Originally published: November 21, 2008
Last updated: November 21, 2008 - 3:32pm
[Commentary] Is the system of broadcast networks and local affiliate television stations a broken business model? The strain on their dysfunctional paradigm is emanating from a devastating recession and the ongoing digital revolution. Both are permanently altering the rules of play for the networks. A case can be made for at least one of the Big 4 broadcast networks -- perhaps Fox or NBC -- emerging as a glorified general entertainment cable network within the next several years. The economic advantages: more steady ad revenues and consistent subscriber fees as content is distributed cross-platform. As for the TV affiliate part of the equation, its business model has been transforming for a decade against the backdrop of February's mandated broadcast-to-digital conversion. Network paid compensation has given way to affiliates paying to carry programs, and in turn, being paid by cable and other distributors for their signals. Exclusivity has given way to ubiquity. So the only unique commodity is stations' generally underestimated, under-monetized digital value of local news, content, community and advertising. Local TV stations will ultimately have to make it on their own as markets support only the best and most diverse (as in Hispanic and Indian stations), working in tandem with newspapers and cable operators.
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