Is Network TV's Model Lost?

There has been no shortage of lip service about recalibrating the economics of the network television business. And to be sure, the studios have felt the hot knife of financial streamlining. But while brutal layoffs have jettisoned worker-bee staffers, top talent is still commanding premium rates. The network-studio relationship still comes down to supply and demand. And the paradox is that while the broadcast networks are strapped for cash—a direct result of a fragmented marketplace— executives believe that is exactly why they need to keep spending to generate hits. "As much as we all like to talk about managing costs," says one studio head, "costs will continue to escalate because the consumer will continue to demand a higher-quality visual experience in a world of dispersed audiences." And that, aided by a healthy dose of inertia, is how a broken model perseveres. So, for all the talk of year-round development and reinventing the business, things often end up looking the same. And in 2010-11, the process is looking like business as usual.