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22. The Changing Economics of Entertainment
- University of Wisconsin Press
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Coping with Television 22DAVIDJ. WNDONER The Changing Economics of Entertainment The Universal Puppet Show One hundred years ago, the cultural contour ofAmerica was a series of islands. Constrained by inadequate means of distribution, a cultural or entertainment creation in music, comedy, or drama languished within a regional or social class milieu, incapable of reaching large audiences. The theater existed for New Yorkers and Bostonians, upper classes only, if you please. Country music was still for country people. Books were published essentially for educational or special interest purposes, rarely attaining mass readership. Perhaps the only national, wide ranging form of popular entertainment was the traveling circus. Even the puppet show, the other hardy survivor from the Middle Ages, remained essentially a local phenomenon . Things have changed radically in the past hundred years, however. Technology has produced a bewildering variety of facilities for the mass dissemination of culture: recordings, radio, movies, paperbacks, and television. A single book is published in five million copies, and read by half again that many people. During an evening half-hour, fifteen million homes will view a typical prime-time TV show, and Abridged by the editor from two Wertheim & Co. reports, "The Changing Economics of Entertainment" (April 1978) and "Like No Business We Know" (October 1979) written by David J. Londoner 603 604 Part IV / Retrenchment and Reorganization, 1948twice that many-representing perhaps fifty million people-will watch a special event or a particularly popular movie. Probably 90 percent of the adult population of this country has at one time or another heard Debby Boone sing "You Light Up My Life." We know that thirty million Americans watched Star Wars (at least once) in 1977 and, the telecast included, probably one hundred and thirty million have by now seen Gone with the Wind. For the first time in recorded history, it is possible for substantially all the people in the United States-and a vast portion ofthe world-to witness a particular cultural or entertainment creation. This multidimensional burgeoning of the means of disseminating amusement is still far from complete; we have witnessed only the early stages in this broadening process of distribution. Still more advanced technology exists for the next stage and we are already entering it. It is the objective of this paper to discuss the immediate and upcoming outlook for entertainment, America's most pervasive form of culture. We will review the changing patterns of entertainment distribution and will venture some speculation about additional changes that will evolve in the near future. As befits our metier, the focus is economic, not philosophical. We admit to taking greater delight in the commercial opportunities inherent in a changing industry than in the social and cultural effects those changes may bring about. 1. The Shifting Locus of Profits The theme of this report is that supply/demand relationships are changing within the entertainment industry, with implications for both the immediately upcoming years and the years beyond. The principal beneficiaries of the relationships which existed during the 1960s and early 1970s were the broadcasters, both networks and stations. By virtue of their control of the principal method of entertainment distribution they have been able to dam up a reservoir of profits, feeding out portions at their will to the program suppliers. This oligopsony/oligopoly control over the major method of distribution is weakening, however. At present the cause is heightened competition among the networks; in future years the cause will be alternative means of distribution. Over the next several years, we envision a deterioration of the position of the networks vis-a-vis both the stations and the program suppliers. Longer range, we see a deterioration of the position of the stations themselves against the suppliers, as innovative developments and new technology break up the stations' oligopolies of directly reaching the home. [54.144.81.21] Project MUSE (2024-03-28 13:37 GMT) 22. Londoner: The Changing Economics of Entertainment 605 Furthermore, new methods ofentertainment distribution will eventually come to the fore, such as satellite transmission, pay TV, videotape and videodisc, fragmenting the distribution process even more, to the ultimate benefit of the producers of entertainment. The technology for each ofthese developments already exists and emplacement has already begun with consumers. Metaphorically, there are only three theaters in networkland-ABC, CBS, and NBC. As such, they have exercised great power over the producers of entertainment. This oligopsony position enjoyed by the networks has permitted them to dictate prices of the series programming that they buy, and to...