New TV Oligopoly

November 26, 1990

The rapid evolution of television requires alteration of federal rules governing the production and ownership of programs. Twenty years ago, the networks' domination of the national TV picture was total. The arguments of movie producers to bar the networks from owning shows and production studios made sense. No longer.

Diversity in programming has vanished as the number of production studios has diminished. In 1970, eight Hollywood studios provided 39 percent of the networks' program supply. Additionally, there were 52 independent studios. Today, there are nine.

The networks' monopoly is shrinking, too. In most communities, the average homeviewer can select from 30 television channels, all bright and clear, on cable. Videocassettes and satellite receivers have also penetrated deeply in the market. New direct-to-home satellite channels promise even wider access. The television networks, which once had a lock on the prime time audience, now scramble to reach even 65 percent of the viewers.

Two decades have shown that the "financial and syndication interest" rules, now up for review by the Federal Communications Commission, have replaced the networks' production oligopoly with another made up of a small number of production studios. Federal Trade Commission and Justice Department regulators want the rules scrapped, and they have a point.

American-made television shows are popular all over the world but the networks, whose initial fees and exposure launch them on their profitable runs, cannot join in the long-term benefits. Foreign firms can. Rupert Murdoch's Australian-based News Corp. owns Twentieth Century Fox Studios; Sony owns Columbia Pictures; Italian-owned Pathe Communications just bought MGM/United Artists and Matsushita Electric is negotiating to buy MCA for an estimated $7 billion. There is no reason U.S. broadcasters should be hobbled against foreign competitors.

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