[opendtv] Re: "And while the broadcast business has big problems in general..."

  • From: William Smith <wsmith@xxxxxxx>
  • To: opendtv@xxxxxxxxxxxxx
  • Date: Thu, 26 Jan 2006 13:32:40 -0500


Please see the KET web site..



Craig Birkmaier wrote:
> So Bert...
> If two huge media companies cannot launch successful broadcast 
> television networks, what make you think that local broadcasters can 
> attract viewers with local content and/or re-runs in the DTV 
> multiplex?
> Enquiring minds want to know...
> Regards
> Craig
> P.S. And how do DTV broadcasts appeal to the next generation of TV 
> viewers, who - according to this story - "are increasingly tuning out 
> of television altogether."
> Can they view them on their Video iPODs?
> http://www.forbes.com/2006/01/24/cbs-viacom-aol_cx_pak_0124network.html?partner=media_newsletter
> Media
> Ready For Prime Time
> Peter Kafka, 01.24.06, 6:30 PM ET
> NEW YORK - Can two mediocre broadcast networks make one decent one?
> That's the bet CBS and Time Warner are making by combining their UPN 
> and WB networks. The logic, according to the two media giants, is 
> that the combined network, to be called The CW, will be able to 
> attract the famously elusive youngsters who are increasingly tuning 
> out of television altogether.
> And while the broadcast business has big problems in general, and the 
> joint venture faces some particular stumbling blocks--for instance, 
> who's really going to steer the 50/50 operation, CBS's Les Moonves or 
> Warner Bros.' Barry Meyer?--there's actually a decent chance the 
> merger could work for both sides.
> The big picture is clear enough: Both networks, launched in 1995, 
> have gone after younger viewers, and both have failed. Both are also 
> money losers--The WB lost Time Warner $55 million last year, and CBS 
> lost about $20 million on UPN, Deutsche Bank analyst Dough Mitchelson 
> estimates--and neither has a show among Nielsen's top 20. But both 
> have had some success with shows targeted at young 'uns: UPN's 
> Everybody Hates Chris, for instance, and The WB's Gilmore Girls. 
> Combine the two, and you may be able to make a run at the big four of 
> CBS, News Corp.'s   Fox, General Electric's NBC and The Walt Disney 
> Co.'s ABC.
> "The notion of a fifth network is absolutely viable," said Bruce 
> Rosenblum, president of Warner Bros.' Television Group.
> That would likely be true no matter who was behind the fifth network 
> in question. Just by reducing the number of broadcasters by one, the 
> merger shrinks the inventory of prime-time advertising slots, which 
> should boost prices across the board, notes Media Metrics analyst 
> Laura Martin.
> But there is additional appeal for the two partners. Both have strong 
> studios--Warner in particular--that benefit not only when they place 
> a show on their own networks, but also when they can resell the same 
> show in syndication, on DVD or on whatever digital format consumers 
> end up adopting down the road. Combing the networks gives both a 
> better chance of getting their shows on the air to begin with, and 
> the two sides have already worked out an agreement that lets them 
> split revenue from any show either studio places on The CW.
> And while media mergers and joint ventures are notoriously tough to 
> pull off--Time Warner's Richard Parsons is still trying to sort 
> through the wreckage of the Time Warner-AOL deal, while Sony Corp. 
> and Bertelsmann are in the midst of a very public squabble about 
> their combined music operation--here the two companies are a better 
> fit than most. For starters, both are coming from pretty equivalent 
> positions of power. And the four executives who will be overseeing 
> the whole operation have all spent time together without breaking 
> into public acrimony: Moonves, Rosenblum and CBS's Nancy Tellem all 
> worked at Lormiar Television together, and Meyer worked with all 
> three at Warner.
> It's also probably not a coincidence that the deal was put together 
> by two corporate parents under particular pressure to dazzle 
> shareholders. Moonves needs to show investors that Sumner Redstone's 
> move to split Viacom into two different stocks will pay off by 
> letting him strike inventive deals. And Parsons, in particular, needs 
> to convince his investors they're better off sticking with him and 
> tuning out to rabble rouser Carl Icahn, who wants to break up Time 
> Warner. A new network won't do that by itself. But it's a start.
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William B. Smith - Special Projects Engineer  Email: wsmith@xxxxxxx
Technology Division                           ----------------------
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