TV News: The Sky's the Limit

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For Dan Casey, it was the story of a lifetime. A television cameraman for WSB-TV, the Atlanta affiliate of ABC, Casey narrowly escaped death last week as a Georgia tornado flattened his mobile broadcasting van. Casey's tape of the tornado was dynamite. Alerted that evening by WSB that the story was being transmitted by satellite, ABC News decided to use the gripping footage as its lead on Nightline. By the time it did, however, thousands of viewers had already seen Casey's emotional report on Cable News Network, an ABC rival.

Much the same humiliation befell NBC's network news operation after last month's California earthquake. KRON, the NBC affiliate in San Francisco, tried to transmit its footage of the disaster to NBC via satellite. But for more than an hour after the tremor, a glitch-prone NBC network was unable to broadcast any live reports. Meanwhile, CNN, which had access to the same satellite signal, was airing KRON's vivid images of the destruction.

What's going on here? In almost any other industry, CNN's coups would be viewed as nothing short of piracy. But television is a business built on tenuous alliances. While the three major broadcast networks -- ABC, CBS and NBC -- have long been the dominant U.S. television programmers, they own only 20 stations. The other 620 that carry network programming are known as affiliates. These stations have traditionally served as supplementary news sources for the networks, but only loyalty and a common stake in competing against the other networks have prevented the affiliates from gathering and selling their stories elsewhere. Until now.

Affiliation with a network no longer offers the protection from local competition it once did. To stand out amid increasingly stiff competition, many local stations are turning to expanded news programs. Journalism is local television's biggest money spinner, typically accounting for at least a third of a station's revenues and an even higher share of profits.

At the same time, technology is breaking down the links that join networks to their affiliates, and is blurring the lines that distinguish big stations from small ones, and network affiliates from the country's 400 independent stations. The main culprit: satellites. By providing a relatively inexpensive electronic highway over which video signals can be transmitted, satellites have created a new industry of program suppliers that can offer local stations a broad variety of material once available only from the networks.

The growth of cable has also undermined network influence by dramatically expanding the number of channels available to viewers. During the past ten years, as cable has extended its reach to 56% of U.S. homes, the average network share of television audiences has plummeted, from 90% to just 61%. At the same time, the network share of television advertising revenues has diminished, from 45% in 1979 to 36% last year. Cable operators absorbed much of the ad spending that the networks lost, according to Alan Gottesman, who follows the broadcasting industry for Paine Webber.