2004 Annual Report - Network TV Economics

Sunday Show Economics

When it comes to Sunday morning programs, industry insiders say that NBC's "Meet the Press" is a significant profit producer for the network. In 2001, NBC reported that the show earned an operating profit of $50 million. That was up, reportedly, from $800,000 in 1991.¹⁸ The other Sunday shows reportedly add to the bottom line but not as significantly.

Prime Time Magazines

If morning shows show a dazzling durability, the revenue figures for prime time news magazines reveal a downward trend that suggests that the golden era of the network magazine show is over.

Through most of the 1990s these shows had been a boon to the news divisions. The genre really took off in 1992 with NBC's "Dateline," which used a different organizational concept to change the game. Instead of using a small staff to produce a once-a-week show as the other magazines had done, NBC used its entire news staff to churn out stories steadily. "Dateline" did not air once a week, but instead it was on more often - at its peak five times a week - and there weren't stars. There was a rotating cast of anchors and reporters. The brand of the show was NBC news and the show name, not any specific person. The other networks began to follow suit, putting magazines on multiple nights. ABC put its "20/20" and "Primetime" together and made them into a three-night-a-week production. And CBS even took the step of expanding its news magazine franchise, "60 Minutes," into a twice-weekly show, and its "48 Hours" magazine also aired twice a week. At the peak of the prime time news magazine craze in 1997, 10 out of a possible 22 hours of prime time network programming on the big three was filled with news magazines.¹⁹

But from 1999 to 2002, revenues for these programs fell 48 percent.²⁰ And the most obvious reason is quantity. From that 1997 high of 10, the amount of time devoted to prime time magazines per network has shrunken to, in most weeks, two hours, clearly affecting these program's revenues.

News Magazine Revenue, Select Programs

1999 to 2002

Design Your Own Chart

Source: TNS Media Intelligence/CMR unpublished data, www.tnsmi-cmr.com

Perhaps the most interesting question is why the networks cut back on magazine programming. To some extent, the market for magazines had been glutted. There were too many of them. The history of television networks is filled with genres that were "hot" and later discarded, from westerns to quiz shows.

The issue is not how many people watch a magazine show. It is how many people might watch something else instead. And in 1999 networks found a new alternative with many of the same advantages as news magazines and a potential greater upside.

News magazines became popular as prime time programming because they were cheaper to produce than entertainment programming - sitcoms and dramas - roughly half the cost.²¹ Thus a network magazine could make money with a magazine show that generated lower ratings than an expensive hour-long drama or two half-hour sitcoms. In a sense, say industry insiders, networks used prime time magazines, in part, to plug holes in their entertainment schedules and tended to use more of them if they were having trouble finding successful entertainment shows.

In the last four years, the networks found even cheaper-to-produce programming - reality TV. And if one hits big, like "Survivor," the first "Bachelor," or "American Idol," the upside is far greater, if more short lived.

News magazines are being supplanted, in part, because Americans prefer shows like "Fear Factor" and "The Bachelor." As a result, NBC's "Dateline," which was on five nights a week in 1998, is now on only twice a week.

On the other hand, there are some, such as Lawrence Grossman, a former NBC News president, who argue that, aside from "60 Minutes," the term "news magazine" has become something of a misnomer for these programs. They might be better labeled "nonfiction entertainment magazines."

One question to watch is whether "60 Minutes" will continue to be the exception in 2004 and beyond with the departure, not entirely voluntary, of the founder Don Hewitt, the 81-year-old network news legend who is among the last off-air executives who was powerful enough on his own to push against the more transitory financial concerns of his business superiors.