There is a real possibility that free TV may become a relic of the past. Since the inception of television, the business model has relied on a tried-and-true formula: the networks broadcast for free and make their profits from advertising revenues. However, viewership of the major American networks is in free-fall, as audiences increasingly turn to the web and home entertainment devices to seek programming. Consequently, the four major networks - ABC, CBS, NBC and Fox- are considering revamping their business structure and turning to cable TV for revenues. Cable has maintained its profit base because it benefits not only from advertisers, but also from the subscription fees charged to customers. (Remember those quaint days when people actually thought that by
paying for TV, they would not have commercials to contend with?) Fox head honcho Rupert Murdoch has been up-front about the fact that his network is seeking to make up for lost profits by charging cable and satellite systems increased fees to carry programming. This has already resulted in a war for public opinion with Time Warner cable systems, which initially refused to pay the increased fee. (A compromise for undisclosed terms has since been reached) Ultimately, it would appear as though this will become a common issue in the near future as the four major networks, desperate to increase revenue, try to collect higher fees from cable TV companies. Another cable giant, Cablevision, has dropped the Food Network and Home and Gardens due to rate disputes with the networks. The question is: will cash-strapped consumers, who already pay hefty subscription fees, be inclined to accept increased costs to preserve networks they have already been receiving? Industry analysts say that free TV may cease entirely in the the major networks decide to operate as cable TV providers- something one network is apparently already considering. For more
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