Saturday Night's Alright For Fighting - But Not TV
Subject Comparative statics
Topic Equilibrium
Key Words Cost, revenues, advertising
News Story

Saturday night may be a fun night for many, but it does not tend to involve broadcast television. Viewers, especially young adults, are deserting television in favor of other activities such as going to dinner, to the movies, watching cable, or renting a video.

As a result, networks have essentially taken the night off. They do not offer sitcoms and dramas because they cost too much given the size and composition of the audience. Advertisers, who provide the revenues for networks, are anxious to reach 19-49 year-olds, but who tend not to watch on Saturday evenings. They would also prefer to advertise before the shopping weekend than half-way through it. Fox has therefore engaged in low-cost alternative programming involving reality-based shows such as Cops and America's Most Wanted. ABC offers one-time theatrical releases, where consistent viewing week-by-week is not needed. HBO provides original movies and events. NBC has followed with XFL football, although with disappointing audiences.

Some say that the low viewership is exacerbated by the reluctance of networks to offer high-quality programming comparable to the mid-70's CBS line-up of All In The Family, M*A*S*H, The Mary Tyler Moore Show, Bob Newhart, and The Carol Burnett Show.

(Updated June 1, 2001)


Draw a diagram of the market for quality Saturday night TV shows, where the price is the advertising revenue generated per show.
a) Explain which determinant of demand or supply is affected by, and show the effect of:
i. The increased number of restaurants
ii. The advent of VCRs iii. Original programming on cable
iv. Fewer shopping days in the immediate future
b) Explain the mechanics of how the above changes might cause networks to reduce the number of quality shows on a Saturday night.
c) How do you explain the number of reality-based shows?

2. The contrary view is that the networks have caused their own problems by not producing quality shows.
a) In a new diagram of the market for quality programming on Saturday evenings, show the effect of fewer shows being offered. What happens to advertising rates and the number of quality shows?
b) How do you square this with the actual situation of fewer quality shows and lower ad rates? Refer to the distinction between a change in supply and a change in quantity supplied.
Source Source: Bill Keveney, "What happened to Saturday night?" USA Today, March 9, 2001.

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