In 1930 when commercial television first became commercially available in the United States, the primary medium to transmit media to a television box set was the VHF & UHF electromagnetic spectrum. People enjoyed the freedom and simplicity of this broadcast method: purchase a TV set, plug it in, tune in to your favorite local station for news or entertainment. Soon after, around 1940, commercials were introduced into television as a means to generate revenue for further broadcast television development. However, there was one problem that plagued the electromagnetic broadcast especially in rural or mountainous areas, dead zones. Areas that could not receive strong broadcast signals due to environmental effects needed an “end of the road” solution: Cable (CATV). Cable TV was initially a last leg connection, meaning a tower would capture the electromagnetic waves, translate them and then deliver them to distant locations via copper cable. Cable got its big boost in the United States between 1948 and 1952 when the FCC stopped licensing electromagnetic spectrum due to interference issues. Demand for new stations led to cable being used in a new way, a primary means of broadcasting media.
Fast forwarding 60 years we have seen cable become by far the most popular medium for television. Another competing technology is satellite based television which distributes media via microwaves using satellites. As of 2005, “27 percent of U.S. households subscribe only to satellite service -- up from 19 percent in 2004 and 12 percent in 2000. 60 percent of households subscribe only to cable service -- down from 62 percent in 2004 and 66 percent in 2000.” (Satellite TV, 2005) Combining these rates, roughly 87 percent of U.S. households get their television from either cable or satellite services. With only 13% of the households left, broadcast television is slowly being squeezed out. Most people are choosing to pay the extra $50 a month for cable or satellite to receive better HD (High Def) pictures, interactive programming menus, and even DVRs (Digital Video Recorders) which allow content to be recorded and played back. “Only 12 percent of customers currently own a DVR system. However, despite low current usage rates of DVRs, 41 percent of consumers indicate that they are likely to use a DVR system in the future.” (Satellite TV, 2005) Others are choosing to watch their television an entirely new way, via the internet on a webpage. More and more users are choosing to watch content not accessible or not affordable on regular TV systems via the internet. (Hansell, 2006) With the popularity increase in these less restrictive competitor markets, it’s safe to say that broadcast television popularity will continue to decline in the future.
But why do competing technologies have to mean the end of broadcast television? It all comes down to revenue. Advertising companies are looking into investing their money in the technologies that are most popular, to reach the greatest number of people. As people move away from broadcast television, so does the money, and over time it becomes more expensive to support. Technologies such as DVR are giving consumers more control, allowing them to skip commercials if desired, further decreasing advertising revenue. As a response, advertising is continuing to move into new markets that people are moving to. (Semida, 2008) Audience fragmentation has also become an advertising dilemma. The significant increase in the number of media outlets means it is harder for marketers to reach as many people in one outlet. For instance, a broadcast television commercial that may have once reached half of television viewers may now only reach a tenth. The advertisers must respond to the market and spend less on each individual outlet. For these reasons, broadcast television is continuing to be more of a money sink then revenue generator.
Due to the financial downsizing of the broadcasting industry, its’ portion of the electromagnetic spectrum is already being decreased. When broadcast television makes the switch to digital in 2009, it will also be giving up a good portion of UHF spectrum. The U.S. recently auctioned off the portion to multiple private companies for a sum of 19.59 billion dollars, a testament to the spectrum's value. (Disappearing TV Spectrum, 2008) The spectrum has also come under fire recently under the term ‘white spaces’, the frequency gaps between channels to prevent interference. A recent FCC ruling has opened the white spaces for unlicensed communications via portable devices. (Greenemeier, 2008) As time continues it is likely that broadcast television will face more spectrum cut backs to make way for new technologies.
While the Big Three (ABC, NBC, CBS) are facing serious decline in broadcasting market, their survival will become dependent on migrating to newer media outlets. Broadcast television has already begun to throw in the towel, but it will be a process that happens gradually as more competition arises. Eventually the value of the spectrum will be greater than its use and broadcasts will be limited further or become non-existent. If this is the case, it is necessary to ensure affordable access to cable or satellite for consumers. People who cannot afford these services at their current rates must also be protected with a government program for reduced rates. As long as media is available to all via other affordable outlets, there is no reason to continue to support a costly electromagnetic spectrum broadcast.
(2008, March 19). Disappearing TV spectrum fetches $20 billion. Retrieved February 15, 2009, from New Scientist Web site: http://www.newscientist.com/article/dn13499-disappearing-tv-spectrum- fetches-20-billion.html?feedId=online-news_rss20
(2005, August 18). Satellite TV penetration up significantly. Retrieved February 15, 2009, from Consumer Affairs Web site: http://www.consumeraffairs.com/news04/2005/jdpower_satellite.html
Greenemeier, L. (2008, November 5). FCC opens up "white spaces" to tech companies. Retrieved February 15, 2009, from Scientific American Web site: http://www.sciam.com/blog/60-second- science/post.cfm?id=fcc-opens-up-white-spaces-to-tech-c-2008-11-05
Hansell, S. (2006, March 12). As Internet TV aims at niche audiences, the slivercast is born. Retrieved February 15, 2009, from New York Times Web site: http://www.nytimes.com/2006/03/12/business/yourmoney/12sliver.html?ex=1299819600en=b 93a73a9426aeb16ei=5088partner=rssnytemc=rss&pagewanted=all
Semida, K. (2008). Decline in television advertising. Retrieved February 15, 2009, from Decline in Television Advertising Web site: http://www.wikinvest.com/concept/Decline_in_Television_Advertising