How The Recession Has Changed TV Forever

tv recession (2)

2009 was a very harsh for the US economy. Record unemployement, extremely tight credit, government spending at massive levels. No doubt about it, things were dire last year. Some say that 2010 will be better but only in the sense that we are poking our head out of the water after a year of drowning.

How did that affect TV? Well, 2009 was also a difficult time for TV. As advertisers tightened their belts to weather the recession, less pilots were shot, more shows were cancelled, people were fired left and right. To top it all off, major changes happened in the TV industry landscape; the biggest being Comcast purchasing NBC.

The question then becomes: what is 2010 going to be like for the TV landscape? One might assume that things are just going to slowly come back to normal. More pilots will be shot, more shows will come back on air (Bye bye Jay Leno), more people will come back to work on TV sets. For us viewers, it would be TV as usual.

I am sorry to say that I believe that the above scenario is a fantasy and that times are changing for TV shows in a very unexpected way. This recession has created a new playing field that will change the way TV shows are made, marketed and more importantly monetized. When the recession hit, TV networks saw their revenues plummet as advertising dollars dried up. That left a bitter taste in their mouth. In order to wash down that taste, they will do anything they can to prevent that from happening again by diversifying their sources of income.

A good example of this change is the latest spat between Fox and Time Warner Cable. News Corp’s Fox was muscling TWC to start paying it every month $1 for every subscriber that received the FOX channel. Yes, you are reading this right, FOX wanted TWC to pay a buck for a channel that users can get for free over the air. TWC tried to pay hardball and low balled FOX with only $0.25-$0.3 per subscriber leading FOX to threaten to remove its channel from TWC. All of this was resolved on January 1st through a deal that remains undisclosed but the speculation was that the final amount should be around $0.5 per subscriber.

What does this example tell us? News Corp. is looking at its business and is realizing that the advertising gravy train comes at a cost and that they can’t keep hitching their wagon on this fickle mistress. So they are trying to squeeze money from where they can, which happens to be cable companies in this case. It is clear to me that this is a slippery slope. First, FOX gets its cut then ABC, CBS and the CW start lining up with their own demands. The ratings game focuses now not on impressing advertisers but on getting more leverage when negotiating with Cable companies.

So what are cable companies doing? Oh, they are not taking this lying down. They saw this coming a mile away and they are taking steps to mitigate the issues. It is no coincidence that Comcast bought NBC and I would not be surprised to see Time Warner Cable making a play for one of the other major TV networks (I doubt they can get FOX but hey you never know). In addition, if they can’t get the networks they want, they will do the next best thing which will be to stiff the consumer with the bill. So that $1 per subscriber can quickly become $5-$10 more per month added to our cable bills for TV channels that are available for free over the air.

A more long term consequence of this switch from advertising is that the hunger for ratings will grow even more exponentially than it ever has as they will probably mean higher fees from Cable companies. In addition, you will see that higher ratings will not equal higher quality shows. Since the advertising revenue will be a secondary revenue stream, there will be no need to put money into quality shows but instead, we can expect even more cheaply produced reality shows, more singing and dancing competitions that garner high ratings.

What can we do as consumers to fight this? Well not much unfortunately. As much as we can delude ourselves in thinking that TV networks care about us, the truth is and has always been that it’s all about money. If TV networks thought that they could make money making quality shows a la HBO, we would have a Soprano-Like Series on every channel, The Wire would be the rule and not the exception and Entourage would be on every Weekday. Until that day comes, we are bound to be subjected to cheaply produced junk reality shows that most of us will ingest willingly.

Yes, this recession has indeed changed TV in fundamental ways and it will take a few years to fully grasp the full impact of that change. In the meantime, let’s stay vigilant and keep a look out for quality entertainment of our own choosing like House, True Blood and Doctor Who. Worst comes to worst, I can always cancel my cable subscription and live on a steady diet of iTunes and Hulu. Yes I would pay for shows but at least I would pay for TV shows I want to watch not TV shows I have to watch.

What do you guys think? Am I blowing things out of proportions or are you also seeing the same troubling trend unfolding out there? Feel free to speak your mind in our comment section below