Network Affiliation Is Very Profitable For Television Stations And For The Networks

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Network affiliation is very profitable for television stations and for the networks. Advertisers pay a network to air commercials according to the number of viewers. The network pays its stations a set rate per ad, regardless of the price paid by the advertisers. If a program increases in popularity, advertisers must pay more to the network, but the network has no obligation to pay more to the stations. Network compensation is negotiated, however, and more desirable affiliates are paid more.

The broadcasting schedule is divided between network time, in which network programming is aired, and affiliate time. Affiliate time is divided between locally originated programming, including news, and syndicated programming. Profits from these go directly to affiliates. The evening news Links Of London Bracelets broadcasts on all three networks are scheduled during affiliate time, which is one reason affiliates resist network efforts to extend these newscasts to forty-five minutes or one hour. One commentator explains:

When the networks scheduled their 15-minute ...
... news broadcasts and later the 30-minute broadcasts in the affiliates' time slots, each network gained 2 minutes and 30 seconds of advertising time per 15-minute block. These extra 5 minutes of commercials bring in $30 million to $40 million a year in added revenues to each network. But they [affiliates] aren't likely to give up any more time; when they do their own local news programming, they can keep 100 percent of the revenues.

Affiliates have resisted such encroachments energetically, arguing that the networks should schedule news programming in the evening hours that they already control.

The same problem occurs at other times in the day. In spring 1990, Phil Beuth, senior vice president of ABC Network Group, noted that affiliate resistance was the largest barrier to expanding the number-one-rated Good Morning America to weekends. "It's hard to get the stations to give up that time," noted Beuth, "which is profitable and also used as [community] service time. Some of our [network-] owned stations are even reluctant to give up the time."

The relationship between networks and affiliates is complex. No network can compel an affiliate to air or clear any network program, but there are strong inducements to do so. For all the networks, compensation to Links Of London Charms affiliates is relatively low for the weekly program base of twenty-one to twenty-four hours. Network program time taken by affiliates over that base brings a higher rate of compensation. The economic incentive encourages higher levels of program clearance by affiliates. Most affiliates clear 95 percent of the network programs they are offered, and this programming makes up about 65 percent of their total programming time.