1. Jack in the Box

2.Crest

3. Dawson’s Creek

4. Buddy Lee

5. Touched by an Angel

6. Frasier

7. Just Shoot Me

8. Hughleys

9. Infomercials

10. Ally McBeal

11. Super Bowl XXXII

12. NBC ads

13. Wrestling

14. Animal Planet

15. Winning Lines

100 million homes have TV in America, roughly 99% of population.

78% have cable.

About 10% have satellite.

22% have 1 TV, 38% have two and 40% have 3.

(78% have two or more).

7 hours a day on average.

Varies by season. February: 7.5 hours; July 6.5 hours

NBC, CBS, ABC.

Each owns 12-15 stations and are affiliated with about 200 other stations (meaning that they provide programming to stations owned by others). These networks are thus primarily delivery systems. Until recently, they have not owned the shows they broadcast; rather they make revenues from the advertising that accompanies the shows they broadcast.

Each of the networks pulls in about 9-13% of the viewing population.

1998-99 season.

CBS: 13.1 million

NBC: 12.7m

ABC: 11.8m

Fox: 10.8 m

Fox,WB, UPN and Pax.

Fox. 1986. Rupert Murdoch.

Why? He already owned 20th Century Fox studios; creating a TV network gave him an assured outlet for programming.

Fox started slowly, with programming just two nights a week. Fox’s strategy was to do what no one else was doing -- and that was to target (a) Men -- with shows such as "Married with Children" and NFL. This is the single most desirable market for advertisers and hard to reach. (b) Youth -- with shows such as Beverly Hills 90210, Melrose Place, 21 Jump Street -- and currently with shows such as Simpsons, Ally McBeal and Xfile and (c) African Americans.

As viewership grew, Fox expanded its programming into other evenings. With success, it began to de-emphasize a commitment to programming African-American themed shows.

Its problems: It has never been very successful at developing situation comedies (long the staple of television). Its only successes in the genre have been its animated shows (Simpsons, for example). In the current season, 1999-2000, Fox has had a major drop in viewership and major erosion in its key target audience (young men).

UPN and WB

Their parent companies are major entertainment companies which, like Murdoch, wanted to be sure they would have a place to show their programs. The immediate catalyst for UPN and WB was a court ruling that allowed CBS, NBC and ABC to own their own shows (rather than just broadcasting shows). Paramount and Warner got worried about the future -- where would they put their shows? -- and so they started their own networks.

These are relatively small networks of 80-120 affiliates (so much smaller than the older networks).

Their strategy has been to reach audiences that the others ignored. Both have an urban base (and thus some programming on African-American themes). UPN in particular began by targeting African American viewers and Trekkies, although it fared poorly and has been losing about $200m a year. It has rebounded in viewership in 1999-2000 with the show Smackdown on Thursdays. (More on Smackdown later).

WB has targeted African Americans and youth audiences (with shows such as Dawson’s Creek, Buffy, Felicity, Roswell,etc.) . It has done fairly well, although it has had a slight drop in viewership this year.

UPN and WB each pull in about 4% of the viewing audience.

Pax. Begun in August 1998. It has vowed to show no sex, violence or foul language. Its motto: "Parent Discretion Unnecessary." Lots of reruns of shows such as Touched by an Angel, Dr. Quinn, etc.

1970 -- NBC, ABC and CBS had 95% of the total audience.

2000: Broadcasters (the 7 networks) have about 49% of the total audience.

Fragmentation of audience.

Why is viewership down, especially for the networks?

• Internet. 50m homes wired, with 4 to 5m more per year. Internet biggest growth is in age group 18-34, which is where the networks are losing viewership.
• Cable

Early 1960s, not every one could get TV, especially in rural and hilly areas. People erected antennas, ran cables from the antennas to homes. Cable. (Broadcast: over the air signal; cable -- through a wire).

Tremendous growth in the 1970s, primarily due to use of geosynchronous satellites (to relay signals to cable systems). HBO an example of early success; beam programs from earth to satellite, then to receiving station at cable company.

1975: Ted Turner’s WTBS (Atlanta TV station via satellite: a "superstation"); immensely lucrative. 1980: CNN.

Broadcasting seeks largest possible audience, mass market.

This has been a chief characteristic of the older networks.

Narrow casting: Through specialized programming, seek a particular audience segment. This is efficient for advertisers (costs are lower because they are not trying to reach everyone; better focus on target audience).

The newer networks and cable have excelled at this type of programming.

More and more special niche channels.

• Discovery Wings. Cable. Programs on planes and flying.
• Discovery Health. Medical News.
• Discovery Home and Leisure. Do It youselfer on home renovations.
• Discovery Civilization (ancient worlds).

MTV Networks, parent of MTV and VH1 -- has sprouted seven more offspring for different genres:

• VH1 country
• VH1 Soul
• VH1 Smooth (Jazz and New age music)
• M2 (regular MTV on a different time schedule)
• MTV Ritmo (Latin music)
• MTV Rocks (hard rock and heavy metal)
• MTV Indie (independent music and rap).

Fewer than 4 million homes can receive these niche within a niche cable channels so far, but they offer a glimpse of a vastly different media universe in the not too distance future. Digital technology (which enables TV signal to be compressed to carry far more information ) is ushering in this new age when perhaps 1400 or 1500 choices will be on parade. Digital cable TV transmitted primarily to cable systems around the country owned by Tele-Communications Inc. Since late 1997, about 1.4m cable customers have signed up for it. They get a package of 36 extra channels for $10 a month, and pay between $3 and $4 to rent a set top box (per month) required to bring in the digital signal.

A&E now has a Biography channel, History Channel.

Concerns about narrow casting: We’ll no longer have a public forum for ideas. If everyone is part of a subgroup, then there’s no "group." There’s no center, no middle and thus no common public life.

From the satellite to your TV. Growth in 1990s. Companies DirectTV and Primestar. Advantages: great choice (150 to 200 channels). Drawbacks: costs high, additional costs for second TV, service charges higher; apartment dwellers need building owner’s OK.

Think of these as retailers.

2400 or so.

Most owned by chains.

Only 17 owned by African Americans.

Formats: Affiliated (that is, affiliated with network, such as NBC or WB).

Independent.

Seattle Affiliates: NBC (Channel 5); ABC (4); CBS (7); UPN (11); Fox (13) and WB (10).

Affiliated stations can be very lucrative. In the top 10 markets, affiliated stations have an average of $120m revenues and profits at 45%. Average independent station brings in about half that.

Why are affiliated stations more profitable? They have local and broadcast news (and local news is the largest profit maker for a station). The lower channels (2-7) are older stations, usually affiliated, and they get better reception with lowest power.

1960s: 3 channels (all network)

1970s: Cable arrives (HBO, Turner). 10 channels.

1980s: VCR, cable (CNN, MTV): 40 channels.

1990s: Satellite; cable expands. 60 channels

2000s: Digital compression, Satellite, Internet/TV links: 300 channels

2010s: 1000+ channels, including interactive TV, movies, virtual reality.

Importance of advertisers. 100% of revenues.

From the 1950s: formative years of TV. TV as an vehicle for advertising messages.

All things equal, bigger the better.

How do you assemble the largest possible audience?

People generally aged 18 to 49, but tends to skew even young (12-34 or 12-24).

Why these years? Why not older?

Among people 18 to 49, most desirable targets include

Men

Young couples with children/family

Women

Assessment: how many people are watching (or listening), and what is the demographic composition of this audience.

Nielsen, the top ratings company in broadcasting today, looks at number of people viewing (for each program), household size, household income, ages of people watching, sex, race and market (size of city, urban or rural).

Ratings are as old as broadcasting. Radio programs had ratings as early as the 1930s. But ratings were never more important to advertisers and to broadcasters than they are today.

Ratings determine how much advertisers must pay when their commercials are telecast. With the price of TV at an all-time high, advertisers are very concerned that they get their money’s worth.

Two large companies, A.C. Nielsen and American Research Bureau (ARB) conduct most of the ratings for American television today. The Nielsen Co. has a lock on national TV ratings; its national TV index (NTI) is the standard for the industry.

Both ARB and Nielsen serve local TV stations as well.

The rating services sell their data to the networks, advertising agencies, production companies, syndicators, advertisers, and TV stations.

A major ad agency might pay as much as $1 to $1.5 million a year for a complete collection of Nielsen numbers. The TV networks pay considerably more.

The rating services provide several types of information.

Percentage of people viewing, based on total # of HUTS (Houses using TVs). So a 20 rating would mean 20 per cent of the total.

The share is a percentage of the viewing audience on that particular night, at that particular time, that watched the show.

RATING POINT:

Number of TV homes watching

___________________________

Number of US TV homes (93 million)

SHARE

Number of TV homes watching a particular show

_______________________________________

Number of TV sets turned on

The success of a show is measured by its rating or its share. First: its share. A successful show will out perform others in its time slot. Second: Its rating. There are about 128 shows rated each week; of these, the bottom 10 to 20 per cent are considered failures -- no matter how many people are watching.

Let’s say that the bottom rated show is drawing an audience of 10 million people -- more than it takes to make a run-a-way BEST SELLING BOOK or even a successful movie. That show , if it is bottom rated, is a failure.

Changes in ratings over the years, due to the rise of cable.

TV: Top ratings

TV Ratings Today

(Sept 27-Oct 3,1999)

(The point here is that the data generated by ratings may be inaccurate)

1. Time of show

For instance, during Autumn 1997, NOTHING SACRED, on CBS, was running at 8 p.m. on Thursday nights, in a time slot usually reserved for sitcoms. This drama show found it hard going there and NBC clearly dominates the entire Thursday night schedule with SEINFELD and the shows around it.

2. Flow

What came before your show? Any show will do well after Seinfeld (even on reruns), or after Friends or Frasier. Get the benefit of the large crowds watching those shows. Put that show somewhere else: may not draw the same numbers.

3. Counter programming

What are you up against? Will and Grace did well on Thursday evenings (after Friends -- example of flow) but when moved to Monday against Dharma and Greg, have done poorer.

4. Sweeps Months

Network ratings are being done all of the time, day in and day out. But Local TV is rated only 4 times a year, during the so-called SWEEPS MONTHS of November, February, May and -to a lesser extent-- July. During these months, the networks will put on fresh programming, no reruns, blockbuster movies and miniseries.

Both local stations and networks bring out their best to entice viewers into their comer. Ratings gleaned during these months set ad rates for the local stations for the next three months.

Other implications of RATINGS sweep months. Networks push their best programming into those months; offer more reruns in other months.

During sweeps months, in recent years, the networks have used 3D hype, celebrities, and "live TV" (an episode of "ER" done "live").

5. Measurement Problems

Ratings highly inexact. Nielsen relies on just 4,000 homes -- all of regular viewers. To get into the Nielsen sample, an individual must be a regular TV viewer (more than 20 hours a week). Many Americans view TV quite selectively --but it wouldn’t do to have a TV rating system based on people who didn’t watch much TV. So: some distortion here.

There is a 50-per cent turn down rate by persons asked to be in the sample. Unusually high in this sort of thing.

Nielsen sample tends to over represent older people and under-represent the poor, minorities, teenagers, younger men and women and the wealthy.

Only about 85 per cent of the 4,000 homes are actually in the sample at any given time. There are equipment failures, people out of town, people who quite and haven’t been replaced, etc. There is substantial turnover annually-- as high as 20 to 30 per cent.

Many people watch TV outside the home: in hospitals, bars, hotels and motels, residence halls, nursing homes, prisons, military bases, etc. Nielsen itself reported in 1990 that its rating service may miss as many as 6 per cent of the people viewing TV at any given time.

For all of the sophistication in these rating systems, the ARB and the Nielsen ratings can differ by as much as 2 to 3 points. Three points is almost 3 million homes-- 6 to 7 million viewers. For a program with ratings problems, two to three points can often mean the difference between renewal and cancellation.

The ratings system also doesn’t reveal much about those who watch programs they have taped with their VCRs. The current measurement tool -- people meters-- can tell when a program is recorded, but they cannot tell when it is played back. Studies have revealed that 3/4 of all programs that are recorded are not being watched WHEN they are recorded. Of these, about 80 per cent get played back. But 50 per cent of the time, viewers FAST FORWARD through commercials. ZAPPING commercials.

Ratings also don’t really measure who is actually listening.

6. Special programming

Awards shows, sports, highly marketed events

Mini series (during sweeps months in particular)

Some regular shows replaced during sweeps months by special programming (In November 1999,Fox removed "Action" from its Thursday night lineup because the show was doing so poorly in the ratings. Substituted movies, other special programming.)

Networks often offer mini series or other blockbuster shows during sweeps months.

Big budget shows with exotic locations, stellar casts, special effects are common.

4-6 hours mini series.

May draw large audiences (to help ratings, plug your other shows).

February 1999: Alice in Wonderland (with Martin Short, Gene Wilder, Ben Kingsley and Whoop Goldberg); Stephen King’s "Storm of the Century" (a 6 hour horror story). May 1999: ABC had Cleopatra (with Timothy Dalton and Billy Zane in starring roles), CBS had Joan of Arc and NBC had Noah’s Ark (with John Voight) and Atomic Train (disaster suspense with Rob Lowe). November 1999: ABC had Arabian Nights (filmed in Turkey, Yemen) and CBS had "Aftershock" (about NYC after a devastating earthquake).

7. Repeats

Costs have risen about 10 fold since the late 1950s. An average of just under $1 million for a sitcom episode. An average of about $1.5 million for a drama episode.

(As costs have risen for 30 and 60 minute shows, the networks have been airing fewer of them -- ordering just 22 to 25 episodes - -- to cover the period from October 1 through May 1 -- 8 months -- or approximately 34 weeks. That means: a fair number of reruns of major shows during non-sweeps months. These repeats appear to drive people to cable. The major recipients are A&E, Lifetime, and Discovery. Networks hate to tell viewers that the show is repeat; even tried to get TV guide not to list the R on it. Networks marketing their own goods will tell you that the others run repeats.

Fairly positive images of a show.

Can deal with serious issues -- Murphy Brown and Breast Cancer

Grace Under Fire: domestic abuse, alcoholism

Just Shoot Me: Sexual harassment

Roseanne: Abortion, body image/fat, money, difficulties at work, domestic abuse, etc.

But still needs to be upbeat, funny, laughs. Don’t want to offend viewers --- want to avoid channel switching at all costs. So nothing too offensive or downbeat.

They can be funny and outrageous -- but have to be fundamentally likable.

The late Brandon Tartikoff, President of NBC Entertainment: Very few characters are allowed to adopt a viewpoint that’s as radical as, say, Archie Bunker had 20 years ago and Al Bundy had nine years ago. One of the difficulties in being as funny as you can be these days is this political correctness, which I think is the death of comedy because no one’s allowed to misbehave.

Remember the dynamics of television today. As one ABC network executive said: "The network is paying affiliates to carry network commercials, not programs. What we are is a distribution system for Proctor & Gamble." (Proctor & Gamble is the single largest television advertiser in the US).

Advertisers pull out of controversial shows; do not want their product associated with controversy.

• 30 Something. Episode in 1991 with two men in bed -- apparently after having sex -- nothing shown. Advertisers refused to advertise on that episode; loss about $1 million in revenues.
• Ellen coming-out-of the closet show, April 1997. Chrysler pulls its ads from the show, indicating that it simply does not want to be associated with any show so controversial. Company spokespeople indicate that they don’t intend to criticize or attack the show; it’s simply good business from their point of view.
• Proctor and Gamble, largest single advertiser on TV today, has a standing rule that they will not advertise on any show that deals with abortion, incest, homosexuality or abuse.
• Such episodes of overt censorship are quite rare. Programmers have learned to avoid such controversial topics or issues. A kind of self censorship is common, as much is riding on ratings. The gain or loss of just ONE PERCENTAGE POINT in the Nielsen ratings can translate into a change in advertising revenue of $30 million a year.

American television has always been an unabashedly commercial medium and proud of it. Critic Paul Goodman once observed that " the only part of television which has fulfilled its promise at all is the commercial."

Chief source of revenue. 100% of over-the-air broadcasters (networks), vast majority of revenue for cable.

Most ads are in 30 second formats. The cost of a typical 30-second network TV commercial has risen to $300K to $350K in the 1999-2000 season. (Costs vary, running as high as $550K on a top rated show such as ER and as low as $30,000 on a bottom rated show such as Malcolm and Eddie. During the Super Bowl or some other immensely popular show, the cost can be $$750K to $1.2m 30 seconds.)

Super Bowl XXXIV, in 2000: ABC is charging an average of $2.2 million for each 30 seconds of commercial time (that’s an average of $73,333 a second) with some advertisers paying as much as $3 million (Ads during the fourth quarter of the game, when viewership could be its highest, are at the higher rate).. Total of about $135m worth of advertising during the game. The 2000 rates reflect a 37.5 percent increase over Super Bowl 1999 ad rates.

NBC’s top ranked ER remains the most expensive show for advertisers on network TV for a regular show. Average cost of a 30 second spot is $545k. NBC was the most expensive network in autumn 1999, with an average rate of $171K. NBC’s Thursday night lineup contained 5 of the 10 most expensive shows on TV (Friends, Frasier, Jesse, Stark Raving Mad and ER). CBS average rates are $163K (with a high of $312K for Everybody Loves Raymond); ABC average rate of $165K, Fox $150K, WB $53K and UPN, $29K. The least expensive show in autumn 1999 was UPN’s Malcolm and Eddie, at $17K.

Television is a very profitable business. Networks: NBC, ABC and CBS made $700m profit in 1998. Local stations often have profit margins of 20 to 40 per cent. Even stations in the smallest markets have margins of 8 per cent or more.

First: Ideally, link advertisers with consumers. Advertisers want to reach consumers with their messages about products.

Second, ads also provide messages about ideal beauty, happiness, success.

Third, ads influence the structure of shows. TV plots are written to break naturally about every 10 minutes.

Cathy Barron (New York Times, December 14, 1997), wrote about learning to become a situation comedy writer. "We were instructed to ‘write to the money.’ Which means that no matter how much you’d love to write a script about Frasier Crane’s father, Martin, don’t. Kelsey Grammer as the title character of Frasier is the star of the show and the producers want to know that you’re capable of writing appropriately for that character."

"We learned about script structure through the analogy of a man getting up a tree. The setup is the man climbing the tree. The ‘act break’ (right before the first big commercial) is that OH MY GOD MOMENT when the man is now up the tree and the audience is wondering if he’ll ever get down. After the commercial comes the ‘second act complication,’ which could be his realization that there’s a hornet’s nest in the tree.

"Then there’s the comic block scene, which is where you get heightened comedy, the payoff. Then the resolution."

A clutter of ads usually comes near the end of a show -- but before the last joke (or before scenes from next week). The idea is that this last little joke or scenes from next week (30 seconds long perhaps) will keep you in your seat -- through the ads.

Some 15 second ads. Many in the ad industry don’t like the 15 second ads -- worry about commercial clutter, particularly at the end of shows and before the start of the next show -- can have 10-16 short commercials. Fear that people will tune out.

TV stations are licensed by the federal government and are expected to serve the public interest. In theory, a TV station that ran Too MANY ADS could be accused of not serving the public interest and have trouble getting its license renewed. In practice, that’s highly unlikely. In the 1980s, the Federal Communications Commission -- which oversees all broadcasting in the US -- instituted a program of deregulation which has diluted to a great extent any examination of a station’s performance that might be done during the license renewal process. Hence, only the broadcaster who is grossly excessive might run into problems.

For many years, most large TV stations and the major networks subscribed to the Code of Good Practices of the National Assn. of Broadcasting, which established limits on the number of commercial minutes that could be telecast each hour.

The limits were voluntary but widely followed: 9 1/2 minutes of commercials during primetime; higher amounts during other times of night and day. But NAB guidelines were ruled a violation of Federal antitrust law in 1982, and the NAB code authority office closed its doors.

Throughout the industry, most pledged to continue the limits -- but gradually that eroded, as networks added more time. Prime time today has an average of 15 minutes of ads per hour.

Any problem with so many ads? Viewers could object but they are poorly organized. Most see TV Commercials as the price they have to pay for "free TV." Advertisers are a more powerful lobby against commercial clutter, fearing that it will lessen their effectiveness. And advertisers have more power, given that they are the chief source -- outside of cable and PBS, the ONLY source -- of revenues for TV.

What have advertisers done? Ford had a 2 minute ad (using a roadblock method, showing it on all networks at the same time) last autumn in an effort to stand out.

Ford bought up $10m in ad time on dozens of national and regional TV networks (40 broadcast and cable channels in the US alone) to run a single two minute spot. It was also shown on web sites. "Roadblock" means presenting a commercial to millions at the same time. This represented an extraordinary effort by Ford marketers to stand out in a cluttered advertising landscape.

(The Ford commercial was intended to help welcome the millennium and celebrate Ford customers for their diversity. Viewers heard Charlotte Church, a 13 year old soprano, singing an uplifting tune, "Just Wave Hello," as they watched footage filed in nine countries. There were scenes of people of various races and nationalities engaged in every day activities -- such as arguing with a lover, exercising, bidding a friend goodbye, sightseeing, dancing, working out and, of course, watching TV).

Others have tried being creative, offbeat, interesting.

NEWSBRIEFS. Added in 1978. 30 second "newsbreak" or "news brief" around 9 p.m. Appearance of a public service effort by the networks. But the newsbreaks were created by network advertising departments as a means of adding a 10-second commercial (which did not count, when introduced, as part of the NAB 9.5 min. rule). During the first full year of such newsbreaks, the networks added $30 million in revenues from the nightly 10-second spots. Local stations have since followed the networks’ lead.

PADDING PROGRAMMING: LENGTHENING MOVIES. Additional minutes of advertising are normally added when the networks broadcast long motion pictures and miniseries. Time is very tight in a 30 or 60 minute episode/sitcom/drama show; no time to be added for commercials. Films and miniseries, however, offer more flexibility. In many instances, the networks will EXTEND THE LENGTH of a theatrical film by adding minutes not included in the original cut of the motion picture. This creates a long film, providing an additional setting for commercials. When networks buy the rights to show movies, they will insist on adding film footage to the movie-- long shots, crowd scenes, etc. Sometimes, to extent playing time, networks will just run the video slower -- by about 5 or 6 per cent -- which is not discernible to the audience but provides additional time.

In January 2000, ABC showed the movie Birdcage (which ran under 2 hours in original release) in a 3 hour time slot -- using outtakes to lengthen the movie. Ads, too, were plentiful, to fill the 3 hour time slot.

PRODUCT PLACEMENT. (We’ve discussed this earlier). One of the first TV shows to use this extensively was Hawaii 5-0 in the 1970s; a United Airlines jet was frequently shown landing or taking off at Honolulu International Airport sometime during the show. United paid for that plug.

COMMERCIALS AS PROGRAMS/infomercials. The ultimate in using TV to make money is to turn the programming into one long commercial. Television has been doing this in two ways: with home shopping channels and with program length commercials.

HOME SHOPPING hit television in America in 1986. The Home Shopping Network is the most visible of the bunch, reaching about 60 million American homes. Through the use of 800 numbers that gave customers free long-distance dialing and the ubiquitous credit cards, HSN was shipping out between 25K and 35K items EACH DAY. 600 operators. In the first big wave in the middle and late 1980s, there were 30 stations and several networks vying for this business. By the early 1990s, only there networks were left: Home Shopping Network, Quality Value Channel and the JC Penney-Shopping TV Network.

PROGRAM LENGTH COMMERCIALS . Or infomercials as they are called in the industry - not a new phenomenon. But since the middle 1980s, vast proliferation of them. These shows frequently have the appearance of a real TV show. Some look like talk shows, interview shows, self help programs, even documentary news broadcasts. Producers and stations are required to identify these programs as advertisements only once, at the beginning of the broadcast.

Critics say that viewers are often misled into thinking these are real programs; the normal defenses they erect while watching ad messages are let down. Rader Hayes, a researcher at Univ of Wisconsin: "Even if you know it’s a commercial, you are getting all the messages that it is a show."

These are quite common on TV today-- during times in which no one else is willing to buy the space. So late night, early morning. Jay "The Juicer" Kordich, who created the market for juicers, barking at a studio audience about the healing powers of carrot juice. Juiceman sales have been running at about $75 million a year -- through these shows only. Others we’ve seen in the past 5 years:

• Cher trumpeting her Aqausentials cosmetics and Lori Davis Hair products.
• Dionne Warwick "Psychic Friends"
• Ali McGraw, Meredith Baxter and Lisa Hartman discussing Victoria Jackson’s makeup system.
• Others for health and fitness equipment, business opportunities, kitchen appliances and personal care products.

These are also quite common in children’s TV programming, too.

Prior to 1984, the FCC had a strict limit on the number of commercial minutes that could be broadcast on kid’s TV. Children’s TV was the only kid of TV where the govt. mandated strict commercial limits. 12 minutes of commercials per hour were permitted on weekdays; 9 1/2 on weekends. In 1984, the FCC lifted the limit, ruling that the marketplace would determine how many commercial messages could properly be carried in kids programming.

The Toy industry began generating 30 minute cheaply animated programs featuring the denizens of toy departments. The first was HE MAN; others quickly followed: GI Joe, Transformers, She Ra, Care Bears, Pound Puppies and others. Toy manufacturers have not tried to hide the fact that programs are subsidized by money from their marketing budgets. The shows are not expected to make money. RATHER THEY ARE PART OF AN OVER-ALL MARKETING EFFORT.

In 1990, as part of the Children’s Television Act, the government reimposed a limit on the commercial minutes that could be telecast during kids programming: 12 minutes per hour weekdays; 10 1/2 weekends. The FCC was instructed to take a close look at how stations were serving kids; FCC was also ordered to take a close look at these 30-minute toy commercials. FCC investigated shows but ruled that a 30-minute animated toy-related cartoon was NOT a program length commercial if it did not include PAID ADS for the product. So a GI JOE show, if it did not have paid ads for GI JOE, would not be a program length commercial.

CRITICS OF INFOMERCIALS

1. Karen Brown, researcher at Center for the Study of Commercialism, a DC based consumer organization. "Our position is that infomercials are inherently deceptive. They are just another example of the blurring of distinctions between entertainment and advertising."

2. George Gerbner, University of Penn Annenberg School of Communications, says "Infomercials contain propaganda that is incapable of being balanced. They provide people with information about life and the world that fits a certain advertising message." All ads have a message -- but infomercials, says Gerbner, are more cloaked.

Early 2000: NBC is selling jewelry inspired by soap opera "Passions."

1999: CBS sold an replica of a bracelet seen on its daytime soap opera Guiding Light (sold on the CBS web site).

Industry executives expect other such promotions to rise, as networks look to sell branded merchandise to boost revenue and cross promote their shows.

NBC, for example, owns the show Will and Grace, so it may try to sell products for the show (clothes, etc.).

Autumn 1998: Advertisers’ forum. "Forum for Responsible Advertising." Leading advertisers: Proctor & Gamble, Ford, Sears, Johnson and Johnson, Coke.

"We want access to high quality, family-friendly programming that attracts a mass audience," says P&G spokesman Gretchen Briscoe. "It’s going to take a collective industry effort."

Heavy clout from this group.

P&G: $1.5 billion on broadcast TV, cable and radio in 1998.

Ford: $575m, Sears $364m, Johnson and Johnson $669m, Coke $325m.

Total: Nearly $3.4billion.

Impact? Despite all of this, money still flowing to shows that are hardly considered "family friendly" -- such as Friend, Just Shoot Me. Both have a heavy dose of sexual themes.

Wall Street Journal. 8/11/99 "Big Advertisers To Commission TV Scripts for Families."

A group of major advertisers (Proctor & Gamble, GM, IBM, Johnson and Johnson, Sears Roebuck, AT&T and Wendy’s) are joining together to sponsor "cleaner" shows. They say they are fed up with sex and violence on prime time TV, so they are footing the bill for as many as 8 "family friendly" pilot scripts for shows to run on Time Warner’s WB network. Costs are about $1m, which is less than they might spend to air commercials during a single week of prime time programming. Scripts could be aired as early as autumn 2000. P&G says it won’t meddle with the writing of the scripts. Some industry observers wonder if WB can pull this off: offering so called "family friendly viewing" while still drawing an audience. However, others note that WB’s "7th Heaven" -- clearly a family friendly show -- has done quite well (and is the most watched show on WB).

A small number of program factories produce most of the TV that Americans view. Tens of thousands of hours of programming are telecast each week over about 60 TV networks (cable and over the air networks) and 1200 local TV stations. The biggest producers are: Disney, Warner, Paramount, Columbia, Viacom and Fox.

Typically, for all but the most popular series, the production company loses money for each episode of a drama or situation comedy it produces. The licensing fees paid by the networks to telecast the program simply do not cover the costs of making the programs.

1. A two-hour TV movie costs $4m to $5m; networks are willing to pay between $3.5 and $4.5 for most of these movies.

2. Single episode of a 60 minute dramatic program can cost as much as $2m. Producer can lose $500K to $750K per episode when the program is licensed for network viewing.

• Labor costs are high (union wage scales, overtime, huge salaries for stars)
• In dramas, location shooting rather than studio shooting is common -- and more expensive.
• Series can be very expensive. When it was on the air in the 1980s, Miami Vice, for example, was one of the most expensive weekly series ever produced for TV. The producers were losing so much money on it that they threatened to move the production from Miami to California to save money. NBC increased its payments to the producers, but this did not significantly reduce the deficit)

• The high cost of programming is one of the reasons there are so many situation comedies and reality programs (e.g., Unsolved Mysteries) on TV today. They are usually much cheaper than drama shows (such as Law and Order, NYPD Blue).
• Many low cost entertainment/"news’ shows such as Entertainment tonight, American Journal, Hard Copy.
• Changes in production, notably shooting outside Southern California. Vancouver BC a common place these days for a lot of shooting (union wages much lower than Southern California; production costs can be as much as 20 per cent less in Canada).
• High tech and action scenes, from other films, are inserted into shows. Saves money.

• Reruns. Lucrative prospect of competing a sufficient number of episodes (usually about 100) to put the show into reruns on local TV stations or cable networks.
• Producers own the shows. When the shows are first broadcast on a network, the network only pays for the right to show the program 2 or 3 times. The producers can then sell the rights to others to show the program.
• The revenues from the secondary sales is almost all profit. The original costs have all already been paid.
• Most of the money will go to the producers (although some will go to the stars).
• Both local TV and some cable networks thrive on showing these ‘off network" reruns.
• Stripping. Instead of showing a single episode each week (as the networks do during the first run of a program), the station shows a different episode each day. 5 days a week. This is called Stripping.
• The individual price per local station may not be terribly high for a show such as "Head of the Class," but if 250 to 300 stations pay for the rights to show the program, the total amount of money that goes to the producer can be huge.
• Some reruns are enormously popular. When the Cosby Show first went into reruns in 1990, it frequently drew larger viewing audiences that new shows. The same has held true for Seinfeld. Reruns of Seinfeld have often been #1 in their time slot, beating out new programming.
• The Cosby show earned $4.8 million per show in reruns.
• Most series do not go into reruns, but enough do to make all of this profitable overall.

6. Network ownership of shows.

Until the early 1990s, networks were not allowed to own their own shows. The US government feared that the networks would monopolize TV if they both owned the shows and showed them. But with the rise of cable, there clearly was no way that the networks could monopolize the industry -- and by the early1990s, networks were allowed to own their own shows.

As the competition for shows that will draw broadly as increased, so too have the licensing fees. NBC paid $13m per show for ER in a 5 year deal (starting in 1998). ER is not produced by NBC, not owned by NBC. But NBC needed the show, as it draws well with young men. When Seinfeld retired from his show, NBC needed a show that would continue to draw the young male audience. So ER was worth a great deal to them, and they had to pay a lot for it.

Given this kind of rising cost, there is a great deal of pressure for the networks to develop their own shows. It will clearly cut costs; they won’t have to bargain with producers. CBS owned a stake in all of its new shows in autumn 1999, as do Fox and NBC.