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Chapter 7 - Broadcasting

from PART II - Media-dependent entertainment

Published online by Cambridge University Press:  01 June 2011

Harold L. Vogel
Harold L. Vogel
Affiliation:
Independent Analyst
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Summary

Programs are scheduled interruptions of marketing bulletins.

– HV

Marketing bulletins, in fact, are the essence of commercial broadcasting in the United States.

This chapter is concerned with the economics of radio and television broadcasting, a topic closely tied to developments in the movie, recorded music, sports, and other entertainment-distribution businesses. By its end, it should be evident that maybe Marshall McLuhan (McLuhan 1964) was onto something when he said, “the medium is the message.”

Going on the air

Technology and history

Broadcasting began the twentieth century as a laboratory curiosity; it ended the century as a business generating more than $50 billion per year. But monolithic the industry is not. In fact, many subsegments compete vigorously with each other.

Strictly speaking, commercial broadcasters sell time that is used for dissemination of advertising messages. In actuality, though, what is sold is access to the thoughts and emotions of people in the audience. As such, then, broadcasting in any and all of its forms is an audience aggregation business. Companies selling beer prefer to buy time on sports-events programs, whereas toy and cereal manufacturers prefer time on children's shows. And the larger the audience the better.

To distribute commercial messages to audiences, or conversely, to deliver audiences to advertisers, four basic broadcast media have evolved over the past 80 years: AM (amplitude-modulation) and FM (frequency-modulation) radio and VHF (very high frequency) and UHF (ultra-high frequency) television. All these technologically defined media operate under identical macroeconomic conditions but different microeconomic conditions.

Type
Chapter
Information
Entertainment Industry Economics
A Guide for Financial Analysis
 , pp. 287 - 327
Publisher: Cambridge University Press
Print publication year: 2010

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2010, Idol
Dancing With the Stars, which actually attracted more viewers (23 million vs. 21.8 for Idol)
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Ratings Loss, but Not in Its Pocketbook,” April 7, 2010, and “Reality TV, Ripening in the Heat of Summer,” New York Times, May 29, 2006
Carter, (2006), with Fox's American Idol
(New York Times, May 14, 2007)
NBC's Tonight Show with Jay Leno, can also be exceptionally profitable. In 2007
As of 2004, costs for Tonight
Friends in 2004 generated an estimated $2 million for a 30-second ad, which is close to Super Bowl prices and relatively high for an estimated 50 million viewers
The top-rated telecast of all time was the final (1983) episode of M*A*S*H
Wall Street Journal, April 27, 2004 and also Steinberg, (2005)

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  • Broadcasting
  • Harold L. Vogel
  • Book: Entertainment Industry Economics
  • Online publication: 01 June 2011
  • Chapter DOI: https://doi.org/10.1017/CBO9780511976803.009
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  • Broadcasting
  • Harold L. Vogel
  • Book: Entertainment Industry Economics
  • Online publication: 01 June 2011
  • Chapter DOI: https://doi.org/10.1017/CBO9780511976803.009
Available formats
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  • Broadcasting
  • Harold L. Vogel
  • Book: Entertainment Industry Economics
  • Online publication: 01 June 2011
  • Chapter DOI: https://doi.org/10.1017/CBO9780511976803.009
Available formats
×