Changes in Network Structure and Ownership of US Broadcast Television Essay

Changes in Network Structure and Ownership of US Broadcast Television - Essay Example Traditionally the US television industry was guided by the sheer ethical standards of good programming and content presentation. The networks adopted the basic principle of understanding the viewers as the owners of the air and had been providing them with programmes treating them as sovereigns.The United States Broadcast Television industry has undergone a tremendous change in the last few years due to various factors like shift in the viewers' media-consumption habits, technological advancements resulting in new digital products and reduction in the advertising revenue. Grabbing audience, holding on to them and to monetize on the audience have become tough jobs for the Broad Cast companies with the advent of Internet sites like YouTube that offer television programming including shows from NBC with little financial gain for the networks. Not only the net works but all the media companies are facing the brunt due to the uncertain future of the media business. Before the year 2006 te levision companies profited almost entirely from producing, distributing and selling TV content. Success in those areas meant higher profits and returns for the stakeholders. However this trend had changed with the intrusion of online stores and a variety of digital platforms with which the TV media had to compete. This paper makes a study as to how this state of affairs has necessitated changes in the network structure and ownership of US Broadcast Television industry.Traditionally the US television industry was guided by the sheer ethical standards of good programming and content presentation. The networks adopted the basic principle of understanding the viewers as the owners of the air and had been providing them with programmes treating them as sovereigns. Providing true entertainment was the sole business motto of the network companies. Principles of free enterprise system guided the network companies to broadcast programmes with values and commercial advertising formed a minor part of these entertainers. But with the advent of internet the situation stated drifting and the advertising revenues started declining "Faced with competition from an array of digital competitors, which produce content of their own and sometimes even carry network programming, TV companies have seen their revenues shrink, along with the confidence of traditional Wall Street investors". (Anne Becker 2007) The competition from the digital competitors was the major hurdle for the network companies to continue to survive healthily as this competition started eating up their advertising revenue. This echoed in the quality of the content and programming expertise of the network companies as even the larger ones had to resort to job cuts and were unable to retain real talents by paying hefty salaries and perks. 3.0 Effect of Reduction in Advertising Revenues on Network Companies: One of the major problems identified as leading to the reduction in the revenues to the net work companies is the reduction in the advertising revenues. As against the increase in the ad-spending for the internet was predicted to scale up to 13 percent in 2006 the network-TV advertising remained flat without any increase and newspaper advertising fell 3 percent according to a report by TNS Media Intelligence. Such drastic changes in the revenues had forced the major network companies to cut the jobs and thereby reduce the cost to increase the profitability. "NBCU announced its layoffs after its broadcast network dropped more than 15% in the adults 18-49 demographic over two consecutive seasons and the company saw its profit plummet 10% during third quarter 2006". (Anne Becker 2007) Similarly MTVN has also resorted to job cuts after the share price of its parent company Viacom fell over the past year. MTNV had removed all the staff from its two cable networks, giving their responsibil ities to other staffers at MTV and VH1. 4.0 Commercials and the Web sites: Another important factor which needs consideration in falling revenues of the network TV companies is the shift in the advertising sponsors resorting to internet media than the Television media. Alex Mindlin (2007)