Even though it is still one of the top entertainment mediums in the USA, Television is suffering according to the numbers.
Locally TV time used to be expensive compared to Radio. Now it's much closer, except for production costs.
Read more from ABC/Disney:
| Tread Warily: Disney's Iger Calls TV 'Challenged Business' |
| by David Goetzl, Thursday, May 29, 2008 7:30 AM ET |
 On the eve of upfront deal-making, Disney CEO Bob Iger painted a grim picture of network TV's future, a contrast to the usual bravado expressed about the medium that reaches every home in the country. Sounding somewhat defeated in referring to ABC, Iger offered up: "It's a tough model--it's really tough." Soon after, he added: "It's a challenged business." His reasoning--offered Wednesday at an industry event--wasn't based on anything particularly new about the hurdles broadcasters face, but his bluntness was striking. Twice, he noted that the ABC leadership is exploring ways to trim costs and restructure. ABC is looking for new revenue streams by exploiting its content on emerging platforms, Iger said--but he didn't express overwhelming optimism there, at least for the near term. People are increasingly viewing ABC shows online or via iTunes--"consumption is fairly compelling"--but the revenues are "still small," compared to traditional ad dollars spent on the network, he said. That's complicated by "young consumers"--the ones advertisers most want to reach who will age up with their habits entrenched--being "much less tolerant of ... accessing or getting programming in a linear form on a traditional network." Iger said they will be "much more demanding of the product that they get in a video-on-demand form, meaning individually." "And if you're not in that space, you get marginalized," Iger warned. Offering up another ominous sign for broadcasting--this time on the local level--he said station groups touting retransmission consent dollars as a long-term financial game-changer are misguided. "That's not going to save that business," he said. Disney owns 10 stations, but is not believed to push for retrans dollars from cable operators, instead its using negotiations with MSOs to extract higher subscription fees for its cable channels. Iger did say that ABC is pleased with its progress over the last several seasons, where hits such as "Grey's Anatomy," "Lost" and "Desperate Housewives" have given it much-needed success after some fallow years. Within network TV, he said: "We like how we're positioned." But he emphasized that continually replenishing the pipeline with more breakout hits is key to what's becoming the new business model at ABC. Iger said management is increasingly looking at the network as a studio, working closely with ABC Studios. Together, the pair can develop hits to be sold internationally, and over time, distributed profitably on new platforms. "If we were not in the studio business and we did not have success there," he said, "I think, in this day and age, it would be pretty challenging to justify being in the network business unto itself--with all the incumbent risks associated that include the cost structure and the competition." |
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