TV Networks Spending More Despite Down Economy

Even with minimal profits for network television and a troubled economy, the big four are spending more this year on programming, according to Associated Press.

“Each year, ABC, NBC and Fox contribute a smaller share of the profits reaped by their parent companies. Meanwhile cable channels boost viewership and get growing chunks of the advertising pie. No wonder a cable company is about to scoop up NBC -- largely because it owns cable channels, which also deliver a stream of revenue from subscription fees,” AP writes. “So why are the TV networks spending tens of millions of dollars more on prime-time dramas and comedies for next season than they did in the last season? What's in it for the companies, when even Fox, No. 1 among viewers in the key demographic of 18- to 49-year-olds, eked out just 3 percent of the total operating profit reported by Rupert Murdoch's News Corp. in the last quarter?”

The answer comes from several reasons, the story said. Among them:

* Even though the profits may be slim on the broadcast segment alone, other areas of media companies enjoy the benefits.

* The most expensive shows that generate the largest audiences are usually developed on broadcast TV before migrating to cable channels.

* The benefit of hitting a home run outweighs the cost of a few strikeouts.

* Broadcast television is developing sources of revenue that were once exclusively the domain of cable networks. That also helps justify new spending.