The TV Broadcasters and Cable companies form the most essential part of Television Industry. Both organizations have their own importance. Power is basically defined as the capacity to influence others who are in a state of dependence. In the case at hand, TV Networks are the obvious and more powerful coalition as compared to the cable companies. The amount and content of resources held by TV Networks make their position stronger in controlling the distribution of digital content. The dispute between CBS and Time-Warner Cable clearly indicates that CBS is a powerful coalition as Time-Warner Cable was forced to agree to CBS terms of digital rights and hike in retransmission fees. The Time Warner Cable tried to put up a fight by blackout of CBS networks in TW Cable homes but unfortunately lost to CBS network. The TV networks or Broadcaster has access to essential resources, in this case the digital content namely TV shows, movies, sports, news, cartoons etc. needed by the cable companies for their survival. Hence the cable companies are dependent on TV Broadcasters for their business and can be dictated by TV Networks.
Source & Basis of Greater Level of Power:
Following are the sources & basis of greater level of power for TV Networks:
Control of Important Resources
The five major broadcast network in US are ABC, NBC, CBS, FOX, and The CW. The TV Network or Broadcasters have greater level of power as they are in command of the digital content that needs to be transmitted to viewers through cable companies. The digital content comprises of TV shows, movies, sports, news, etc.
The number of people watching the content or program can be directly correlated to the popularity of the content. The content broadcasted by the TV networks like CBS has a huge viewership and very high rating, thus highly popular among the audience. The TV shows of CBS such as The Big Bang Theory, CSI, How I Met Your Mother and others have very high demand in the market. Hence TV broadcasters have a huge support in terms of viewers, adding to their power.
Diversity of Content
This plays a crucial role in success of any Broadcaster. The TV Networks like CBS has been able to distinguish itself from other Broadcaster based on the wide diversity of content including TV shows, movies, sports, news, and talk shows etc. Thus making CBS a powerful TV Broadcaster.
High Profit Margin
The profit earned by the TV networks in broadcasting the digital content is huge as it showcases the content that is hugely popular among viewers and has very high rating. Money is an important resource that makes an organization powerful. Thus more the money TV Networks make, more powerful they become.
Freedom to negotiate retransmission Fees
The Cable Reform Act of 1992 provides freedom to the TV network like CBS and others to negotiate the retransmission fees with the cable companies. The contract is valid for 3 years. The hike is decided at will by the TV Networks based on the popularity of content offered.
Availability of Alternatives
The TV Networks aren’t dependent on cable companies nowadays as they have alternative mode of transmission, thanks to the latest technologies available. CBS and all the other major TV networks offer the content to be watched online for free. They have commercials included in the content, helping them to make money and increasing the viewership.
Freedom to choose
The TV Networks like CBS have right to choose the cable companies to whom they are willing to transmit their digital content. Thus making them powerful as their decision decides the fate of cable companies in getting the digital content.
Ways to increase the power by Lesser Power Party:
The cable companies like Comcast, Time Warner Cable, Cox Communications, and many more are lesser power party. They can increase their power by: