The Television Business: Mere Assertions

In a 2001 PBS interview Bill Mechanic, former CEO of FOX, said the following:

“If it wasn’t for television, I’m sure that the conglomerates would shut down the movie business completely. … If you’re being honest about it, you’d say, I’m in a lousy business. I’m making no money. I don’t know why I’m doing what I’m doing. I have to change it. I have to fundamentally start to say one word, “No.” And nobody will do that. So, you know, I sit there with people, I used to pull out statements, show them, you know. It’s not hidden stuff. Here it is. I got the most profitable studio in the business and, you know, I could be in the grocery business, making more money.”

Since 2001, things have changed, and Mr. Mechanic’s statement becomes very relevant.  It looks like the business of television distribution is going to run aground: DVR is killing the traditional ad revenue model of broadcast TV, and internet distribution gaining traction constantly in two formats (subscription-based sites like Netflix, and ad-based sites like Hulu) but neither fully pays for quality programming.  Networks still count on traditional revenue….  Here is the question of the next five years: will corporations kill (sell off) their entertainment arms?  It’s only 5% of revenue after all, and if that’s slipping, why risk it?

Thanks for choosing Universal Grocery!  Paper or plastic?