From Ken Auletta's blog on The New Yorker website:
> November 20, 2009
> Why Oprah Needs Cable
> Posted by Ken Auletta
> Why is Oprah Winfrey jumping from broadcasting to cable?
> For the same reason that the largest cable company,
> Comcast, is bidding to buy NBC/Universal. Cable networks
> are one of the few traditional media enterprises that are
> growing. The audience for broadcast television is
> shrinking. Cable generates two income streams,
> advertising and subscriptions; broadcasting relies solely
> on ads. Oprah is jumping off the listing ship and onto
> the rocket.
Continued at http://tinyurl.com/yg9ga7h
Auletta misses a crucial point: broadcast stations also have two income
streams: advertising and retransmission-consent fees.
The Cable Act of 1992 allowed broadcast station licensees to demand
financial payments from cable TV and satellite TV retailers. For
several years after 1992, cable TV operators successfully refused to pay
these fees. But in recent years, broadcasters have been increasingly
successful in extracting fees, some of which now approach $1.00 per
station per subscriber per month.
That's a lot of money; so much, in fact, that the broadcast networks are
now trying to get a cut.
Maybe Auletta (along with John Mayson, Bill Horne, and John David Galt)
are right: broadcast television is dying.
But I think Auletta underestimates the power of the NAB.