New Television Networks

An Update

by Rolla Edward Park

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A mathematical model of television network behavior, based on the assumption that networks choose their program expenditure so as to maximize their profits, is used to explore the prospects for alternative kinds of new networks. The prospects are considerably better now than they were at the time of an earlier RAND report on the subject, mostly because of a large increase in network advertising revenue per household. A fourth network that somehow competed on an equal footing with the existing three would almost certainly be viable. More realistically, a fourth network would suffer from coverage and UHF handicaps relative to the existing networks. However, as the number of UHF stations increases, the UHF handicap falls, cable penetration increases, and advertising revenues rise, we can expect to see renewed interest in forming a fourth television network.

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