— the giants of broadcast TV because of their role in coordinating distribution  Vertically integrated operations (circumstance in which an organization has control over a media product from production through distribution to exhibition)  Each owns its own broadcast outlets: stations, organizations that transmit broadcasting signals; locally called O&O’s (owned and operated) o Network affiliates: local broadcast TV stations that are not owned by broadcast networks, yet transmit signals and programs on a daily basis; in return, the network promises to compensate the affiliate with a portion of the revenues received from advertisers that have bought time on the network  Transmit the network’s program feed: the succession of shows sent from a network to is network affiliates  Many are a part of station groups: collections of broadcast television stations owned by a single company o Independent broadcast station: a station not affiliated with one of the Big Four networks  Almost all money that broadcast stations and networks receive comes from commercials: short audiovisual pieces that call attention to advertisers’ products or service  Local stations more recently make about $1 billion/yr on transmission fees: the money TV networks and local stations charge cable and satellite firms for the right to carry their material ▯ Subscription Cable and Satellite Services ▯ Cable TV: provided by subscribers by signals sent through a wire (usually a coaxial cable, but increasingly via fiber optic lines)  Cable TV system: the cable television retailer that physically installs the cable and markets the program service to consumers in a particular geographic area  Multiple system owner (MSO): a cable TV firm that owns two or more cable systems  Subscription networks: nonbroadcast program channels for which people pay a monthly subscription fee to receive them via cable or satellite ▯ Telcos ▯ Telephone companies that offer television and internet services; could pose a formidable threat to providers of television services (Verizon and AT&T ▯ Satellite TV ▯ Programming that comes directly to the home from a satellite orbiting the earth  Most backyard receivers have been replaced by direct broadcast satellite (DBS) technology: allows a household to receive hundreds of channels, from signals that are delivered digitally from satellites operating in orbit to a small dish installed on the side of a dwelling; a set-top box decodes digital signals so that they appear on the TV set ▯ Online and Mobile Platforms  Major Key = convergence  Place a lot of episodes online to try and sell advertisers on the idea of sponsoring both the broadcast and online feeds  Activity is NOT nearly as profitable in comparison to broadcast and subscription domains ▯ Linear v. Nonlinear ▯ Linear: watching the lineup provided by the channels in real time ▯ Nonlinear: SVOD, VOD, DVR ▯ ▯ Production in the TV Industry  Local systems is produce lineups: the menu of channels that a cable television system offers to potential subscribers  Networks produce formats: a collection of elements that constitutes a channel’s recognizable personality, created through a set of rules that guide the way the elements are stitched together with a particular audience-attracting goal in mind Producing Cable and Satellite Lineup Channels The choice of networks is based on three considerations:  Technological limitations: HDTV signals use more bandwidth than standard TV signals, which is easier for satellite firms than for cable companies to add capacity  Covering costs o Licensing fees: the costs that particular networks charge exhibitors for carrying the networks’ lineups in the exhibitors’ cable or satellite systems o Tiering: the strategy by which different levels of television programming are priced differently (e.g. subscribers pay more money for more clusters of channels) o Pay-per-view (PPV): a transaction in which a cable provider, satellite company or telco charges the customer for viewing an individual program, such as a boxing event, a live broadcast of a concert, or a newly released motion picture o Video on demand (VOD): a television viewing technology whereby a customer uses the remote control to navigate to a menu of programs and then click on the program he or she wants to watch; unlike pay-per-view, in which the customer has to wait for a show to appear at a certain time, the program immediately appears for viewing  Made possible because the wire connected to the television carries a signal two ways— from the head end (system’s regional delivery location to the home set and back  The exhibitor’s ownership role in a network o Whether or not the multiple system owner (MSO) or its parent company owns the network; if a company has a financial interest in the success of a channel, it will include it o Ex: If you live in an area served by Comcast, you will probably find that it carries Style, the Golf Channel and other programs owned partly or wholly by Comcast ▯ Producing Broadcast Channel Lineups  Since 2009, broadcasters have the ability to provide HDTV: a TV display technology that provides picture quality similar to that of 35mm movies with sound quality similar to that of today’s compact discs. Some television stations have begun transmitting HDTV broadcasts to users on a limited number of channels, generally using digital rather than analog signal transmission)  When not using HDTV, broadcaster use channel multiplexing (multichannel broadcasting): sending multiple signals or streams of information on a carrier at the same time in the form of a single complex signal and then recovering the separate signals at the receiving end o Face challenges of truing to persuade local cable systems to carry their digital and HDTV signals because they take up so much space ▯ Determining the Channel’s Intended Audience  The competition: the programming alternatives that already exist o Starting a similar channel may not be useful unless you have a clearly more attractive way of doing it  The available pool of viewers o Must have potentially large enough audience o Programmers aim to reach people with particular lifestyle habits  The interests of sponsors  The costs of relevant programming o Cost must be appropriate in view of projected revenues from advertisers that want to reach the projected audience ▯ Traditional v. Precision Approach to Audience ▯ Precision: ability to identify and send commercials specifically to certain people;  Addressable: interactive, buying something with remote, direct connection with cable company and specific TV box  Programmatic: ability to use computers to ell what ads to show to who and what time  OTT: using the non-television technologies to get TV-like programming; watching on laptop or tablet, etc. ▯ Ratings ▯ Audits of people’s television viewing behavior that help to determine where much of the money for programming and advertising should go; Nielsen Media Research dominates the business  People meters: a small box installed by Nielsen on TV sets in about 20,000 homes that is has chosen as a representative sample of the U.S. population; holds a pre-assigned code for every individual in the home; Nielsen asks each viewer to enter their code at the start and end of every TV session; The information is transmitted to Nielsen’s computers through television lines and is the basis for the firm’s conclusions about national viewing habits  Diaries: distributed four times a year to another sample of households in the same markets; family members fill in the viewing experiences for each member of the household for a month; used to determine viewing habits during the sweeps (February, May, August and November)  Household ratings: represent the number of households in which the channel was turned on, compared with the number of households in the channel’s universe (the local area or the number of people who receive the cable network)  People ratings: particular demographic categories of individuals within each household (ex: 18-49 yrs or those who are female)  Household share: the number of households in which a particular channel was turned on compared with the number of TV-owning households in the area where the channel could be viewed  National rating points: a measure of the percentage of TV sets in the U.S. that are tuned to a specific show; in 2001, each national rating point represented just over 1 million U.S. homes with TV’s o The way broadcast networks often answer to advertisers because of their wide reach (% of the entire target audience to which a media outlet will circulate) o Ex: Late Show has a 5.4 household rating and 16 household share = 5.4% of the 117.5 million household TV owners in U.S. had at least on TV tuned to Late Show and 16% of households who were watching TV around that time of night were watching Late Show  Average commercial minute: Nielsen’s reporting standard for determining ratings and household viewing during the commercials; this information gives advertisers measurements for each program as a whole and also for commercials that run during the program o Counts the people who viewed it at the actual time it ran o Includes those who recorded it on DVR and viewed it with in a three-day period (C3 standard) o Do not take into account web and mobile viewing ▯ Preparing a Schedule ▯ Schedules: patterns in which programs are arranged  Day parts: segments of the day as defined by programmers and marketers  Prime time: the hours in which the Big Four broadcast networks put their most expensive programs and charge advertisers the most money for commercial time  Series: the building block of a television schedule; a set of programs that revolve around the same ideas or characters; lend predictability to a schedule and aim to attract viewers to that time slot on a regular basis  Tries to maximize audience flow: the movement of audience members from one program to another o Lead-in: a program that comes before and leads to another program; aims for the chance of sampling: trying out a new program by watching it for the first time o Lead-out: the program that follows the program after the lead-in o Hammock: strategic placement of a program between two other programs; positions a new series in between two very popular ones that appeal to the same target audience often gives the right viewers an opportunity to sample the new series  Counterprogramming: scheduling a program that aims to attract a target audience different from those of other shows in the same slot; often done to avoid competing directly with a popular series ▯ Producing Individual Programs  Production of programs aimed at the web and other digital spaces is very risky  An order for a prime-time series from a broadcast network is the biggest prize for a production company o Creators present pitches: brief summary of a program idea o Treatment: a multipage elaboration of a TV series producers’ initial pitch to network programming executives; the document describes the proposed show’s setup and the way in which it relates to pervious popular series o If network officials like the format they will do concept testing: research commissioned by network executives in order to determine whether the format of a proposed series appeals to members of the series’ target audience; this often involves reading a one-paragraph description of series formats to people who fit the profile of likely viewers o If the concept rates well, they may be contracted for a pilot (a single episode that is used to test the viability of a series) to show in preview theaters (venues to which members of a target audience are invited to engage in concept testing to evaluate a new pilot) o If everything works out fine, networks give the production company a license: the contract that grants network permission to air each episode a certain number of times  Many series receive bad ratings and are yanked before all episodes are aired  Licensing agreements usually do not cover the full costs of each episode ▯ ▯ Distribution in the TV Industry  Many non-network distributors are willing to help local stations find attractive shows through syndication— licensing programs to individual outlets on a market-by-market basis o Stripping: five-day-a-week placement of a television show; programmers believe that, in certain day parts, placing the same show in the same time slot each weekday lends a predictability to the schedule that target audiences appreciate (ex. Wheel of Fortune and The Ellen DeGeneres Show) o Off-network syndication: a situation in which a distributor takes a program that has already been shown a network of TV and rents episodes of that program to TV stations for local airing o Out-of-home locations (captive audience locations): places such as airline waiting areas and store checkout lines where people congregate and likely pay attention to TV clips and commercials o Reverse flow of programming is taking place; they may decide to copy an international series idea for use in the U.S. (The Office) ▯ Programs with Commercials on the Internet  The rise of stream: the act of sending digital materials so they can be heard or viewed as they are sent, without having to be saved first o Commercials are much fewer and shorter, but you cannot speed through them  Big networks make deals with websites to display links to its shows  Cable and satellite executives are annoyed that many TV programs are available for free online ▯ ▯ Exhibition in the TV Industry ▯ Exhibitors = local stations, cable systems, satellite delivery systems, phone companies  Local broadcasters facing competition from cable, satellite, internet  Ratings have been declining steadily for local programming  Subscription video world posing a threat  Cable is worried about satellite services  Both cable and satellite concerned about Apple TV, Roku, Wii, Xbox to watch Hulu Plus, Netflix and the like  Critics of cable say it is too expensive, while cable companies argue it has allowed the diversity of program networks that exists on TV services ▯ Media Ethics  Watching has SO many meanings now because of converging screens  IntoNow is an app that detects what you’re watching live and finds relevant Twitter mentions from the show and serves up stories based on it  “Addressable television”— involves ability to learn information about the individuals who are viewing and send them particular commercial messages; issues with personalization


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