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Television 2.0
The Business of American Television in Transition by
Ted Magder
Before Reality TV
Around 1990s NBC Prime-time Television had a
fixed point of reference, it was Thursday night.
Advertisers were trying to reach audience
before the weekend.
NBC called Thursday night “Must See TV.”
Began with shows like “Friends,” at 8:00 pm
and ended at 11:00 pm when “ER” was over.
Before Reality TV
 This was an entire evening of mix of situation of
comedies and one-hour of drama. This lasted 15 years
with programs such as:
 Cheers
 Seinfeld
 Hill Street Blues
 The Cosby Show
http://www.youtube.com/watch?v=rcc41TitXPs
The Start of Reality TV
What came next was more surprising…
Zucker announced that NBC would reduce Scripted programs.
The first hour of prime time each evening would be devoted to
reality TV, games shows, and other types of format
programming.
He wanted to gain popularity on Social networking web-sites
and to Google’s $1.65 billion purchase of YouTube, that same
month, he called it“NBCU 2.0.”
ABC,CBS, and FOX had made similar moves, though without
the same public fanfare.
Zucker’s announcement for unscripted programs accounted
for 15 hours of prime-time programs a week, by comparison ,
the number of prime-time hours devoted to sitcoms was
roughly 10 hours a week, down from 20 hours a week in 2004

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Warner Media, LLC is an American media conglomerate owned by AT&T and headquartered in New York City. It was originally formed in 1990 as Time Warner through the merger of Time Inc. and Warner Communications. In 2016, AT&T announced an offer to acquire Time Warner for $108.7 billion, which was approved in 2018. The company owns assets including HBO, Warner Bros, DC Comics, CNN, TNT, TBS, truTV, and others. It produces film, television, animation and games and distributes sports programming like the NBA and NCAA basketball.

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Foxy Films is seeking $18 million from an investor to fund the prints and advertising (P&A) for their upcoming action gangster film "Days of Wrath". The investor would receive a 12.5% annual interest rate and have their investment fully recouped within a year of the film's theatrical release. After recouping the investment, the investor would receive 10% of the film's back-end profits. Foxy Films plans a wide theatrical release across North America and has distribution deals lined up for home entertainment, soundtrack, and product branding to maximize profits.

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This document provides an overview of the brand history of HBO, its competitors in the pay TV market, its strengths and weaknesses, opportunities and threats, and a positioning statement. Key points include HBO's founding in 1972 and introduction of successful original shows like The Sopranos and Game of Thrones. Competitors include other pay TV providers as well as online streaming services like Netflix and Hulu. HBO's strengths are its brand recognition and original programming, while weaknesses include its costs and censorship. The positioning statement positions HBO as providing high quality programming for those dissatisfied with other TV services.

The Start of Reality TV
 Since the summer of Survivor and Big Brother in 2000,
reality TV, or what is also referred to as “unscripted”
programming, has become a television staple in the
coveted time slots. What some perceived as a fad has
become the norm.
 Whatever it cultural and social resonance, reality
programming is now firmly entrenched in the business
model of American television, yet another sign that the
enterprise of television faces an uncertain future.
Reality TV comes to America
Friends and ER
NBC Thursday night line-up increased its prices.
Friends costs 5.5 million
ER 13 million
Making it television’s most expensive hour-long
drama and half an hour of network television.
Broadcasters: do not necessarily own the programs
they air, but they get a license from other firms.
In the case of Friends and ER paid a fee to Warner Bros.
Television, the show’s producer and owner, for the
right to air each show twice over the course of a season
and to control all advertising placed around them.
Survivor
 Represents entirely different Model
 The most obvious differences is that for Survivor, and shows of
its ilk, the on screen “talent” is dirt-cheap.
 Instead of handing its Producer, Mark Burnett, a license fee to
deliver the show, CBS agreed to share Survivor’s advertising
revenue and asked him to help presell the sponsorship.
 Burnett secured eight sponsors before the first day of principal
photography, selling most of the 30 second spots around the show
as well as prominent brand placements in the show itself.
 These 8 advertisers, including ANHEUSER-BUSCH, GENERAL
MOTOR,VISA, FRITO-LAY, REEBOK, and TARGET, paid
roughly $ 4 million each for a combination of commercial time,
product placement in the show and a website link. Next version of
Survivor advertisers shelled out close to $ 12 million before the
show went of air.

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The campaign promoted the new Ghostbusters film by placing iconic elements from the franchise in high footfall locations like London Waterloo station. A partnership with Metro newspaper amplified this through advertorials, competitions, and displays that reported strange happenings at the station. This generated over 50 million impressions on social media and boosted interest in the film by 10%. The campaign was a success, with the film becoming the UK's number 1 movie its opening weekend and grossing over £10 million.

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More to come
2005: New shows
THE APPRENTICE (NBC)
WIFE SWAP
TRADING SPOUSES
EXTREME MAKEOVER
HOME EDITION (ABC)
Almost 20 percent of prime-time program hours
consisted of reality programming.
http://www.youtube.com/watch?v=i5gX689YLXo
The Business of TV in
America
Since 1960 TV takes up almost 50 percent of the
time Americans spend with media products
and cultural events.
On average each American households
watches just over 1,600 hours of TV a year, the
challenge for Television’s managers and
programmers is to grab the attention of
viewers and hold on them for as long as
possible. That attention is sold to advertisers.
TV as a business does what any
business tries to do:
Is wrong to say that TV in America gives people what
they most want to watch or that TV responds primarily to
the interests and needs of viewers. Instead in light of the
house hold habit of TV viewing and the interests of
advertisers, TV executives try to produce or schedule shows
that are only marginally better than offering available at the
same time. The goal of American TV is to give people
programming that they are willing to watch or at the very
least, programming from which they will not turn away.
From time to time, hits emerge and certain programs
develop loyal following. But the day to day business of TV
doesn’t run on hits and loyalty. It runs on habit.
The effect of TV depends on Advertising:
Grant Tinker, who piloted NBC’s emergence as a
network power in the mid-1980s once said: “Tele-
vision would be wonderful if it were only on
Wednesday night.”
He was referring specifically to the problem of creativity:
there are only so many good writers, actors, and other
talented people to go around, while the medium of TV
requires thousands of hours of new program each year.

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Once a Program is Finished???
The cost of Making extra copies and distributing them
is virtually zero. Because most TV programming is
serialized, first copy costs are incurred for a number of
episodes in advance (the creativity deficit would that
much greater if TV consisted mostly of one time
programs) And until the program airs, it is virtually
impossible to predict its success--- sunk cost are high
and so is the risk of Failure.
Richard Caves refers to this Problem as “Nobody
Knows” Principle.
How to deal with Nobody Knows
Principle?
1. Deliver audiences in Buying Mood to advertisers:
viewers need to be tuned in but not unduly upset or
disturbed by the program’s content?
2. Stick to established program genre and avoid
challenging the genre expectations of viewers.
3. Recycle and copy successful show: On television,
imitation is the sincerest form of flattery
Reality TV, Formats, and the New
Business of Television. European
Producer and The Lure of
Formats
Reality TV was used to Reduce production cost and
Financial risk
Reality TV illustrated four significant changes to the
production side of TV
The growing Enthusiasm for prepackaged formats as a basis for
program production
The emergence of product placement or brand integration, as a
source of revenue to program producers
The increase tendency to use TV programs as the springboard
for multimedia exploitation of the creative property
The growing strength of European program suppliers in the
American and international television market.
Follow The Money: Before
and Beyond The box
Reality Shows demonstrate the viability of Three
business strategies that together may fundamentally
alter the logic of TV production.
1. Almost every show in the genre demonstrate the
growing importance of product placement or brand
integration.
For example: I Love Lucy one of the most popular show
on U.S television was sponsored exclusively by Philip
Morris cigarettes, with a variety of ad campaign built
around the show star Lucille Ball and Desi Arnaz

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Three business strategies
2. The search for new revenue is the expansion of
merchandise tie-ins.
For example There are now well over 150 Survivor-
themed products that are available in the United
States, everything from CDs and bug spray to board
games and bandanas.
Fear factor has teamed with ice cream manufactured
Baskin-Robbins.
Three business strategies
3. The search of new revenue streams is easily the
most revolutionary: it extends the “program” beyond
the confines of the box in the living room and
encourages audiences to pay to participate in the
show’s dramatic arc or to use other media to stay in
touch with the show.
Example online voting
On The air, online and On-
the-Go
Reality Programming
Attracts young viewer
Lowers production costs,
Offers opportunities for audience to engagement across a
variety of platforms,
End
The networks want to charge advertisers an additional fee
for the DVR audience. The advertisers want to know
whether DVR users were watching the ads at all.
But what Nielsen Company refers to as Anytime/anywhere
Media Measurement has reached the point where it is now
possible to offer data on audience attention during ad breaks.
This can be based on who is watching the ads VS. who is
watching the programs.
The 2008 television season will be the first to conduct
business using commercial rating. Television 2.0 may be on
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Key Citations
“NBC Finalizes Deal to Keep ‘Friends’ for Final
Season: Cast Will Get Raise”- Joe Flint, Wall Street
Journal online February 28, 2002
In 2002, Warner Bros. made last 22 episodes of the
series and received $6 million in license fees from
NBC, which covers about 80% of production costs
Warner Bros. owns the show. NBC just aired it.
Warner Bros. gets all the income from International
sales (Hungary)& syndication in the U.S.
Key Citations
“Friends’ Deal Will Pay Each of Its 6 Stars $22
Million”-Bill Carter, The New York Times, February
12, 2002
Considered the biggest deal ever for a 30 min. TV
program, when NBC and Warner Bros. made deal to
bring back 6-person cast
Paid $1 million each per episode
• That year Friends scored biggest ratings in 5 years.
President of NBC Entertainment, Jeff Zucker, said
“This is a great day”
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Reality tv ch 7 pres.

  • 1. Television 2.0 The Business of American Television in Transition by Ted Magder
  • 2. Before Reality TV Around 1990s NBC Prime-time Television had a fixed point of reference, it was Thursday night. Advertisers were trying to reach audience before the weekend. NBC called Thursday night “Must See TV.” Began with shows like “Friends,” at 8:00 pm and ended at 11:00 pm when “ER” was over.
  • 3. Before Reality TV  This was an entire evening of mix of situation of comedies and one-hour of drama. This lasted 15 years with programs such as:  Cheers  Seinfeld  Hill Street Blues  The Cosby Show http://www.youtube.com/watch?v=rcc41TitXPs
  • 4. The Start of Reality TV What came next was more surprising… Zucker announced that NBC would reduce Scripted programs. The first hour of prime time each evening would be devoted to reality TV, games shows, and other types of format programming. He wanted to gain popularity on Social networking web-sites and to Google’s $1.65 billion purchase of YouTube, that same month, he called it“NBCU 2.0.” ABC,CBS, and FOX had made similar moves, though without the same public fanfare. Zucker’s announcement for unscripted programs accounted for 15 hours of prime-time programs a week, by comparison , the number of prime-time hours devoted to sitcoms was roughly 10 hours a week, down from 20 hours a week in 2004
  • 5. The Start of Reality TV  Since the summer of Survivor and Big Brother in 2000, reality TV, or what is also referred to as “unscripted” programming, has become a television staple in the coveted time slots. What some perceived as a fad has become the norm.  Whatever it cultural and social resonance, reality programming is now firmly entrenched in the business model of American television, yet another sign that the enterprise of television faces an uncertain future.
  • 6. Reality TV comes to America
  • 7. Friends and ER NBC Thursday night line-up increased its prices. Friends costs 5.5 million ER 13 million Making it television’s most expensive hour-long drama and half an hour of network television. Broadcasters: do not necessarily own the programs they air, but they get a license from other firms. In the case of Friends and ER paid a fee to Warner Bros. Television, the show’s producer and owner, for the right to air each show twice over the course of a season and to control all advertising placed around them.
  • 8. Survivor  Represents entirely different Model  The most obvious differences is that for Survivor, and shows of its ilk, the on screen “talent” is dirt-cheap.  Instead of handing its Producer, Mark Burnett, a license fee to deliver the show, CBS agreed to share Survivor’s advertising revenue and asked him to help presell the sponsorship.  Burnett secured eight sponsors before the first day of principal photography, selling most of the 30 second spots around the show as well as prominent brand placements in the show itself.  These 8 advertisers, including ANHEUSER-BUSCH, GENERAL MOTOR,VISA, FRITO-LAY, REEBOK, and TARGET, paid roughly $ 4 million each for a combination of commercial time, product placement in the show and a website link. Next version of Survivor advertisers shelled out close to $ 12 million before the show went of air.
  • 9. More to come 2005: New shows THE APPRENTICE (NBC) WIFE SWAP TRADING SPOUSES EXTREME MAKEOVER HOME EDITION (ABC) Almost 20 percent of prime-time program hours consisted of reality programming. http://www.youtube.com/watch?v=i5gX689YLXo
  • 10. The Business of TV in America Since 1960 TV takes up almost 50 percent of the time Americans spend with media products and cultural events. On average each American households watches just over 1,600 hours of TV a year, the challenge for Television’s managers and programmers is to grab the attention of viewers and hold on them for as long as possible. That attention is sold to advertisers.
  • 11. TV as a business does what any business tries to do: Is wrong to say that TV in America gives people what they most want to watch or that TV responds primarily to the interests and needs of viewers. Instead in light of the house hold habit of TV viewing and the interests of advertisers, TV executives try to produce or schedule shows that are only marginally better than offering available at the same time. The goal of American TV is to give people programming that they are willing to watch or at the very least, programming from which they will not turn away. From time to time, hits emerge and certain programs develop loyal following. But the day to day business of TV doesn’t run on hits and loyalty. It runs on habit.
  • 12. The effect of TV depends on Advertising: Grant Tinker, who piloted NBC’s emergence as a network power in the mid-1980s once said: “Tele- vision would be wonderful if it were only on Wednesday night.” He was referring specifically to the problem of creativity: there are only so many good writers, actors, and other talented people to go around, while the medium of TV requires thousands of hours of new program each year.
  • 13. Once a Program is Finished??? The cost of Making extra copies and distributing them is virtually zero. Because most TV programming is serialized, first copy costs are incurred for a number of episodes in advance (the creativity deficit would that much greater if TV consisted mostly of one time programs) And until the program airs, it is virtually impossible to predict its success--- sunk cost are high and so is the risk of Failure. Richard Caves refers to this Problem as “Nobody Knows” Principle.
  • 14. How to deal with Nobody Knows Principle? 1. Deliver audiences in Buying Mood to advertisers: viewers need to be tuned in but not unduly upset or disturbed by the program’s content? 2. Stick to established program genre and avoid challenging the genre expectations of viewers. 3. Recycle and copy successful show: On television, imitation is the sincerest form of flattery
  • 15. Reality TV, Formats, and the New Business of Television. European Producer and The Lure of Formats Reality TV was used to Reduce production cost and Financial risk Reality TV illustrated four significant changes to the production side of TV The growing Enthusiasm for prepackaged formats as a basis for program production The emergence of product placement or brand integration, as a source of revenue to program producers The increase tendency to use TV programs as the springboard for multimedia exploitation of the creative property The growing strength of European program suppliers in the American and international television market.
  • 16. Follow The Money: Before and Beyond The box Reality Shows demonstrate the viability of Three business strategies that together may fundamentally alter the logic of TV production. 1. Almost every show in the genre demonstrate the growing importance of product placement or brand integration. For example: I Love Lucy one of the most popular show on U.S television was sponsored exclusively by Philip Morris cigarettes, with a variety of ad campaign built around the show star Lucille Ball and Desi Arnaz
  • 17. Three business strategies 2. The search for new revenue is the expansion of merchandise tie-ins. For example There are now well over 150 Survivor- themed products that are available in the United States, everything from CDs and bug spray to board games and bandanas. Fear factor has teamed with ice cream manufactured Baskin-Robbins.
  • 18. Three business strategies 3. The search of new revenue streams is easily the most revolutionary: it extends the “program” beyond the confines of the box in the living room and encourages audiences to pay to participate in the show’s dramatic arc or to use other media to stay in touch with the show. Example online voting
  • 19. On The air, online and On- the-Go Reality Programming Attracts young viewer Lowers production costs, Offers opportunities for audience to engagement across a variety of platforms,
  • 20. End The networks want to charge advertisers an additional fee for the DVR audience. The advertisers want to know whether DVR users were watching the ads at all. But what Nielsen Company refers to as Anytime/anywhere Media Measurement has reached the point where it is now possible to offer data on audience attention during ad breaks. This can be based on who is watching the ads VS. who is watching the programs. The 2008 television season will be the first to conduct business using commercial rating. Television 2.0 may be on its way.
  • 21. Key Citations “NBC Finalizes Deal to Keep ‘Friends’ for Final Season: Cast Will Get Raise”- Joe Flint, Wall Street Journal online February 28, 2002 In 2002, Warner Bros. made last 22 episodes of the series and received $6 million in license fees from NBC, which covers about 80% of production costs Warner Bros. owns the show. NBC just aired it. Warner Bros. gets all the income from International sales (Hungary)& syndication in the U.S.
  • 22. Key Citations “Friends’ Deal Will Pay Each of Its 6 Stars $22 Million”-Bill Carter, The New York Times, February 12, 2002 Considered the biggest deal ever for a 30 min. TV program, when NBC and Warner Bros. made deal to bring back 6-person cast Paid $1 million each per episode • That year Friends scored biggest ratings in 5 years. President of NBC Entertainment, Jeff Zucker, said “This is a great day” http://www.youtube.com/watch?v=vQtveTUZrS8