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The Impact Of Internet On Economics Of Commercial Television Industry

The commercial television broadcasting industry is undergoing a period of intense change. New technologies such as Electronic Program Guide (EPG), Digital Video Recorder (DVR), Video on Demand (VOD), digital television, Podcasting, online streaming, Mobile Video, and the Internet are dramatically changing the competitive landscape and placing strains on traditional media business models. All of these unprecedented technical innovations have significant implications for broadcasting market. Perhaps what is most interesting about this period of transition is the expanding role of internet in television business.

Interactive Websites: New way to Reduce Production Risk
To begin with, networks and cables have been investing heavily in their websites to make presence felt in cyber space and to let audience participate in and contribute to the creative process. CBS, for example, is directing visitors to its blog site with insider content and exclusive, behind-the-scenes looks at some of the network's most popular programs. As Nancy Tellem, president of CBS Paramount Network Television Entertainment Group, said, ¡®Blogs are a great way to bring the millions of viewers who enjoy our programming into the creative process.¡¯ (Emma Brownell, 2005). Why network websites become a vital factor in television business? One economic reason is to reduce the risk of failure of media products. Producers usually make production decisions based on their estimates and beliefs about market demand. Anticipating changes in audience tastes and the extent to which their interest in specific genres will continue is difficult. Predicting the continuing success of currently popular performers, directors, or writers is also problematic. The result is that there are few very successful titles each year and many more unsuccessful or less profitable media products. (Robert G. Picard, 2002:10) Obviously, producing unsuccessful programmes is a waste of scarce resources and it greatly decreases...