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TV Revenue Streams Dictate Content

Jessica Zech |
November 9, 2012 | 12:16 p.m. PST


A serial killer must regain his sister’s trust after she caught him taking a life. A hopeless romantic got one step closer to telling his kids exactly how he met their mother. An aging country music star has to decide if she wants to go on tour with a young, up-and-comer whom she cannot stand.

As season openers aired and new shows premiered, viewers were reminded of television’s current trend.

Courtney White, a critical studies PhD candidate at the University of Southern California, attributes to what she calls “quality television,” shows that are perceived to have higher artistic quality and tend to air on premium cable.    

Premium channels, like HBO and Showtime, have less creative and financial limitations than broadcast networks do because their revenue mainly depends on subscribers. Networks, like NBC, ABC, CBS and FOX rely on advertisers, which influences their content.

“Simply put, the networks need to reach as many people as possible to maximize their revenues. For HBO, as long as you keep subscribing because, say, ‘Girls’ is on, that's a win for them and they don't need everyone to watch,” explained Brian Lowry, Variety’s chief television critic.   

As a result, network shows tend to deal with subjects that appeal to a lot of viewers to get higher ratings. Subscription shows do not cater to advertisers so they can play to niche audiences. Some basic cable channels, which do not require a subscription, also have shows like “Mad Men” and “Sons of Anarchy” that attract a niche market.

“Channels like AMC and FX use such shows to brand themselves as a channel cable operators have to carry because they have shows that have strong bonds with a core audience,” elaborated Lowry. He spent seven years writing about the television industry for the Los Angeles Times before joining the Variety staff in 2003.  

White said premium channels do not have to follow Federal Communications Commission (FCC) regulations as networks do. Subscribers actively choose and pay to bring premium channels into their homes, so they are not censored and thus involve more explicit content.

White also said because advertisers do not limit subscription, their shows have more length flexibility and are not written for commercial breaks and often have bigger budgets.

This creative and financial freedom has fashioned an environment for what White calls television auteurs, creators whose personal vision is reflected in their work.

“Someone like Matthew Weiner (“Mad Men”) or Vince Gilligan (“Breaking Bad”) couldn't hand off a concept that complex to just anyone, so they stay all the way through – as opposed to going off to create something else, which often happened in the past – and complete their vision,” asserted Lowry.

Howard Rosenberg, a Pulitzer-prize winning television critic who wrote for the Los Angeles Times for 25 years, dubbed “The Sopranos” a “watershed moment” for television. The series, which focused on a mob boss who is also a family man, proved a show with a complex, anti-hero protagonist could be successful.

At the center of “Weeds” is a housewife turned big time marijuana dealer. The protagonist in “Boardwalk Empire” is a politician running an illegal alcohol business during prohibition. In “Breaking Bad,” a chemistry teacher starts cooking meth to ensure his family’s financial security after he is diagnosed with cancer.

Even though quality television is on the rise, networks and subscription channels are deciding how to better monetize television.

When television first started there were only three networks and audiences had no other choice but to watch shows with commercials. Now with DVR, online streaming and pirating, many viewers are not watching shows when they originally air and are skipping the commercials. To combat this, networks and subscription channels have turned to product placement so advertisements are embedded directly in the show.   

Lowry said he thinks advertisement-supported channels will survive, but there will be more platforms like Netflix, HBO Go and Hulu for people to watch shows on demand.

“There's going to be a lot more a la carte programming and a heightened ability of viewers to punch up whatever they want to watch, whenever they want to watch it,” said Lowry. “How that’s paid for, frankly, is something the whole industry is wrestling with, but nobody has a definitive answer.”  


Reach Contributor Jessica Zech here.



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