Monday, May 24, 2010

Are We Watching The End Of Broadcast Television?

GE is selling NBC to Comcast and now there is speculation that ABC and CBS are also for sale. Obviously everything is for sale, but the greater question may be what does a potential sale indicate. "Among bankers, CBS appears to be garnering the most attention amid signs (Sumner) Redstone these days isn't dismissing out of hand the notion of selling CBS." As cable companies begin to pay retransmission fees for carriage, the cash flow looks strong. At the same time, ratings for broadcast erode as the cable model becomes more efficient. Will we be looking back and sale that the GE sale of NBC was the beginning of the end for broadcast television?

"While audiences will still show up in droves for tentpole events like the Super Bowl or an awards show, the increased popularity of cable is eating into broadcast networks' bottom line, which is further hampered by the high costs associated with producing series, steep sports-rights fees and expenses tied to owning a news operation. Also weighing on broadcasters is their ownership of local TV stations, which have been hit hard by the ad slowdown. Experts said the networks' real money-making opportunities lie in ancillary businesses, such as international syndication, DVDs and other merchandise, and ownership of a network isn't necessary to reap those benefits." So one day soon, the Super Bowl like other shows before it will move from broadcast to cable to potentially PPV. Affiliates will turn into local cable channels and national broadcast channels will be a distant memory.

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