the tv networks play a different game.

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  • December 14, 2016

Gruber posted on Monday about how the non-traditional TV “net­works” are whoop­ing the likes of ABC, CBS, NBC, and Fox, at least when it comes to broad­cast­ing high-quality, award-worthy content.

One can rea­son­ably argue that the broad­cast net­works have always pro­duced mostly garbage, but the real change is that the broad­cast net­works have com­pletely missed the boat on the meg­amovie rev­o­lu­tion — shows that “take tele­vi­sion seri­ously as a medium”. That’s obvi­ously true for dra­mas like Game of Thrones and Westworld, but I think it’s true for come­dies, too. Consider the elim­i­na­tion of the laugh track.

He’s not wrong, except with the impli­ca­tion that the broad­cast net­works ever had a chance not to “miss the boat.” I’m not a TV-industry guy, and my under­stand­ing of that eco­nomic world is lim­ited to hav­ing lived in Los Angeles for 30+ years, but it seems to me like the big three/four can’t be expected to com­pete with “net­works” that play by dif­fer­ent rules.

The broad­cast­ing par­a­digm is based on a sin­gle foun­da­tion: rev­enue is depen­dent on rat­ings. That’s because rev­enue comes from ad rev­enue, and broad­cast­ers’ ad rates are depen­dent on their rat­ings. The trick of the broad­cast network’s eco­nomic model is to charge adver­tis­ers more for ad time than they spent to gen­er­ate the rat­ings required to charge the adver­tis­ers those rates.

That model results in decision-makers who are risk-averse. Why take a chance on a new prod­uct that has a decent chance of fail­ure — even when it’s a new kind of con­tent, or even a lit­tle change like laugh track elim­i­na­tion, that you  actu­ally believe in — when you have a sure-thing that’ll be good enough?

Furthermore, the broad­cast net­works’ rev­enue model tends to reward pop­u­lar taste (and its cousin, low-brow pro­cliv­ity) over crit­i­cal qual­ity. How many episodes of CSI and its sev­en­teen spin­offs did CBS air? (I’ll tell you: way too many.) Were any of the CSI fran­chises ever con­sid­ered by any­one to be high-quality drama wor­thy of crit­i­cal acclaim? Nope. But they kicked ass in the rat­ings for a long time, so they made CBS a huge amount of money.

And that’s why net­works only care about Golden Globes and Emmies if win­ning them gen­er­ates buzz, higher rat­ings, and (there­fore) higher ad rev­enue. (And maybe because actors/directors/producers like win­ning awards, and happy actors/director/producers are the­o­ret­i­cally good for net­works, at least to a point.)

But that for­mula isn’t a guar­an­tee. Plenty of crit­i­cally acclaimed shows have been rat­ings duds. If NBC or ABC or CBS has a choice between an extra point-and-a-half in a key demo­graphic and ten Golden Globe nom­i­na­tions, they’ll always pick the for­mer. And that’s why they air the con­tent they air, and they’ve con­ceded the tro­phies to Netflix, Amazon, and the cable net­works that can (or at least hope they can) make money on high-brow.

None of this is news. This was the case back when HBO was rak­ing in award hard­ware for The Sopranos. At the time, plenty of peo­ple let them­selves believe that HBO was at an advan­tage because con­tent cre­ators could depict vio­lence, nip­ples, and curse words. But their real advan­tage was always that they could afford to take a risk on seri­ous episodic drama, which had the poten­tial for a mas­sively lucra­tive pay-off for them in the long term (in the form of sub­scribers who were hooked). The net­works play a short game in which last night’s rat­ings mat­ter right now. While this isn’t uni­ver­sal, and (I’ve been told by friends in the indus­try) it often isn’t quite so sim­ple, this par­a­digm is still at the core of how the broad­cast net­works operate.

Gruber might be able to relate. He loves to tease the Android mak­ers (and more so igno­rant Wall Street folks) who go on and on about mar­ket share, and who bash Apple’s low per­for­mance in that par­tic­u­lar met­ric. He’s observed all along (before any­one else really noticed) that Apple’s eyes aren’t on how many hand­sets or lap­tops they ship, but on how much money they make on the ones they do. (Because you can sell lots of phones if you don’t charge much for them. But that also means you won’t make much money.) So Apple is happy not to race to the bot­tom of the profit bar­rel in search of mar­ket share, because that mar­ket share doesn’t make them enough — or any — money.

Jon, here’s the thing: the net­works may have missed the boat on the lat­est and great­est trends in TV. But their execs don’t care, because their eyes aren’t on Golden Globe stat­uettes, but on how much money they’re mak­ing for their net­works. And spend­ing a ton of money to make a show that isn’t a def­i­nite weekly rat­ings win­ner isn’t a smart play for them.

(For the record: I hate this eco­nomic model because I like qual­ity pro­gram­ming. And most of my favorite shows right now are on Netflix or Amazon. I’m just say­ing that it the net­work broad­cast­ers “missed the boat,” they did so because they made a con­scious deci­sion to stay on dry land. Is that cow­ardly of them? Sure. Does it result in bland, bor­ing net­work tele­vi­sion? Generally, yes.)