Television Broadcasting Stations
SIC 4833
NAICS 515120
This industry includes companies that broadcast television programs to the public. Included are commercial, religious, educational, and other television stations, and organizations that primarily provide television broadcasting services and also produce programs. See also Cable and Other Pay Television Services.
In the early twenty-first century, television-broadcasting stations faced more challenges than ever as the number of options for mass communications and information technology exploded. Followed by satellite broadcasting and the Internet, cable television had grown as a threat to, and a possible partner with, traditional broadcast stations. While it was unlikely that broadcast networks, with their strong ability to provide mass audiences for advertisers, would soon be eliminated, newer medias were likely to take a growing share of listener and viewer time from broadcast stations.
The world's television market was valued at US$130.7 billion in 2003, a value predicted to increase to US$178 billion by 2008. After three years of a slowdown in growth, the television industry was showing signs of recovery in 2004, with the United States predicted to show the strongest growth at a compound annual growth rate of 7.5 percent. Canada followed, with a growth rate of 6.1 percent, Latin America with 6.1 percent, Asia with 5.5 percent, and the EMEA (Europe, the Middle East, and Africa) with 4.3 percent. As of 2004, more than three-fourths of the revenue spent on advertising was spent on television, and the numbers were still rising.
One of the unifying features of broadcasting around the world was government regulation. Television—which did not exist until the mid to late 1940s—developed during a century of growing government control over industry. Also, airwaves were seen in most countries as a scarce public resource. As such, nearly every television market in the world was tightly regulated or directly controlled by the government from its inception. With its high public profile, television broadcasting in many countries was often the focus of controversy over violence, sexual content, and cultural content. In the United States, TV programs were frequently the focus of boycotts by various groups; the U.S. Senate went so far as to pass a bill in 1995 requiring that new televisions contain "violence-blocking" circuitry.
The controversies surrounding television demonstrated that it was a major cultural force in the world economy, one that was undergoing rapid change. New technology and political changes drove major changes in the regulatory and business climate for broadcast stations and networks around the world in the mid to late 1990s. In Europe, public service broadcasting was the only game in town for many decades, as monolithic state-run institutions provided the programs they thought would educate and entertain. In communist countries the state was the network, and television existed to legitimize the government and inform people of its activities. In the United States, three huge commercial networks provided the kind of programs people would watch, based on rating systems. In all cases, viewers' choices were limited. However, by 1995 most of these broadcast monopolies or oligopolies had either disappeared or were in decline.
From the end of World War II to the 1980s, most European countries had two or three state-owned television channels paid for by taxes or license fees. However, in the 1980s and early 1990s, almost every western European country deregulated its broadcast system, adding commercial channels to the mix. Political change spurred this trend, as did the advent of new cable and satellite channels. The change was dramatic. In 1980 there were about 40 television channels in the countries that, as of 2002, made up the European Union (EU). By 1994 there were 150 European channels, with more than 50 of those channels coming by satellite. In 2001, fully 95 percent of homes in the EU had TV and spent 3.5 hours a day watching programming.
The development of digital TV for both terrestrial and satellite transmission, as opposed to traditional analog transmission, helped increase the number of channels even more. For example, Astra 1E, Europe's first dedicated digital satellite, began operating on January 1, 1995. In 1996 Italian pay TV group Telepiu launched three digital channels, and French pay TV operator Canal Plus launched a "bouquet" of 20 digital channels. In the United Kingdom, the government wanted all technical, political, and commercial criteria for digital TV to be worked out by early 1998. The United Kingdom was seen as the world leader in digital terrestrial television broadcasting.
Some industry observers predicted the ultimate merger of telephone companies, print media, broadcasters, cable stations, and computers into one giant industry. Such media convergence would dramatically change the role of television and shift the balance of power from traditional broadcast, often called "terrestrial" television, to satellite transmission.
However transmitted, television was still clearly a growing industry. From 1980 to 1994, the number of television sets in the world nearly tripled, reaching 1 billion. Ownership of TV sets rose by about 5 percent annually worldwide, 10 percent in Asia, in the early 2000s.
While viewers may have virtually unlimited options in the future, that does not mean they will spend more time viewing, or interacting with, television. According to research by NBC conducted in the early 1990s, when viewers were presented with a choice of up to 100 channels, they actually used only eight regularly.
The world's first regular television service was established in England by the British Broadcasting Corporation (BBC) in 1936. The BBC launched its second TV channel, BBC2, in 1964. Over the years, BBC programs were acclaimed for their dramatic quality. The BBC's television monopoly ended in 1954 when the British Parliament established the Independent Television Authority (ITV), which grew into a consortium of 15 regional television companies, each operating a single channel within an assigned area. The organization later became the Independent Broadcast Authority (IBA) when radio was added to its charter. IBA television companies produced many of their own programs and generated revenue through the sale of commercial airtime.
The first television networks in the United States—NBC, CBS, ABC, and DuMont—began life as divisions of major radio networks and television and radio manufacturers. While DuMont's network failed in the 1950s, the big three went on to dominate television broadcasting in the United States, a position they held almost unchallenged until the 1980s, when cable television and a new network, Fox Broadcasting, began to seriously challenge the big three for viewing time. Of programming in the 1950s, then-TV performer Ernie Kovacs used to joke that it was right to call it a medium—TV being neither rare nor well done.
In the Soviet Union, television broadcasting was exclusively a propaganda arm of the government until the late 1980s, when Communist party and state control over the media was relaxed. In July 1990 Chairman Mikhail Gorbachev ordered major changes in the state-run broadcasting monopoly that allowed television outlets to be run independently of political organizations and provide objective coverage of news events. The complete collapse of the communist government continued this trend, although restrictions on television broadcasts remained. In 2002 many journalists and private citizens in Russia were angered as TV6, the last independent television station, owned by outspoken, banished Russian media mogul Boris Berezovsky, found itself under government supervision after being highly critical of President Vladimir Putin and having its plug pulled during a broadcast. Some journalists talked of starting up the controversial station again, but plans in 2002 were vague at best, according to the Financial Times.
The financial difficulties of the three big U.S. networks in 2001-2002 reflected those across the entire television broadcasting industry. Instead of ad sales soaring as they had in times of plenty, the ad sales of the "big three" television networks—CBS, NBC, and Capital Cities/ABC Inc.—plummeted in the early 2000s. The Broadcast Cable Financial Management Association, which tracked TV revenues, said the trio combined for a 10 percent loss in revenue, the worst performance by an industry used to making money in spite of poor quality programming. Revenue for the three big networks from ad dollars shrunk from US$11.4 billion in 2000 to US$10.2 billion in 2001, according to the Broadcast Cable Financial Management Association's report. Perhaps in an even more dramatic industry change, the Federal Communications Commission (FCC) regulations that kept conglomerates from swallowing up air space were disappearing fast. In the early twenty-first century, it appeared as if TV was going to join books, periodicals...
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