How Network TV Will Reinvent Itself

Because of growing competition and dwindling TV ad dollars, the big networks will be forced to make major changes, and fast

By Ronald Grover and Tom Lowry

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It's not easy being a network executive these days. Consider the challenges: While NBC (GE), ABC (DIS), CBS (CBS), and Fox (NWS) continue to siphon upwards of 60% of the television advertising dollars and to attract the biggest audiences, broadcast revenues are down an estimated 9% this year and may never be what they once were. Competition, meanwhile, is everywhere. The cable guys are making some of the most popular shows on TV and are pressing for an increasing share of advertising dollars as companies target the kind of audience niches in which the likes of AMC, TNT, and Bravo specialize. And it goes without saying that the array of entertainment options—YouTube clips of improbable Scottish singers, online games, pirated movies and TV shows—is luring eyeballs away from destination television.

These forces have been gathering momentum for some time, of course. But some network bosses seem to understand they have reached an inflection point. "The business model has to change, and I think every network executive knows that," says BBC Worldwide Americas President Garth Ancier, a onetime top programming executive at Fox, NBC, and the WB. "I'm just glad I don't have to be the one to do it."

For decades network TV has been about reach. Programmers traditionally chose shows with broad appeal, the better to get millions of viewers and, in turn, persuade national advertisers to buy those eyeballs. That era is essentially over and the networks are scrambling to adapt to a fragmented landscape where even popular shows are lucky to pull in 10 million viewers. "They have to rethink what they put on the air, how many hours they'll do it, everything in their playbook," says a former top executive who now produces TV shows.

A Shorter Prime Time

Network executives are loath to reveal much about their plans. But it's fair to say that five years from now network television will look very different. The 8 p.m. to 11 p.m. prime-time period likely will be shorter, programs will be tailored to audiences, and increasingly advertisers will show up in the programs instead of just the commercials. Even more radical, say industry insiders: Networks may turn over programming to outsiders some nights or let local stations provide their own shows on, say, Saturday evenings.

NBC, currently the most challenged of the Big Four networks, has been the first to rethink its strategy. To save money, the Peacock network already shares its Friday Night Lights programming with satellite operator DirecTV (DTV), which jointly finances production of the football programming but airs it on DirecTV's own Channel 101 before it airs on NBC. And this fall, the General Electric-owned network will air late-night talk show host Jay Leno on prime time five nights a week, giving it a lower programming cost than its current fare of cop dramas like the Law and Order franchise.

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