Approximately 25 years ago, the American public was primarily dependent upon three networks as their central sources for television entertainment: ABC, CBS, and NBC. In October 1986, Fox Television launched serving as a symbol of change that has matured into an era which now includes more than 300 networks. Moreover, with the proliferation of sub-channels that have accompanied the digitalization of television, the American public is, on a daily basis, confronted with a confusing array of networks and channels - most of which are unfamiliar to the average viewer.
Given such a complex industry with its multiplicity of viewing choices, why would anyone create another viewing option that could possibly fragment the viewing audience even further? Joseph Collins, Founder and CEO of Punch TV Studios, argues that the technological change in the world of television has created an opportunity for greater responsiveness to consumer choices.
When analyzed by demographics alone, Mr. Collins argues that “the American viewing audience has splintered from a fairly homogeneous whole to one that is highly differentiated not merely by demographics and social cultural variables, but also by new sets of psychographics. The viewing preferences of a 5-year-old grandparent “flower child”, are substantially different from those of a 55-year-old retired executive who immigrated to America at the age of 13. New networks are needed to satisfy the tastes and viewing interests of these highly segmented niches of consumers.” According to Mr. Collins, Punch TV Studios was established for those consumers who are intrigued by one-of-a-kind programming.
Substantial barriers exist that dramatically restrict the number of independent movie and television projects from being distributed. Similarly, while the growth of sub-channels that accompanied the digitization of television have created explosive opportunities for new networks and studios, national access to the signal of new network is still primarily controlled by only a few large corporations. Punch TV Studios is uniquely sensitive to the market entry barriers that complicate and confound market access for producers and entrepreneurs in the independent sector of the entertainment industry.
Punch TV Studios is currently seeking partners to support the vision of its Founder and CEO Joseph Collins. Despite the various challenges that currently confront the industry, television continues to maintain its hegemony as the most powerful and profitable media available to advertisers. Moreover, despite the proliferation of platforms, approximately 97.1% of American households have televisions. Additionally, opportunities for more consumer contact exist in 84.4% of households with two or more televisions. Simultaneously, multiple opportunities exist for home access to televised programming through 87.3% of homes with cell phones, 86.7% with home internet, 80.9% with personal computers, 26.3% with satellite dishes, 35% with video game systems, and 48.3% with MP3 players.
Given the multiplicity of viewing options, it is less than surprising that the time spent by households viewing television programming increased to 8 hours and 21 minutes per day by the year 2009, from 4 hours in 1950. While females have the highest viewing time at 5 hours and 31 minutes per day, males follow closely behind with 4 hours and 54 minutes of daily viewing. Although these viewers are shared between broadcast affiliates, cable networks, and/or satellite distributors, broadcast television has continued to dominate. For example, CBS Broadcasting, Inc. (CBS), with an average weekly total non-duplicated audience (CUME) of 73.1%, maintains 107.67% higher weekly cumes than ESPN (35.2) - the highest rated cable network. In the year 2011, roughly $127 billion was spent for advertising across media. Approximately $22+ billion, or 17.5% of the total, was spent on network television, 11.8% on spot TV, 3.2% on live streaming internet, 18.1% on net cable TV, and 3.7% on syndication. Thus, 54.3% of all advertising expenditures in 2011 were used to support the television industry. This irrefutable data recommends television as an investment opportunity with the potential for a high return to exceptional stockholders.
Despite the challenges introduced by the multiplicity of platforms, the dilution of advertising by occasional ad skipping when the remote is handy, and the proliferation in networks from the original three to an estimated 500+, television continues to dominate as the most profitable media outlet. Indeed, data from Forbes reveals that in the year 2011, General Electric, the parent company to NBC (NBC/Universal), earned $19 billion in gross revenue with a price to earnings ratio of 19.8 on its common stock, which experienced a 52-week low of $14.68, and a 52-week high of $23.18. Likewise, CBS, which owns publishing and other interests, grossed $14.5 billion in sales, while its stock had a 52-week low of $22.88, and a 52-week high of $38.32. The last of the big three, ABC, owned by Disney, produced $41 billion in gross revenue, and had stock traded at $53.40 at its highest point, and $33.13 at its lowest during a 52-week cycle. Each of these networks began as smaller television networks that were purchased by bigger corporations, and in many cases became part of transmedia or multimedia corporations.
Moreover, even when ethnic-oriented networks are analyzed, a similar pattern emerges. For example, BET (Black Entertainment Television), an African American Television network, is a subsidiary of Viacom - a media giant. Additionally, Telemundo, a large Latino network created by Angel Ramos in Puerto Rico in 1954, is now a part of the NBC/Universal family. These scenarios demonstrate how the successful trajectory of a television network can include a buyout by a much larger corporation, or, conversely, the purchase of other media and non-media companies by the network itself. This information also reveals that television involves a potential for profit that extends beyond the oligopolistic components of TV’s marketplace, and into those niche markets that serve a core of loyal and consistent viewers.
However, America’s population of 311,591,917 only represents 132,312,404 households. While approximately 97% of these households have televisions, a marginal decrease is occurring in the number of households who actually view television. 114.2 million households now comprise the universe that must be shared by a rapidly proliferating number of networks. Moreover, most of these networks are competing for the same audience –the 57.6% of the country’s 311+ million persons who are 18-49 years of age. Other environmental challenges also characterize the television market.
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