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Tuesday, January 24, 2006

And Then There Were Five
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The two runts of the broadcast world have decided to combine rather than force each other into oblivion. CBS and Time Warner announced about an hour ago that their respective mini-networks -- UPN and WB -- will merge this fall into a network called CW (presumably Cbs and Wb, but I just see "conventional wisdom," and CW to me is "don't launch a new broadcast network").

The reduction from 6 broadcast networks to 5 most likely will be greeted with a yawn, a far cry from the intense media attention given to Fox's audacious launch of a 4th network some 20 years ago. Why? Because most consumers don't even distinguish the difference between broadcasting and cable channels anymore. This won't be treated any differently by some than when TNN rebranded itself Spike (actually that probably drew more due to Spike Lee's threatened legal action). But the consolidation is significant on several levels:

1. Viacom broke up this month into two parts, with Les Moonves getting the "old" technologies like CBS and UPN. Now the company is even smaller; instead of running two networks, it's running one-and-a-half (UPN started out as a joint venture of Chris-Craft and Paramount). CBS/Viacom had never wanted UPN anyway; it came with a previous aquisition. Now those concerned about media consolidation have a bit less to be worried about, not that UPN has any audience anyway. It even had to cancel a Star Trek series, which was presumed to be a bottomless gold mine.

2. It provides more evidence of the disaggregation of the video market. This is obvious to free-market folks and thus would seem to beg against further media regulation, but it is also sometimes used by those on the Hill and at the FCC who want to extend broadcast regulation to cable, citing the fact that the consumer can't tell the difference between broadcast and cable on his or her TV. This type of regulatory creep is more than possible, as Adam Thierer has written, and it's already happening in Europe.

3. It means fewer network affiliates will have to convert to digital, but...

4. It doesn't reduce the total number of broadcast outlets. Tribune, a partner in WB, is affiliating those WB stations with CW. But assuming each major and mid-sized market has a WB or UPN affiliate, and one distributes CW, what of the other station? We could start seeing affiliate hops, as we did when Fox launched and again with WB and UPN. This would be limited only by the number of owned-and-operated stations networks currently have. Still, with a reduction from 6 to 5, some licensees aren't going to have a network affiliation any more. Which direction will they go? Will their licenses lose value? It should be interesting to watch.

5. I'm not sure CW will be interesting to watch. Moonves said CW "will clearly be greater than the sum of its parts," but that remains to be seen. Or not seen, as most Americans choose to do with UPN and WB programming. Both networks have tried some niche approaches, which would make sense in a broadcast-only world but was less tenable in a 500-channel universe. It also had to gall programmers at these networks when their shows would post lower ratings than basic cable fare such as The Daily Show with Jon Stewart, South Park, F/X, The Shield and Monk. The latter has run originally on USA Network then months later on ABC; the fact that a broadcast network will choose to air a cable rerun shows how the quality of cable has risen. Several years ago the cable industry stopped their Cable ACE awards because they didn't need it; they were winning most of the Emmys.

Programming is expensive. That's why programmers are so fearful of a la carte mandates, because they know the only way they can afford to produce good programming is to get the aggregated eyeballs that come from people having networks on their systems that they didn't select but might watch. We all get WB or UPN (well, anyone in a decent-sized market anyway) so a la carte isn't an issue here. But people haven't been choosing them, even when they're free. We'll see if one network with the most-watched of each respective network's little-watched programming is the answer.

posted by Patrick Ross @ 12:23 PM | Mass Media

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