This research examines NBC and its operations in this highly competitive market, and considers its future in a rapidly changing media environment.
During the 1980s, NBC was a leader in the ratings, buoyed by dramatic shows such as St. Elsewhere and Hill Street Blues, and by comedies such as The Cosby Show and Family Ties. It was at this time (1986) that General Electric (GE) purchased NBC. However, the success that NBC had in the 1980s dwindled in the early 1990s when the above shows went off the air and when the company suffered the loss of Johnny Carson and David Letterman in the late-night area. The network posted its first loss in 1991, and GE nearly sold a controlling interest in the company in 1992 to Paramount. In addition to financial loss, the network also suffered a loss of reputation when its Dateline show was revealed to have staged a highly dramatic crash involving a General Motors pickup truck.
Rumors also circulated during this time that the chief executive officer of GE, Jack Welch, was trying to sell the beleaguered network, which caused additional stress among the staff. The news and sports divisions were two areas that were consistently singled out for criticism in the press and among industry analysts, and potentially strong revenue was lost when the National Football League opted to sign with the rival Fox network for broadcasting rights.
Television broadcasting is a highly competitive market that caters to a highly fickle public. The typical retailer purchases an item from a wholesaler or manufacturer and markets it to an end user. Television operates in a wholly different type of environment. Networks broadcast shows to end users, but the revenue comes not from the viewer, but from advertisers. The more viewers who watch a show, the higher the advertising revenue. Viewers have little brand loyalty in regard to networks, but they can be very loyal to their favorite shows. Advertisers similar...