For four decades, they were the unrivalled kings of American television. As recently as the 1979-1980 television season, 90 per cent of Americans who watched prime-time television tuned in to the U.S. networks. But in recent years, cable and other small-screen options have precipitated a drastic fall from grace for the Big Three— ABC, NBC and CBS. By last season, according to results released this month by the Chicagobased A.C. Nielsen Co., that figure had dropped a sharp 29 percentage points, to 61 per cent of viewers—dipping to an all-time low of 50 per cent one week in July. As they head into the new season, faced with shrinking audiences and brutal competition, the onceindomitable networks are licking their wounds. Said George Frajkor, professor of journalism at Carleton University in Ottawa: “In the United States, if not in Canada, the whole concept of a network may be going down the drain.” Indeed, the U.S. networks are fighting for their lives. Last June, in response to the continual erosion of their ratings reported by Nielsen’s electronic “people-meter,” officials at the three U.S. networks banded together to announce that they would disregard Nielsen
THE SPREAD OF CABLE AND OTHER INNOVATIONS ARE DEVASTATING THE BIG THREE'S SHARE OF THE AUDIENCE
figures in the 1990-1991 season, vowing instead to use their own in-house methods to determine audience numbers. And in another show of unprecedented solidarity, they formed their first cross-network association earlier this year to actively promote network TV as an advertising vehicle. Individually, too, the beleaguered networks have plunged into aggressive marketing schemes to win back advertisers. The Big Three claim that they are responding to the crisis with more innovative programming and by giving the public more of what it
wants. But, despite a few bright spots, the new season’s lineup rarely rises above the mediocre (page 66).
However, it remains unclear whether any measures will be able to revive the American networks. Indeed, their decline is part of a larger revolution being played out on the small screen as a result of viewers’ dramatically increased options. With the proliferation of video cassette recorders (VCRs) during the past decade, many viewers frequently circumvent direct broadcasts altogether by playing prerecorded material or videotapes that they have bought or rented. Recent industry figures show that video movie rentals are now declining, but the biggest threat to the networks— the cable services—is still growing. The cabling of America is taking place more than a decade behind the growth of that service in Canada. But with its capacity to deliver as many as 38 channels, cable is giving Americans access to a raft of new services, many of them so-called narrowcasters aimed at a specific audience. Within the next decade, the choices
will again increase dramatically as the cable companies replace their existing copper cables with glass fibre, which has a dramatically higher channel-carrying capacity.
Meanwhile, the Los Angelesbased Fox Broadcasting Co., founded in 1986 by Australian entrepreneur and media baron Rupert Murdoch, is mounting an increasingly successful challenge to the U.S. Big Three. The burgeoning network, which owns seven stations and sells its programming to 126 affiliates, has a lineup including such unconventional series as the lowbrow Married. .. With Children, where hemorrhoid jokes are standard fare, to the animated hit The Simpsons, about a disaffected working-class family. Said Jeremiah Ezekiel, director of the annual Banff Television Festival in Alberta: "With the incredible growth of cable, Americans now have so many alternatives to what has always been on the box, and some of those alternatives can be pretty exciting.”
In Canada, the two English-language national networks, the publicly owned CBC and private CTV, are more accustomed to having to share the small screen with other services. The second most heavily cabled country after Belgium, Canada was already 60-per-cent wired in 1975—the current figure is 72 per cent. As well, the U.S. channels have always been widely available to Canadians. As a result, despite the invasion in recent years of such specialized services as TSN (sports) MuchMusic (rock videos) and Newsworld, CTV and the CBC have each lost only two to three percentage points of their market share over the past decade, currently estimated at about 18 and 20 per cent, respectively.
By contrast, the major U.S. networks had the airwaves pretty much to themselves in the early years of television. The NBC station W2XBS launched the era of scheduled television when it broadcast a speech by then-President Franklin D. Roosevelt opening the 1939 world’s fair in New York City. In that same broadcast, NBC president David Samoff spoke eloquently about “the birth in this country of a new art so important in its implications that it is bound to affect all society.” It did—and so did the Big Three. By the end of 1949, 92 of the 98 operating stations in the country were network-affiliated, and by 1980, with almost 800 stations across the United States, about 80 per cent were network outlets.
Throughout those decades, cable television was on the margins of American TV. Originally a means of transmitting television signals to rural locations, it began to grow in importance only when it was introduced to U.S. cities and suburbs in the late 1970s as a means of improv-
ing reception where highrise buildings interfered with signals. But in the United States, the cable companies did not simply rebroadcast the networks’ signals, as the companies originally did in Canada. Many of them started their own channels and began producing new programming for them. The most successful among
them include Home Box Of-
fice, which specializes in movies and entertainment events, the all-news Cable News Network (CNN), allsports ESPN, and MTV, which features music videos and interviews with pop stars.
Now, 59 per cent of U.S. households with a television set are wired for cable— more than a threefold increase from 10 years earlier.
The Canadian Radio-television and Telecommunications Commission (CRTC) heavily regulates the domestic cable industry, but U.S. cable companies, deregulated in 1984, have almost unchecked control over what
they carry and how much they can charge. Last month, however, Congress approved legislation that could impose stricter limitations on what American cable companies may charge. Whether or not those controls are implemented, the industry already has a powerful infrastructure in place. In all, there are now 65 American cable networks and more than 9,000 local cable delivery systems across the country, providing roughly half of U.S. households with more than 30 TV channels.
Alongside all-movie, all-comedy and all-weather channels are such unique offerings as the New Yorkbased J Channel, which features pornographic movies and advertisements for escorts. There are channels for fundamentalist Christians and channels for shopaholics. The Cowboy Channel, partly owned by country singer Willie Nelson, is set to begin transmissions to five million homes this fall. And the Los Angeles-based Science Fiction Channel is scheduled to start up next spring.
Such options have helped to transform U.S. cable into an economic powerhouse—and a formidable threat to the Big Three. In 1981, advertisers spent $142 million to promote their products on _ cable. This year, the figure is an o estimated $2.8 billion—an in-
t; crease of 56 per cent over 1989
t; alone. In the same period, firstplace NBC witnessed an eight-percent drop in its $3.5-billion ad revenues. Said Farrell Reynolds,
former president of Atlanta’s Turner Broadcasting System, which counts CNN among its broadcast outlets: “Advertisers are attracted to specialized programming like moths to a flame.”
Fox, meanwhile, is playing the networks’ game, biting into their audience—and advertising revenues—with shows that have a broad appeal. This month, Fox has created nine new series, allowing for a fourth and fifth evening of programming. The broadcaster also has plans for a sixth and seventh evening to be added in each of the next two years. Innovative and flashy in its programming, Fox has built an especially loyal following among viewers in their teens and 20s, a demographic group prized by many advertisers. The results have been impressive: last season, when it was on the air only three nights a week, Fox scored a 6.6-percent share of the viewers
tuned in to prime-time shows—one-quarter of the audience for first-place NBC. Riding on that strength, it has almost doubled its advertising sales, from $350 million last season to a current $630 million—more than half the $1 billion sold by third-place CBS for 1990-1991.
Stinging from those competitive threats, the major networks have also had to defend themselves against the findings of people-meters, push-button devices that electronically record the viewing habits of each person in a household. Distributed to 4,000 U.S. homes by Nielsen, the binder-sized electronic devices have reported slow but steady declines in network audiences since their introduction in 1987. People-meters are also in 1,500 Canadian homes, but the domestic networks say that their results are not drastically different from those of the notebook-based ratings system that the meters replaced. That is not the case now in the United States. Last May, Nielsen— which has been gauging the TV viewing habits of North Americans for decades—stunned the industry by reporting that average prime-time audiences for the Big Three had dropped by four per cent since January alone—a loss that cost first-place NBC, for one, $46 million in free advertising for clients who had been promised larger numbers of viewers.
Spokesmen for the networks said that people-meters were inaccurate and announced that, beginning this fall, they will use viewing trends over several years to help estimate how many people are tuned in to a particular program. Many advertising executives expressed dismay at that unilateral decision. Said Betsy Frank, senior vice-president of television information at the New York-based advertising firm Saatchi & Saatchi: “When people get hungry, they occasionally get a little less professional and change the way they do business.”
Unmoved, the networks are forging ahead with the new system, and with other initiatives aimed at selling their worth to advertisers. Last May, they formally joined forces in an unprecedented attempt to shore up their collectively sagging fortunes, contributing $380,000 each to found the Network Television Association (NTA). Its mandate: to promote the virtues of network TV to advertisers through such methods as audience testing and advertising. Said NTA president Peter Chrisanthopoulos: “We feel we need to set the record straight. People have been bashing the networks for too long.”
At the same time, the individual networks have been developing innovative marketing strategies to attract and retain advertisers. CBS broke new ground when it agreed to show a Coca-Cola machine in episodes of the sincecancelled TV 101 last season. Earlier this year, ABC’s daily Good Morning America devoted entire weeks to single topics, such as parenting, and then sold time to advertisers making related products. For its part, NBC has just launched a “McMillions on NBC” promotion involving McDonald’s restaurants across the United States. Each day, the restaurants give customers cards showing the name of an NBC show airing that evening and a nine-digit num-
ber. The cardholder can win $1 million if the right number appears on the screen during the program. Said Jerome Dominus, senior vicepresident of sales at CBS, which last year launched a similar campaign tied to the K-Mart department-store chain: “We are finding extra ways for advertisers to get more out of their sponsorship than sending us a commercial and we run it, thank you very much.”
But one of the biggest challenges facing the networks in the 1990s remains the creation of programming that will compete with the diverse—and often offbeat—offerings on cable. Such current shows as ABC’s Twin Peaks, by renegade film-maker David Lynch, indicate that at least one of the Big Three is prepared to take some artistic risks. And all of the networks appear to be following Fox’s lead this season and introducing shows with off-color content. CBS, for one, has created Uncle Buck, a comedy series peppered with references to flatulence. Said president of programming Jeffrey Sagansky: “Our statement is that CBS is not stodgy, not the CBS of old.”
NBC’s concern about improving programming has led its executives to look to Canada. Last June, the network aired the two-part, CBCproduced drama Love and Hate, about the murder case involving Saskatchewan cabinet minister Colin Thatcher and his wife, JoAnn. The second instalment of the show got better ratings than any other program on U.S. television that week. Soon afterwards, NBC chairman Brandon Tartikoff entered negotiations with CBC executives to secure his network’s first rights to future CBC-produced shows.
Meanwhile, formidable new technological changes are looming. Among those are the plans of cable companies in both countries to develop fibre-optic delivery systems. Using glass threads to replace wire cable by the mid1990s, cable companies will be able to add about 50 more channels while providing advertisers with even more distinct audience niches. As well, in the United States, two companies are preparing to introduce satellite systems that will send TV signals to subscribers’ cerealbowl-sized receiving dishes. So far, neither service is being marketed in Canada. But another potentially strong contender for viewers’ time is entering the country. It is pay-per-view television, a system under which subscribers pay cable companies for watching specific programs. Edmonton-based Allarcom Pay Television Ltd. has just begun a two-year trial of the service in Saskatchewan, which is available to 20 per cent of American cable subscribers.
Regretting their earlier complacency, network executives vow that they will continue to play a big role on the small screen. Said ABC vice-president Alan Wurzel: “For many years, we were the only game in town and, unfortunately, we behaved that way.” Now, he added, “our fate is in our hands.” But as the former rulers of American television fight back, the forces arrayed against them are more formidable than ever.
VICTOR DWYER with ANNE GREGOR in Los Angeles