Network TV blues: Will ABC, CBS, NBC and Fox survive?

Once they were called "The Big Three" until Fox came along, then "The Big Four." They commanded hundreds of millions of viewers, shaped the culture, drove the marketplace of ideas, or at least drove the marketplace of commercials.

Household names, we knew them only by their letters, but that was enough. "Dynasty" was on ABC, "Dallas" on CBS and "Seinfeld" on NBC. They each had their "appointment shows" and "event series" and "very special episodes." Even through decades of inexorable decline brought on by cable, DVRs, and the internet, the Big Four remained. They were diminished, sure, but still formidable. 

That seemed to end overnight because it was overnight. First, there was the pandemic production shutdown (March-June, 2020). And between November 2019 (the launch of Disney+) and March 2021 (Paramount+) four major streaming services launched, joining the already established Netflix, Hulu, YouTube and Prime Video. Then, the writers and actors strike began (May and July, respectively). In aggregate, they all delivered what may well be the knockout punch. 

The Big Four have now been relegated to second-class citizenship, as "linear broadcasters" in what's called an "OTT" — "Over-the-Top" — world, where people vault over the top of broadcast TV to watch what they want when they want it. 

With the Writers Guild strike officially over, the networks have reached another one of those dreaded "inflection points" that periodically seem to crop up every 10 or 15 years, going back to at least 1985 when The Big Three got new owners who gutted news divisions and slashed payrolls. 

This particular inflection looks much worse than any that came before. The networks' owners have diverted resources to their new streaming services, while Disney may unload ABC altogether to fund its purchase of Hulu (Disney currently shares ownership with Comcast). This means that even after Hollywood production starts up again, they have a dwindling chance of doing what they once did so reliably over their entire history — create and air those big hits that got everyone watching and talking.

During a June interview with CNBC's David Faber, Disney CEO (and Oceanside native) Bob Iger said, "The [network broadcast] distribution model that has delivered great profits for us over the years is definitely broken."

The numbers alone would appear to bear him out. Millions of people are still watching, but they're much older (60 on average, for ABC, CBS and NBC) and they're vanishing. This past July, broadcast's share of what Nielsen calls "total TV usage" fell to 20% of the total, an historic low-water mark. By contrast, nearly 40% — or double — the total share of viewing went to the streamers.

Here's another problem — the writers' strike (which ended late last month) and the ongoing actors' strike came at the worst possible moment for the networks because it reinforced a growing impression among even their most devoted viewers that there's nothing much on anyway, other than repeats or game shows, both of which have filled network schedules over these past five months. 

Jeffrey Cole, director of the Center for the Digital Future at USC Annenberg — who has spent decades advising broadcasters and governments about "disruptive" technologies — told me recently that while both "strikes are almost over for all intents and purposes, has anyone under the age of 70 noticed that scripted shows on the networks are not back? The answer is largely no." 

Meanwhile, the cable industry's own mounting woes are hurting the networks, too. According to MoffettNathanson, an investor research firm, 26,000 households a day cut their cable cords during the first three months of this year. That's also a record and growing.

Fewer people watching cable means fewer people watching the networks, or as HBO chief Casey Bloys clarified during an industry conference the day the writers' strike ended, “It’s an uncertain time, it’s a scary time. There’s a lot changing so it’s not business as usual.”

After the actors' strike is settled, and when those big Dick Wolf franchise series like "FBI," "Law & Order" and "Chicago" or modest successes like CBS' "Fire Country" and ABC's "Abbott Elementary" return, their fans will start to take notice. But are The Big Four irrevocably broken? After decades of sky-is-falling proclamations by experts, analysts (and reporters, too), has that sky finally fallen?

In a word, are those once-mighty Big Four networks doomed?

I spoke with a handful of former network executives (some of whom requested anonymity) and other industry observers who offered some perspective. No one thinks the networks will simply disappear, like supernovas fading to black in the night sky. Moreover, while the challenges are profound and the future clouded, there are some silver linings. They are faint, to be sure, but they're there.

Here, then, are six major questions facing the networks, along with some of those silver linings. 

How big an impact did the strikes have on the networks? 

Check your local channel guide for clues — "Buddy Games," "The Golden Bachelor," "The Challenge: USA," "Celebrity Jeopardy!," "Celebrity Wheel of Fortune," "The $100,000 Pyramid," "Dancing with the Stars," "FBI True," "The Masked Singer," "Raid the Cage," "Kitchen Nightmares," "Snake Oil" . . . If they don't have a working actor, or Writers Guild member, the networks have thrown them on to the wall to see what sticks. (The late-night shows had all been on ice, too, but returned the week of Oct. 2.) 

Nevertheless, strike or no strike, the unscripted invasion of prime-time would have continued anyway. In fact, more than half of prime-time is now unscripted and would have been regardless — a sharp reversal from just five years ago. There won't be a single new scripted series on ABC this fall, which has never happened before. The so-called "Peak TV era," which crested last year with some 600 scripted series, essentially bypassed the four major linear networks. Cost and viewer habits are the reasons. 

And so, ironically, the strikes haven't hurt the networks in prime-time as much as they would have back when their schedules actually had lots of scripted series. Before the strikes began, NBC even managed to bank some of those — original episodes of shows like "Quantum Leap" and "Magnum P.I" (NBC also has a pair of original series — "The Irrational" and "Found.") (Fox's Sunday night animated lineup was unaffected because animators are represented by a different union.) The networks' collective cherry on top? They still have NFL football. 

Will NFL football save the networks? 

Network owners Paramount Global (CBS), Fox Corp., Comcast (NBC) and Disney (ABC) are now in the first year of a reported $110 billion NFL contract that runs through 2033. This alone would seem to ensure that their TV networks will still be around until then, too, if only because football is far and away the most important source of programming for them. Yet there are some intriguing unknowns. Amazon now has the rights to the Thursday night package. What if — hypothetically speaking — Comcast was to sell NBC? Might it seek to keep some games for its streaming service Peacock? If ABC is sold, as now seems likely, does it get to keep the Monday night games it shares with ESPN, or the two Super Bowls (2026, 2030) they both will air? Could (hypothetically) a Super Bowl someday end up on a streaming service? 

Meanwhile, here's the known known: Without the NFL, the linear networks would almost certainly not survive. Football is that important. Yes, it may be a matter of time (10 years?) before an Apple TV+ or Prime (or YouTube) ends up with a number of live telecasts. It's unlikely, I'm told, they'll end up with all of them. Assuming they're still around, the networks (and ESPN) should continue to be NFL-dominant.

Could the streaming services save the networks? 

Last year, the giant entertainment research firm, Parrot Analytics, offered the persuasively counterintuitive argument that the streaming services have actually helped the networks the past few years. "Broadcast’s supposed demise remains more of a splashy narrative than concrete law," according to a 2022 company analysis, because "15 of the 100" most popular series on the streaming services originated on network TV.

Anyone who spends time with a streamer knows he or she can (and usually will) catch up with a favorite network show a day, week or month later. Paramount Global, Comcast and Disney stream their network broadcast shows on their respective streamers all the time (Disney is majority owner of Hulu) for that reason: It helps build their own audiences while exposing expensive shows to more people who wouldn't be caught dead watching a linear network. It's a symbiotic relationship that's obviously served both well and should continue to.

Nevertheless, the big streamers are suffering growing pains of their own. A 2022 Deloitte study found that the average "churn rate" of the major streaming-video-on-demand providers (SVOD) was 37%. Subscriber growth has stalled due to what's called "streamflation" (higher costs for each and lots more commercials). Profits are elusive, and catalogs have been slashed. (Disney+, second largest after Netflix, has told investors it'll be profitable late next year, maybe.)

 A shakeout is now considered likely, which means that one of the big streamers could conceivably fold before one of The Big Four ever does. That wouldn't be good for ABC, CBS, Fox or NBC, either.

Could the networks be sold, spun off or merge?

There are three paths forward for the networks. Each could be sold to another broadcaster, like the smaller CW Network was to Nexstar last October — that also now appears to be ABC's fate. They can be spun off to fend for themselves as stand-alone services. Or, they can merge with their streaming partners. There are already real-world examples of the merger play, like "CBS on Paramount +" or "FX on Hulu."

None of the options are ideal because if ABC is sold, for example, the new owner might lop off expensive operations, like news or late night, while a similar fate might await the others. If spun off, they are left to face a cold cruel world on their own — a world, incidentally, that is no longer inclined to watch network TV. And if merged, they stand to lose the pot of money they still get from their affiliates.

Nevertheless, the networks have been sold before and survived just fine. ABC's TV assets are widely assumed to be worth anywhere from $8 to $10 million — yes, real money, while billionaire media mogul-entrepreneur Byron Allen has reportedly already offered to hand over a check to Disney for the larger amount. Could Allen know something Iger doesn't? 

 What about all those affiliates? How could they save the networks? 

 CBS, ABC, Fox and NBC have 904 TV stations that air their shows. Most of these so-called affiliates (some are also owned by their corporate parents) pay them two fees for the privilege — compensation and a share of the money they get from cable operators who pay to carry them. This is a huge multibillion dollar business that funded the networks' recent NFL splurge. It's also not going away, at least any time soon. The stations pay all this money because they need the networks — yes, even with some of their lousy reality shows. Besides, it's still cheaper than buying stuff to fill their own schedules. This alone may ensure the networks' survival for the time being, or even over the long term.

Will the networks ever create hits again?

The networks' corporate parents have now placed all their bets along with expensive new shows, like Paramount +'s "Frasier" spinoff, on their streamers. With fewer resources, fewer viewers and fewer scripted shows, how can they get those epic hits that once defined their whole reason for being? The answer is that they probably can't. There could always be surprises, and on the networks, there once reliably were. For example, did anyone really expect "This Is Us" to turn into a monster hit (the Feb. 4, 2018, episode was seen by 27 million viewers)? But that show launched back in the last decade (2016) and there hasn't been anything close ever since. By contrast, the ABC hit "Abbott Elementary" averaged just under 2.8 million "same day" viewers last season, then added another 6.5 million via streaming on average after a month. 

But here might be what may be one of the most intriguing silver linings, or what former NBC and Fox scheduling executive Preston Beckman calls a "long tail." As is well-established, there are lots of network and cable series that get a second wind, or second life, on a streaming network — a reverb effect that catapults a show into the stratosphere with billions of "viewed minutes." The best-known current example is USA's "Suits" (2011-2019), which collected over 20 billion over the summer on Netflix. Beckman says such shows have potentially "long tails" and there may be dozens of them — "Shows like 'Yellowstone' [which] was on the [cable] Paramount Network but it did pretty damn well on CBS," when repeats started airing last month. Who knows? Might ABC's recent under-the-radar "The Company You Keep" be a potential long-tailer? Or NBC's less-under-the-radar "Superstore"? 

 In the future, Beckman says, lots of series might perform modestly during their "first run" on the networks, then explode in popularity when they start streaming. The networks, in other words, won't necessarily know if they have one of those massive, culture-defining hits until months, or even years, later. Could they one day even save the networks? Probably not on their own (only football will do that) but in a crisis of this magnitude, every little bit helps.