Broadcasting, Programming, And The Audience Essay, Research Paper
Broadcasting, Programming, and The Audience
Steiner’s Model
Steiner’s model on programming preferences and broadcasting choices
tries to show how stations come to the conclusion of what programming to show.
This model goes on the assumption that broadcasters will go after the largest
audience possible.
Going on the information given about this hypothetical situation, we can
predict what each of the four stations in this market will show.
There are three distinct audience preferences. The first groups of 1200
viewers has a first programming preference of sitcoms and a second choice of
soaps. The second group numbers 900 viewers and would pick cops first and soaps
second. The third group, 500 viewers, likes soaps first and sitcoms and their
second choice.
This model says that the audience will watch their first choice first
and then the second choice, but only is their first choice is not available.
Let’s say that the Federal Communications Commission licenses station A
in their market. Looking at the viewer preferences, station A would start to
broadcast soaps. By show soaps, it would capture a market of 2600 viewers. All
viewers would watch because soaps is their first choice or it is their second
choice but their first is not available.
The FCC then offers a license to station B. After examining the audience
sizes, stations B also starts to show soaps. By programming to this audience, it
splits the soaps market with station A and both of them have 1300 viewers.
Station B does not pick another programming because no other choice can
offer more than 1300 viewers.
When the FCC offers a license to station C, things will definitely
change in this market. Station C sees the biggest audience available is the
sitcom market with 1200 viewers.
But when station C takes that 1200 viewers from the soap audience which
hold sitcoms as their first choice, station A and B will both drop to 700
viewers. They now have to make a decision. Both can find larger markets
elsewhere.
One station, and it does not matter which one, will switch to cop shows.
For this hypothetical, station B would choose cops for 900 viewers.
Station A, who still is showing soaps, now only has 500 viewers. It does
not like that, so it starts to show sitcoms. Audience 3, with 500 viewers, now
is watching sitcoms because there are no soaps out there. Station A and C are
both showing sitcoms and are splitting a viewer audience of 1700 for 850 each.
Now that the viewers are confused about what station is showing what,
the FCC offers a fourth license to station D. After examination, station D
decides to start broadcasting sitcoms in competition with stations A and C. All
three stations have an audience share of 566. That is more than the 500 soap
viewers or splitting the 900 cops viewers with station B.
Although Steiner’s model is not too far off what happens in today’s
television landscape, it does have a couple of drawbacks that keeps it from
being a true model.
Steiner does not take into consideration that some audiences are more
valuable to advertisers than others. Because advertisers want certain viewers,
stations might program to that audience to attract more advertising dollars.
Steiner also assumes that as stations go into competition with another
station, they will split the audience equally. That is not always the case.
Viewers will watch the station they believe has the better quality, even if
there are two or three stations showing the same thing.
This model does offer some insights on how stations and networks make
decisions. Just look at the TV Guide and see how many sitcoms there are on any
given night.
This also shows why some minority viewers never get programming directed
at them. The stations are going to the majority audiences which have larger
numbers. The minority viewer preferences, under these model, have to have
another station before they get to see their shows, in this situation.
First Copy Costs
First copy costs in the newspaper industry are the fixed costs of owning
a paper and printing the first one.
First copy costs include the money spend on items that are necessary for
the newspaper to be printed. These fixed costs do not vary as the number of
papers increases or decreases. Because they do not vary, they are very important
and must be covered by advertising and subscriptions.
These fixed costs include the physical plant, the presses, the pressmen,
reporters, photographers, other staff members and the delivery trucks.
The interesting things about fixed costs is that you have to have them.
You can not scrimp or just not buy them. To cut corners, a paper does not hire
reporters, but how does it cover the local news? Whether or not you print a
paper, you still must pay for that stuff.
To figure the first copy costs of a newspaper, the fixed costs and the
cost of the paper and ink of the first issue off the press are added together.
For instance, let’s say that the fixed costs of a newspaper is $1 million and
the first issue costs $1 to print. The first copy costs $1,000,001.
Looking at this, it sounds like newspapers would never make any money,
but we have not figured in variable costs. These include the paper, ink and
related costs of running the press. As the quantity of papers goes up, these
prices usually go down. As the quantity continues to go up, the average cost
comes down and each paper gets cheaper and cheaper.
First copy costs keep many papers from owning their own presses. Large
dailies must own their own presses in order to meet distribution deadlines and
ensure that their paper gets printed on time. Smaller papers can not afford that
first copy cost, so they have to contract with other to print their paper.
First copy costs are a determining factor in how a paper is operated.
Whether it owns it own presses or not, the size of its staff and how often it
prints is all tied into these first copy costs.
Economy of Scale with Cable TV
By the nature of the beast, cable operators normally get exclusive
franchises to supply a community with their cable service; so talking about
competition in the cable industry sounds like an oxymoron. But there are signs
that it might actually compete in a way.
Less than 50 cities in the United States are overbuilt, or have more
than one cable provider. Yet studies show that those overbuilt cities have lower
basic cable subscription rates, $14.31 compared to $17.31.
Can competition within the cable system be created?
Probably not. The barriers against entry for new cable operators in a
specific market are great.
To begin with, the new operator must get a franchise agreement with that
city. The incumbent franchise will not stand still for this. Those in the local
government also will fear that the incumbent franchise might change benefits or
disturb the local political situation.
Economics of Scale would suggest that the incumbent would have lower
average costs because they are already there and have a better distribution
system. The second franchise would have high entry costs because they have to
string their own cable and many times they have to bury the new cable. This
additional work means high construction costs and community aggravation as they
tear up roads and yards.
The incumbent can employ delay tactics to make it very hard to start up
new franchises. From political pressure to lawsuits to dropping price and
keeping their customers happy, delays will make the new guy on the block
discouraged and out.
Within the cable operator networks, like TCI or CableVision, networks
themselves own or have a financial interest in some of the channels they carry.
Time-Warner owns TBS, CNN and a host of other channels started by the Turner
Broadcast System.
Although this sounds like a serious violation of the anti-trust laws, no
contest has been put up against this practice. In fact, it has been shown that
multi-system operators and overbuilt cities’ operators are more likely to
provide channels owned by other networks.
Carrying their own channels allows networks to increase profits and
helps keep subscription rates down. And, as a practical matter, cable systems
need channels to put out there for people to watch. Owning or having financial
interest in channels ensures that they have programming to carry.
With all the things going against the competition of cable systems, the
market demand for cable is elastic. The Crandall study, sponsored by TCI, showed
that an elastic rate of 2.2 means that as subscription rates go up 1 percent,
2.2 percent of the subscribers will cancel their service.
As the market show elasticity, the reality is that is normally does not
work that way. To persuade subscribers to take their higher rates, cable
operators offer new channels along with the rate hike. The number of channels
has traditionally been a measure of quality and as “quality” goes up, so can the
rates.
Cable in the near future will see some competition from sectors outside
of the cable industry. The Telecommunication Act of 1996 will make it easier for
telephone and utility companies to go head to head with the cable operators.
This might change the competition landscape of cable TV.
Programming To the Minority Audiences
Because networks and broadcasters look to capture the largest audience
possible, many times the minority tastes are ignored. These minorities now have
more choices today than they did before as technology expands.
Steiner’s model described how broadcasters went after larger audiences
and skip over minority tastes. As technology advances and more stations are
introduced, Steiner’s model would suggest that those minority tastes were met.
In a situation where government regulates a small number of broadcast
stations, minority taste audiences have little recourse. The only option that
they have is to petition the government to force the stations to program to them.
Such was the case with religious groups. They got the Federal Communications
Commission to make stations allocate time for specific religions and their shows.
In a government sponsored market with a limited number of channels, some
programming for the minority tastes will appear. The government would sponsor a
channel that showed minority taste programming. On the down side here, the other
broadcasters will continue to ignore minority tastes because their needs are met
somewhere else. Broadcasters will continue to aim for the majority markets.
Today, with an unlimited number of channels available, minorities have
programming provided to them. Those with minority tastes can now start their own
channel to cater strictly to themselves. Whatever their tastes, they will have
it.
The benefit of unlimited channel supply is that the market audience
keeps getting more and more programming. Once someone see a type of programming
work and make money, they might go after the same market. Broadcasters who once
avoid that type of programming can now start another channel and tap into that
market without detracting from its majority audience programming.
As the technology improves and allows more and more minority groups to
get involved with broadcasting, we will start to see a sharp increase in
specialty channels; more than what we currently see.