2004 Annual Report - Network TV Economics

This raises the question that ultimately will face all network news programming. To what extent are the news divisions important to the viability of television networks and their conglomerate parents as a whole, even if they do not happen to be significant profit centers? To what degree are the lead anchors, for instance, major faces for the brand? How much does a strong news presence makes the network more attractive to affiliates? To what degree is news less vulnerable than entertainment programming to fads and strong-arm negotiations from Hollywood stars? How important is it that, because news is a capital-intensive form of programming, once the investment has been made, the incremental cost of producing more news - be it a special report or an added night of prime time magazine programming - is relatively low while the cost of entry for competitors is high or a new entertainment program is high?

These are more subtle issues than how much a nightly news program or a morning show adds to the bottom line. These are intangible matters of judgment, even intuition. They come down, to a greater degree than some other choices, to the values of the people who run the company. Yet they play a role in the strategic planning of a network, in the willingness to invest in news content, in budgeting and in what new business models a media conglomerate might want to invent.