Post by George WK Newman on Jun 3, 2009 13:28:21 GMT -5
Airing of programs is an option
Programs are offered to the affiliates , but if the affiliate chooses not to air it, then another station in the market may secure a clearance for that program. Networks are obligated to do business with the station requesting the program.
Market concentration
The top 5 markets (DMA), New York, LA, Chicago, Philly, and Boston represent just short of 20% of all US viewers.
Add in the next 5 biggest markets and you have 30% of all US viewers.
The top 26 markets (San Diego is #26) represent half of the US viewers, despite there being over 200 DMA's.
Compensation paid to affiliates
There are many different ways of compensating affiliates for their air time. The major networks have traditionally paid the affiliates ("netcomp") plus left them time at the top/bottom of the hour to sell their own commercials (usually around 2 minutes).
In the ten largest television markets, the total annual netcomp to each affiliate is likely to be less then $2 million. In smaller markets it will likely be several hundred thousand dollars, or even less. NBC and CBS each pay approximately $200 million in netcomp. ABC pays around $170 million.
FOX does not pay affiliates, instead affiliates pay them if ratings exceed expectiations.
WB uses a similar plan, in fact it was known as reverse comp, because the affiliates paid the network.
Besides News, most affiliates program only a limited number of hours of local shows per day. Other slots are filled with syndicated programming.
Locally produced programs, once a mainstay, are now almost non-existent on US television.
Our Network's Agreement With Affiliates;
In the spirit of a mutual interest with our affiliates we will use more of a co-operative approach. Affiliates will receive 3 minutes of commercial air-time to sell for their own ends. Generally our shows will have about 16 minutes of commericals per hour, leaving 13 for us.
One side part of this deal, is that it pushes "netcomp" from being an overhead item to now being a source of reduced revenue for each show because they have less time to sell. So it will be tougher for our shows to break even.
This is not to say that we won't have to make other "side deals" to secure desireable affiliates or a footprint in large markets.
Programs are offered to the affiliates , but if the affiliate chooses not to air it, then another station in the market may secure a clearance for that program. Networks are obligated to do business with the station requesting the program.
Market concentration
The top 5 markets (DMA), New York, LA, Chicago, Philly, and Boston represent just short of 20% of all US viewers.
Add in the next 5 biggest markets and you have 30% of all US viewers.
The top 26 markets (San Diego is #26) represent half of the US viewers, despite there being over 200 DMA's.
Compensation paid to affiliates
There are many different ways of compensating affiliates for their air time. The major networks have traditionally paid the affiliates ("netcomp") plus left them time at the top/bottom of the hour to sell their own commercials (usually around 2 minutes).
In the ten largest television markets, the total annual netcomp to each affiliate is likely to be less then $2 million. In smaller markets it will likely be several hundred thousand dollars, or even less. NBC and CBS each pay approximately $200 million in netcomp. ABC pays around $170 million.
FOX does not pay affiliates, instead affiliates pay them if ratings exceed expectiations.
WB uses a similar plan, in fact it was known as reverse comp, because the affiliates paid the network.
Besides News, most affiliates program only a limited number of hours of local shows per day. Other slots are filled with syndicated programming.
Locally produced programs, once a mainstay, are now almost non-existent on US television.
Our Network's Agreement With Affiliates;
In the spirit of a mutual interest with our affiliates we will use more of a co-operative approach. Affiliates will receive 3 minutes of commercial air-time to sell for their own ends. Generally our shows will have about 16 minutes of commericals per hour, leaving 13 for us.
One side part of this deal, is that it pushes "netcomp" from being an overhead item to now being a source of reduced revenue for each show because they have less time to sell. So it will be tougher for our shows to break even.
This is not to say that we won't have to make other "side deals" to secure desireable affiliates or a footprint in large markets.