WEBVTT - This is CBS! (On The Brink) 0:00:04.160 --> 0:00:07.480 For more than ninety years, CBS, a front runner in 0:00:07.520 --> 0:00:10.800 the broadcast arena, has been keeping its eye on the 0:00:10.840 --> 0:00:14.040 world of changing media. But somewhere along the line, they 0:00:14.080 --> 0:00:17.040 lost sight of what emerging markets wanted to watch, missing 0:00:17.079 --> 0:00:19.560 the news that they needed to appeal to younger viewers. 0:00:19.720 --> 0:00:22.680 So in the mid ninety nineties, they hired someone who 0:00:22.760 --> 0:00:26.680 seemingly could guess programming trends before they even happened, to 0:00:26.800 --> 0:00:30.840 revitalize the station, and that someone would send CBS, at 0:00:30.920 --> 0:00:33.560 least for a good while, over the brink and bang 0:00:33.680 --> 0:00:37.880 zoom to the moon. This is CBS on the brink. 0:00:47.680 --> 0:00:51.239 I always wanted to say that, Ariel, that's nice. Yeah, Hi, 0:00:51.320 --> 0:00:53.560 I'm Jonathan and I'm Ariel. And in case you didn't 0:00:53.600 --> 0:00:57.240 get the bank Zoom, that's from the Honeymooners, which premiered 0:00:57.240 --> 0:01:02.640 on CBS and along with their prestigious television shows like 0:01:02.920 --> 0:01:06.520 Big Bang Theory and Murphy Brown and Murphy Brown. And 0:01:06.640 --> 0:01:10.039 we're going to talk about TVs and stuff. But before 0:01:10.080 --> 0:01:13.640 we jump into that, we're in a different age than 0:01:13.680 --> 0:01:16.280 we were. When I was growing up, there were only 0:01:16.319 --> 0:01:19.320 the three broadcast stations, and then there were some local channels. 0:01:19.680 --> 0:01:23.120 You used your little Bunny Ears to watch them. Yeah, 0:01:23.160 --> 0:01:26.840 and also my antenna sometimes, but I would try and 0:01:27.360 --> 0:01:30.160 tune into that kind of stuff. I did get cable, 0:01:30.240 --> 0:01:32.440 Like cable existed when I was a little kid, It's 0:01:32.480 --> 0:01:34.600 just my family didn't have it. Until maybe I was 0:01:34.880 --> 0:01:37.720 seven or eight. We got cable that opened up a 0:01:37.760 --> 0:01:40.000 bunch of more channels, but you still had the three 0:01:40.000 --> 0:01:43.440 big broadcast stations. It wouldn't be for many years after 0:01:43.840 --> 0:01:48.320 word that we would say that there are four broadcast stations. Right. 0:01:49.400 --> 0:01:53.520 But today is very different than when I was growing up, 0:01:53.600 --> 0:01:57.040 So keeping in mind that today is a very different landscape, 0:01:57.040 --> 0:02:00.640 I'm curious, how do you watch television or do you 0:02:00.640 --> 0:02:04.840 watch TV? Well? I do enjoy television. I am a 0:02:04.880 --> 0:02:10.160 self proclaimed giant geek, and so I like watching all 0:02:10.200 --> 0:02:12.239 of the geeky things that come out and then not 0:02:12.360 --> 0:02:18.000 geeky things. I watched antenna type television growing up and 0:02:18.280 --> 0:02:22.520 occasionally cable. I have cable now actually because I like 0:02:23.160 --> 0:02:27.560 watching the shows when they come out without spoilers. And 0:02:27.840 --> 0:02:29.800 sometimes there are channels that I just can't get on 0:02:29.880 --> 0:02:33.359 Hulu or Netflix, or shows that I can't watch in arrears, 0:02:33.919 --> 0:02:35.760 so I do have cable. I also like watching the 0:02:35.800 --> 0:02:38.239 occasional football or hockey game, and that's easier on cable. 0:02:39.240 --> 0:02:42.839 But I also have Netflix and Amazon and probably the 0:02:43.000 --> 0:02:48.040 Disney Service, and I have Cable. I can't tell you 0:02:48.080 --> 0:02:52.200 the last time I watched it. I honestly don't remember 0:02:52.240 --> 0:02:55.520 the last time I turned on cable TV. I have 0:02:55.560 --> 0:02:59.560 it because it's bundled, and so I tend to watch 0:02:59.720 --> 0:03:02.760 things online. And honestly, these days, I don't watch that 0:03:02.880 --> 0:03:06.000 much television programming at all. I'm watching a lot of 0:03:06.040 --> 0:03:11.440 like independent YouTube type video stuff, um, like highly produced 0:03:11.600 --> 0:03:15.000 YouTube stuff. It's not like I'm watching some guy throw 0:03:15.080 --> 0:03:18.360 darts at balloons for minutes. But I'll watch Twitch for 0:03:18.400 --> 0:03:21.639 a while. Yeah, I do watch some Twitch programming as well. 0:03:21.720 --> 0:03:25.720 So it's a very different world. But CBS obviously is 0:03:25.760 --> 0:03:31.200 steeped in the traditional forms of media, although they've obviously 0:03:31.240 --> 0:03:34.280 also expanded beyond that. So we're gonna give a quick 0:03:34.320 --> 0:03:39.640 overview of CBS origins because I find them fascinating to 0:03:40.080 --> 0:03:42.680 do too. Let's let's set our minds back, all right, 0:03:43.480 --> 0:03:45.920 just before I'm going to go through this as fast 0:03:45.960 --> 0:03:48.680 as I can. But I'm also really a geek out 0:03:48.720 --> 0:03:53.480 about this. Before World War One, you had radio, just 0:03:53.720 --> 0:03:57.760 starting to get started in the United States, like you 0:03:57.800 --> 0:04:02.600 started to have radio broadcast stations just barely begin just 0:04:02.640 --> 0:04:05.839 before World War One. World War one starts to break out, 0:04:06.120 --> 0:04:08.320 and the United States government kind of flips its lid 0:04:08.400 --> 0:04:11.760 because a lot of the companies that we're running those 0:04:11.840 --> 0:04:15.280 radio broadcast stations, which were mostly for the use of 0:04:15.320 --> 0:04:19.400 sending telegrams wirelessly, a lot of them were owned by 0:04:19.400 --> 0:04:24.640 overseas companies, companies in Europe. Interesting, and the government is saying, huh, 0:04:25.240 --> 0:04:29.880 don't really want this foreign owned company to have such 0:04:29.920 --> 0:04:33.240 an important role in our communications infrastructures. So what we're 0:04:33.240 --> 0:04:36.520 gonna do is sees all the companies, and they did. 0:04:37.240 --> 0:04:39.600 World War One ends and they said, well, now we've 0:04:39.600 --> 0:04:42.560 got all these radio broadcast towers that we can't use anymore. 0:04:42.640 --> 0:04:45.359 We need to get rid of them. So the government 0:04:45.400 --> 0:04:49.240 turns to a group of companies, including General Electric being 0:04:49.520 --> 0:04:53.440 the largest of them, to create a new corporation, the 0:04:53.520 --> 0:04:56.800 Radio Corporation of America, better known as r c A. 0:04:57.520 --> 0:05:00.400 R c a's job is to oversee all these radio stations, 0:05:00.400 --> 0:05:04.680 which gradually evolve into broadcast radio as we would think 0:05:04.680 --> 0:05:07.920 of it today. All right, So it becomes broadcast radio 0:05:08.400 --> 0:05:10.760 and our c A as part of this, decides to 0:05:10.800 --> 0:05:14.839 create its own subsidiary to oversee this, the National Broadcast 0:05:14.839 --> 0:05:19.960 Company or in BC. It's important to remember the NBC 0:05:20.120 --> 0:05:23.039 plays an integral role in the formation of CBS because 0:05:23.400 --> 0:05:26.520 along comes a talent agent. He's got a heck of 0:05:26.520 --> 0:05:30.640 an act to show you, I can't this podcast. So 0:05:31.080 --> 0:05:35.440 this guy named Arthur Judson is pitching his clients to 0:05:35.720 --> 0:05:39.200 NBC and he's getting nowhere. So what do you do 0:05:39.400 --> 0:05:43.520 when you can't get your clients booked on the radio station? 0:05:43.680 --> 0:05:45.880 You cry in a corner. No, you make a new 0:05:46.000 --> 0:05:47.839 radio station. In fact, you make a new chain of 0:05:47.920 --> 0:05:51.160 radio stations. In fact, you get your own radio network. 0:05:51.200 --> 0:05:53.320 And that's what he did. He started to go out 0:05:53.360 --> 0:05:55.960 and try and form his own radio network. Uh. It 0:05:56.040 --> 0:06:00.440 started off as the United Independent Broadcasters, but not too 0:06:00.480 --> 0:06:03.600 long after he founded that. In ninety seven, he agreed 0:06:03.640 --> 0:06:07.520 to a merger with Columbia Phonograph and Records Company and 0:06:07.600 --> 0:06:11.039 this would become CBS. This happened in nineteen It became 0:06:11.080 --> 0:06:16.280 known as the Columbia Phonograph Broadcasting Company and the company struggled. 0:06:17.200 --> 0:06:21.240 It was it was up against a behemoth because NBC 0:06:21.360 --> 0:06:24.480 had this bigger company, our c A and behind that 0:06:24.760 --> 0:06:29.279 General Electric. Right, so NBC has this huge safety net 0:06:29.320 --> 0:06:33.719 behind it. CBS doesn't. It's independent, it's struggling. So then 0:06:33.800 --> 0:06:39.039 this wealthy guy named william S. Paley comes in, um 0:06:40.000 --> 0:06:42.960 and he says, you know what, I think I can 0:06:42.960 --> 0:06:47.640 do something with this this broadcast company. And his father 0:06:47.720 --> 0:06:50.760 had been a very successful businessman, you could say it 0:06:50.800 --> 0:06:53.240 was something of a lifesaver. And he comes in and 0:06:53.320 --> 0:06:56.640 he buys this struggling company, calls it the Columbia Broadcasting 0:06:56.680 --> 0:07:02.240 System or CBS proper so much better than CPBC. Yeah, 0:07:02.320 --> 0:07:05.440 and this was the formation of CBS. But at the 0:07:05.440 --> 0:07:09.240 time we have to remember CBS was a radio network. 0:07:09.320 --> 0:07:13.160 Television comes later, and NBC was too, exactly, and so 0:07:13.480 --> 0:07:16.840 then we get into another big change, a big difference 0:07:16.840 --> 0:07:22.000 between CBS and NBC. The guy who was overseeing NBC 0:07:22.400 --> 0:07:25.760 thought that advertising was gosh. He didn't like it. That 0:07:25.840 --> 0:07:28.640 was foolish of him. Yeah, he actually there were famous 0:07:28.680 --> 0:07:32.320 stories that he would refuse to meet with advertising executives. 0:07:32.320 --> 0:07:35.960 He would let his his direct reports handle that for 0:07:36.000 --> 0:07:39.600 him because he hated it. Hailey was the opposite, and 0:07:39.640 --> 0:07:41.640 he was like, I'm gonna wine and dine these guys 0:07:41.640 --> 0:07:43.920 so that they advertise on my shows. In fact, I'm 0:07:43.960 --> 0:07:47.240 going to convince them to sponsor entire shows and we 0:07:47.320 --> 0:07:53.000 will feature their products either in every advertising break or 0:07:53.040 --> 0:07:57.320 we'll incorporate them directly into the scripts. You know, Wow, 0:07:57.400 --> 0:08:00.600 you sure do look nice wearing that dapper dan hair 0:08:00.920 --> 0:08:06.600 hair wellmade? Yeah, which is that you should write commercials? John? Yeah, 0:08:06.720 --> 0:08:09.200 not not my strong suit, I admit it. I bet 0:08:09.200 --> 0:08:12.600 that made NBC pretty mad though. Yeah, they got into 0:08:12.800 --> 0:08:15.360 a fierce rivalry, and that wouldn't be the only thing 0:08:15.400 --> 0:08:18.320 that CBS would do that would make NBC mad. But 0:08:18.680 --> 0:08:21.840 there also was an interesting side note to this, which 0:08:22.160 --> 0:08:24.960 just very quickly, is that CBS and NBC were the 0:08:25.040 --> 0:08:29.080 dominant players in radio. There was no one else, to 0:08:29.120 --> 0:08:32.880 the point where another organization called the Mutual Broadcasting System 0:08:32.920 --> 0:08:35.640 filed a complaint with the f c C, the Federal 0:08:35.679 --> 0:08:38.800 Communications Commission in the United States, and said, this is 0:08:38.800 --> 0:08:43.199 a do woppoli. These two companies control everything. That's not acceptable. 0:08:43.640 --> 0:08:46.200 So FCC says, you know what, you're right, NBC, you 0:08:46.200 --> 0:08:50.520 guys split into two. Now, NBC already had two networks, 0:08:50.559 --> 0:08:53.600 both called NBC. So they said, well, all right, we'll 0:08:53.640 --> 0:08:56.240 sell off one of these and we'll keep the other one, 0:08:56.559 --> 0:08:59.040 and the one they sold off would eventually become the 0:08:59.080 --> 0:09:02.200 American Broadcast Company or ABC. So now you get all 0:09:02.280 --> 0:09:05.680 three of the big broadcast companies, and you could argue 0:09:05.720 --> 0:09:09.480 that all three, either directly or indirectly came out of 0:09:09.520 --> 0:09:13.040 our c A and just get excited about No, that's 0:09:13.120 --> 0:09:16.800 very exciting, it's very very interesting. As you said, advertising 0:09:16.880 --> 0:09:18.720 isn't the only thing that caused a sore spot between 0:09:18.800 --> 0:09:23.400 NBC and CBS because CBS stole a bunch of talent 0:09:23.440 --> 0:09:27.719 away from NBC. Yeah, they did a whole head hunting thing. 0:09:27.800 --> 0:09:32.520 Paley led the charge, and they offered NBC stars deal 0:09:32.559 --> 0:09:35.600 they couldn't refuse. They gave them such lucrative contracts that 0:09:35.880 --> 0:09:40.199 multiple NBC stars jumped ship. And this was right around 0:09:40.200 --> 0:09:44.400 the same time that the industry was starting to embrace television. 0:09:44.679 --> 0:09:47.080 So they got icons like Jack Benny and George Burns 0:09:47.080 --> 0:09:50.800 to come over to CBS. Really good timing on their part, yep, 0:09:51.080 --> 0:09:55.319 and uh, the rivalry between the two companies went beyond that. Again, 0:09:55.360 --> 0:09:57.160 I'm not going to dwell too much on there, but 0:09:58.040 --> 0:10:01.439 you had our c A and in BC backing certain 0:10:01.480 --> 0:10:04.920 types of media, whereas CBS and Columbia Records were backing 0:10:04.920 --> 0:10:08.520 other types of media. You had CBS put forward it's 0:10:08.720 --> 0:10:11.720 standard for color television and it got accepted as the 0:10:11.880 --> 0:10:16.040 FCC standard, while our c A was saying, not so fast, 0:10:16.160 --> 0:10:18.840 our versions better, and the FCC said, you know what, 0:10:18.880 --> 0:10:22.000 you're right, We're gonna reverse our decision. So this was 0:10:22.040 --> 0:10:24.800 a battle going back and forth in those early days, 0:10:25.160 --> 0:10:30.319 but both companies were largely thriving off that competition. The Again, 0:10:30.360 --> 0:10:33.160 the interesting part being that CBS was doing this as 0:10:33.200 --> 0:10:37.000 an independent company. It wasn't, it wasn't under the umbrella 0:10:37.080 --> 0:10:40.559 of a larger corporation. But you know, they had trouble 0:10:40.679 --> 0:10:43.240 making their TVs around the time of the Korean War 0:10:43.280 --> 0:10:45.480 and just gave up on it and focused on television. Yeah, 0:10:45.480 --> 0:10:48.280 because their television. And I won't go into the details 0:10:48.320 --> 0:10:51.280 of this either, but it was a electro mechanical color TV, 0:10:51.440 --> 0:10:54.439 meaning that there were actually moving parts inside your television 0:10:54.440 --> 0:10:57.360 to make the color work, like little elves On treadmill, well, 0:10:57.440 --> 0:10:59.480 like a color wheel. But yes, it was powered by 0:10:59.480 --> 0:11:02.080 el Son tre and mills. Same thing. Well. In nineteen 0:11:02.120 --> 0:11:05.040 fifty one, as a part of focusing more on television. 0:11:05.040 --> 0:11:07.240 They come up with their CBS I logo. I like 0:11:07.320 --> 0:11:10.480 that you said, by focusing more on television, I meant 0:11:10.520 --> 0:11:13.640 to do that. Yes, I did. And then we're not 0:11:13.640 --> 0:11:16.280 going to focus on the year by year because things 0:11:16.520 --> 0:11:18.480 go pretty well for television. We're just gonna hit a 0:11:18.520 --> 0:11:21.040 few key points. Yeah, and and kind of highlight how 0:11:21.080 --> 0:11:24.240 the transition was happening. Yeah, between the years of nineteen 0:11:24.280 --> 0:11:28.160 sixty and nineteen sixty two, CBS stopped offering radio serials 0:11:28.160 --> 0:11:31.040 and dramas. Yeah, they were. They were just moving away 0:11:31.080 --> 0:11:36.280 from the audio drama format, which Ariel and I both love. Yes, 0:11:36.400 --> 0:11:38.840 we have been involved with audio drama before, and we 0:11:38.840 --> 0:11:41.520 we would love to Podcasting is allowed that to come back. 0:11:41.559 --> 0:11:44.080 But this was the era where people were saying, let's 0:11:44.120 --> 0:11:47.120 move those stories over to television. Let's tell these stories 0:11:47.160 --> 0:11:49.960 in a different format. And in ninety eight we got 0:11:50.000 --> 0:11:54.520 sixty minutes. We get sixty minutes every hour the television show, 0:11:54.800 --> 0:11:56.760 right right right, the news show. You know, I knew 0:11:56.760 --> 0:11:59.600 that you did. By nineteen sixty nine, did you know 0:11:59.640 --> 0:12:04.040 that CBS had employees and was making over sixty four 0:12:04.080 --> 0:12:07.040 million dollars? I did not did not know that part. 0:12:07.559 --> 0:12:09.880 And in the next decade. In the nineteen seventies, Uh, 0:12:10.160 --> 0:12:13.480 we started seeing CBS debut shows that would end up 0:12:13.480 --> 0:12:17.320 becoming iconic. All in the Family is often thought of 0:12:17.559 --> 0:12:21.559 as one of the best sitcoms, you know, one of 0:12:21.600 --> 0:12:24.839 the best examples of the sitcom format. Ever, it broke 0:12:24.920 --> 0:12:27.920 barriers of what was acceptable and not acceptable on television. 0:12:28.200 --> 0:12:32.480 That could be a whole article in and of itself. Sure, Mash, 0:12:32.600 --> 0:12:35.520 another phenomenal series, came out in the nineteen seventies. This 0:12:35.559 --> 0:12:37.679 is obviously it's also when I was growing up, so 0:12:37.720 --> 0:12:39.680 I have a lot of fond memories of this stuff. 0:12:39.920 --> 0:12:41.920 It's a little before my time, but I really enjoyed 0:12:41.920 --> 0:12:48.319 Mash and the Waltons, which were the focus of a 0:12:48.400 --> 0:12:50.560 gag I wrote for the video series that we used 0:12:50.600 --> 0:12:53.160 to do large neer drunkle later because we talked about 0:12:53.160 --> 0:12:56.600 Battle beyond the Stars. Yeah, yeah, anyway, that's neither here, 0:12:56.640 --> 0:13:00.120 no good memories. In nineteen seventy four, the company was 0:13:00.160 --> 0:13:04.800 known as CBS Incorporated. And in sony six they start 0:13:04.880 --> 0:13:08.280 seeing a troubling thing on the horizon, because that was 0:13:08.360 --> 0:13:11.680 right when the cable industry started taking off. Cable originally, 0:13:11.679 --> 0:13:14.840 by the way, was just meant to bring television signals 0:13:14.840 --> 0:13:17.320 to people who were having trouble picking them up because 0:13:17.320 --> 0:13:20.320 they were living in either remote areas or they were 0:13:20.360 --> 0:13:23.920 living in dense cities where buildings were blocking television frequencies. 0:13:24.200 --> 0:13:28.199 So it wasn't originally meant to deliver eight billion channels 0:13:28.200 --> 0:13:31.360 with nothing on them, but rather to just allow people 0:13:31.360 --> 0:13:33.679 to get those television feeds that they couldn't get over 0:13:33.720 --> 0:13:35.000 the air well. And this is part of what got 0:13:35.040 --> 0:13:37.400 CBS in trouble because they didn't view cable as a 0:13:37.440 --> 0:13:41.520 competitor and so they didn't prepare to compete with it. 0:13:42.160 --> 0:13:45.040 In eight three, CBS joints with Columbia Pictures in HBO 0:13:45.200 --> 0:13:48.679 and they make TriStar Pictures. But then CBS cells its 0:13:48.720 --> 0:13:52.439 shares to Sony two years later. Yeah, it wouldn't stick 0:13:52.480 --> 0:13:57.720 with that particular approach. And then we get a dramatic 0:13:57.800 --> 0:13:59.680 story in Ariel. I want you to take this part 0:13:59.720 --> 0:14:02.040 because you researched this part and you wrote this. I 0:14:02.080 --> 0:14:05.320 want to hear exactly what was going on here because 0:14:05.360 --> 0:14:09.360 this is the first part where we actually see internal conflict. Yes, 0:14:09.480 --> 0:14:15.439 So in Lawrence known as Larry Tish and his brother 0:14:15.960 --> 0:14:22.000 Robert Bob Tish step in and save CBS from a takeover. 0:14:22.600 --> 0:14:25.320 So TBS was trying to buy CBS. New York Times 0:14:25.360 --> 0:14:28.760 called it a takeover of corporate waters and conservative politicians. 0:14:29.920 --> 0:14:32.120 And this is interesting to me because of you know, 0:14:32.160 --> 0:14:34.640 you look at TBS, that's one of those channels that 0:14:35.200 --> 0:14:38.880 became famous for flourishing in the cable era. Like that 0:14:38.920 --> 0:14:43.560 with Cable is what gave TBS. It's incredible boost. And 0:14:43.640 --> 0:14:46.320 so like you were saying, we're CBS, Hatton really viewed 0:14:46.360 --> 0:14:50.160 Cable as a competitor and now it's directly threatening the company. 0:14:50.640 --> 0:14:53.200 We had Turner behind Ted Turner behind it. Yeah, and 0:14:53.280 --> 0:14:56.400 we here in Atlanta have a lot of stories about 0:14:56.480 --> 0:14:59.600 Mr Ted Turner. Yes, So Larry and Bob use a 0:14:59.600 --> 0:15:03.480 company day own blows to buy a minority stake in CBS. 0:15:04.240 --> 0:15:10.200 They purchased of the outstanding stock of CBS for nine dollars, 0:15:10.200 --> 0:15:14.760 so just shy of a billion, and this stops TBS 0:15:14.800 --> 0:15:18.280 from being able to take over. Yeah. And also Larry 0:15:18.440 --> 0:15:21.880 is invited to join the board of directors on CBS 0:15:21.960 --> 0:15:24.600 and then would later end up being named its chief 0:15:24.600 --> 0:15:28.360 executive officer. Yes. Sadly, during his time as CEO, he 0:15:28.440 --> 0:15:31.400 sold off the record division of CBS and the publishing 0:15:31.480 --> 0:15:35.200 side and had to institute a bunch of cutbacks and 0:15:35.240 --> 0:15:38.560 cost saving measures. Now, the records in the publishing side 0:15:38.560 --> 0:15:40.480 were still the core business of CBS at that time, 0:15:40.520 --> 0:15:42.920 so they were focusing on TV, but they still yeah, 0:15:42.960 --> 0:15:45.920 the revenue generators were there parts of the business that 0:15:45.960 --> 0:15:49.000 they divested themselves of. And it was also that you 0:15:49.080 --> 0:15:52.800 could remove those concerns while concentering on the television. But 0:15:52.840 --> 0:15:55.040 a lot of people question that move if they said, 0:15:55.080 --> 0:15:57.520 they said, if those parts of the business were the 0:15:57.520 --> 0:15:59.840 parts that are making money, why were those the parts 0:15:59.840 --> 0:16:02.480 that you sold off? Yeah? Yeah, it kind of gave 0:16:02.560 --> 0:16:06.000 him a bad rap. It did, however, allow CBS to 0:16:06.040 --> 0:16:09.400 focus mainly on television programming. Yeah, but that was not 0:16:09.560 --> 0:16:13.400 something that would immediately help the company. No. In fact, 0:16:13.880 --> 0:16:17.840 CBS started seeing losses because of these changes. We'll talk 0:16:17.880 --> 0:16:20.480 about how they address those losses in just a moment, 0:16:20.520 --> 0:16:35.920 but first let's take a quick break. Alright, Ariel, let's 0:16:35.960 --> 0:16:41.400 set the scene. It's okay, we've got cable that's still 0:16:42.160 --> 0:16:45.120 very much an issue. It's a growing issue. Yeah, it's 0:16:45.160 --> 0:16:49.320 grown from around seven channels to thirty three, and now 0:16:49.360 --> 0:16:53.160 you're looking at a point where the cable channels are 0:16:53.200 --> 0:16:58.440 starting to become a credible threat to the long established 0:16:58.760 --> 0:17:04.119 broadcast company. Yeah. By cable channels were making revenues just 0:17:04.160 --> 0:17:08.200 a billion dollars under the Big three. Yeah. So if 0:17:08.240 --> 0:17:09.600 you look at the Big three and then you look 0:17:09.640 --> 0:17:13.000 at the cable channels, now, grant you're looking collectively and collectively, 0:17:13.040 --> 0:17:17.159 but still you're starting to say, these these broadcast companies up. 0:17:17.160 --> 0:17:19.560 For the longest time, we thought of as unassailable, like 0:17:19.600 --> 0:17:21.840 they had been around for so long. It was kind 0:17:21.840 --> 0:17:24.960 of like that too big to fail mentality. And now 0:17:25.040 --> 0:17:28.879 suddenly the writing appears to be different. On the wall. 0:17:29.000 --> 0:17:31.000 It doesn't sound like it's too big to fail. Now 0:17:31.040 --> 0:17:33.960 it sounds like you better pay attention to this. Well. 0:17:34.000 --> 0:17:37.160 Part of what allowed cable channels to net almost as 0:17:37.240 --> 0:17:39.560 much money as the Big three is the fact that 0:17:39.760 --> 0:17:43.600 on top of getting ad money, that the broadcasting companies 0:17:43.600 --> 0:17:47.120 also were doing. Yes, they were getting subscription money, yeah, 0:17:47.200 --> 0:17:50.680 which the broadcast companies weren't doing at least at least 0:17:50.720 --> 0:17:55.879 not for another year. Yeah, but two CBS at least 0:17:55.920 --> 0:18:01.120 had one crowning achievement it could point to that was insignificant. 0:18:01.200 --> 0:18:05.679 They were the number one broadcast company in the United States. 0:18:05.920 --> 0:18:08.280 They were the first network to rise to first place 0:18:08.359 --> 0:18:12.240 in just one season. Yeah, which is pretty impressive, like 0:18:12.280 --> 0:18:15.639 being able to go uh and and claim that spot 0:18:16.080 --> 0:18:18.200 and not have it be like a super long trend 0:18:18.200 --> 0:18:20.720 to get there. Yeah. So then in ninety two the 0:18:20.800 --> 0:18:23.359 Cable Act past. This was a big deal. It was 0:18:23.400 --> 0:18:27.560 because it allowed local networks to charge carriers like Comcast 0:18:27.960 --> 0:18:34.360 for t Spectrum a retransmission fee to air their broadcasts. 0:18:34.359 --> 0:18:38.000 So this allowed local news to reach cable subscribers and 0:18:38.040 --> 0:18:41.760 things like that. But the Big Three saw this and 0:18:41.920 --> 0:18:46.200 started also requesting retransmission fees and fees from those local 0:18:46.240 --> 0:18:51.199 networks that were subsidiaries and and syndicating the Big Three programming. 0:18:51.720 --> 0:18:57.400 This ended up creating a real conflict in the television industry, 0:18:57.640 --> 0:19:02.560 and it was an expensive one actually would go all 0:19:02.600 --> 0:19:05.359 the way through the nineties and into the two thousand's 0:19:05.400 --> 0:19:09.720 and up to two thousand thirteen. Really for the next 0:19:09.720 --> 0:19:12.000 part of this particular story, we're gonna get back into 0:19:12.040 --> 0:19:15.360 the nineties in a second, But it was when CBS 0:19:15.400 --> 0:19:20.400 and Showtime stopped airing two specific key markets that time 0:19:20.440 --> 0:19:25.840 Warner Cable was servicing because they were having this fundamental 0:19:25.840 --> 0:19:30.320 disagreement of what the retransmission fees should be. CBS wanted 0:19:30.400 --> 0:19:33.960 their retransmission fees bumped up make more money, and time 0:19:33.960 --> 0:19:36.440 warners saying, I can't we if we do that for you, 0:19:36.520 --> 0:19:39.240 we have to do it for everybody when their contracts 0:19:39.240 --> 0:19:41.560 are And if we do it for everybody, then in 0:19:41.640 --> 0:19:43.520 order for us to make a profit, we have to 0:19:43.600 --> 0:19:47.400 increase the cost to the subscriber, and this customer will 0:19:47.400 --> 0:19:51.040 stop subscribing. Yeah, and you'll see a lot of cord cutters. 0:19:51.280 --> 0:19:53.880 And keep in mind that by two thousand thirteen, you're 0:19:54.000 --> 0:19:58.399 starting to see the early trends of cord cutting already. Yeah. 0:19:58.840 --> 0:20:01.960 At that time, reach transmission fees were already about three 0:20:02.000 --> 0:20:05.280 billion dollars. So it's a pretty big number to start with, 0:20:05.320 --> 0:20:07.960 and then to raise that is a lot. Yeah. And 0:20:08.080 --> 0:20:10.920 on top of that, you can say that this might 0:20:10.960 --> 0:20:15.600 have been an anticipation for that cord cutting trend, the 0:20:15.680 --> 0:20:20.160 idea that the Internet was now the new threat. Where 0:20:20.280 --> 0:20:22.960 cable had been the threat in the seventies and eighties, 0:20:23.560 --> 0:20:27.480 now it was the Internet and streaming services. Yeah. Well, 0:20:27.520 --> 0:20:30.960 back to let's jump back to their CBS gets a 0:20:30.960 --> 0:20:33.840 big blow. They lose the NFL I guess they were 0:20:33.920 --> 0:20:37.320 no longer ready for some football. Fox took it over. 0:20:38.440 --> 0:20:40.520 At this time, Fox became the fourth network, so it 0:20:40.640 --> 0:20:43.639 was the Big four, which I remember how weird that 0:20:43.800 --> 0:20:46.680 was to me when it was happening, because throughout my 0:20:46.760 --> 0:20:49.719 childhood there are only three networks, and then you have 0:20:49.800 --> 0:20:53.760 Fox that officially becomes a network. And in large part 0:20:54.280 --> 0:20:56.439 it was when the NFL came over to Fox. There 0:20:56.440 --> 0:20:59.960 were certain things that really helped establish Fox, the Simpsons 0:21:00.080 --> 0:21:05.080 being one of them, but NFL certainly went a long way. Well, 0:21:05.200 --> 0:21:07.440 the NFL, I think is part of what was keeping 0:21:07.480 --> 0:21:12.960 CBS is younger viewership watching that channel, because outside of that, 0:21:13.160 --> 0:21:15.879 they had programs like Sixty Minutes and Murphy Brown and 0:21:15.960 --> 0:21:18.960 Murder she wrote, and Dr Quinn Medicine Women. Mind you. 0:21:19.320 --> 0:21:21.880 I love all those shows, Yes, but you're secretly fifty 0:21:21.960 --> 0:21:25.760 years old and secretly fifty years old. This was when 0:21:26.040 --> 0:21:28.840 CBS was starting to gain that reputation that this is 0:21:28.880 --> 0:21:32.040 the network that old people watch. Like that was that 0:21:32.119 --> 0:21:34.360 was just generally what people felt. Yeah, but I mean 0:21:34.400 --> 0:21:39.560 the thing is advertisers key advertising ranges twenties to fifties, 0:21:40.000 --> 0:21:42.840 so you get over fifty and advertisers just aren't targeting 0:21:42.840 --> 0:21:46.080 them as much, right, Yeah, you're typically like the sweet 0:21:46.080 --> 0:21:48.679 spuzz like eighteen to thirty four. That's where you really 0:21:48.720 --> 0:21:53.720 are concentrating your advertising money typically, So when you start 0:21:54.040 --> 0:21:58.920 thinking that a channel's demographics or networks demographics are beyond that, 0:21:59.840 --> 0:22:02.760 you're far less likely to spend advertising money. So this 0:22:02.840 --> 0:22:06.880 was a perception problem that CBS really needed to address. 0:22:06.920 --> 0:22:09.919 It's very similar to another story that we covered not 0:22:10.000 --> 0:22:13.160 too long ago on the Brink. Yeah, old spice, Yeah, 0:22:13.320 --> 0:22:15.440 you don't want to be the You don't want to 0:22:15.480 --> 0:22:17.760 be the cologne that you're or the smell that your 0:22:17.800 --> 0:22:19.399 grandfather smells like. And you don't want to be the 0:22:19.440 --> 0:22:22.640 channel that your grandfather watches. I guess I mean unless 0:22:22.880 --> 0:22:26.480 you're me aerial secret fifty year old. Yeah, not that 0:22:26.520 --> 0:22:29.040 fifty years old by any means in my mind, But 0:22:29.119 --> 0:22:32.679 this was this was the perception. Yes, we're not judging, 0:22:32.720 --> 0:22:37.320 I'm closer to fifty than I am to thirty. So uh, Now, 0:22:37.560 --> 0:22:40.800 all of this, the drop of viewership from the NFL, 0:22:41.560 --> 0:22:44.840 the lack of younger viewers, meant that CBS needed to 0:22:44.840 --> 0:22:49.000 provide advertising spots to advertisers at less costs. Yeah, they 0:22:49.040 --> 0:22:52.960 couldn't afford or they couldn't command higher prices, so they 0:22:53.000 --> 0:22:56.439 had to start cutting how much they could ask for 0:22:56.480 --> 0:22:59.520 these advertising deals, which of course hurts the bottom line. 0:22:59.600 --> 0:23:02.240 So what do they do. Well, first, they had a 0:23:02.280 --> 0:23:07.399 couple of shows, The Nanny and Chicago Hope, Yeah, which 0:23:07.720 --> 0:23:11.760 I enjoyed. So they're still catering to the secret fifty 0:23:11.800 --> 0:23:15.639 year old. Hey, let's say Nanny is a solid forty 0:23:15.640 --> 0:23:20.800 two all right, Well, the story continues to go poorly 0:23:20.840 --> 0:23:25.719 for CBS because they actually fall to last place among 0:23:26.200 --> 0:23:30.000 the three major networks. Yeah, yeah, despite Fox being the fourth, 0:23:30.000 --> 0:23:34.360 it's still kind of not counting. Yeah, there they were. 0:23:34.840 --> 0:23:38.320 Fox kind of had this nebulous sort of descriptor as 0:23:38.320 --> 0:23:41.200 being a broadcast network. But keep in mind ninety two 0:23:41.240 --> 0:23:43.840 was when CBS had been on top, and now we're 0:23:43.840 --> 0:23:46.400 talking to ninety four and now they're in last place. Yeah, 0:23:46.480 --> 0:23:49.320 and and at this time Fox was starting to buy affiliates, 0:23:49.480 --> 0:23:54.520 so they're they're rampant sucking up. Yeah. CBS did make 0:23:54.560 --> 0:23:57.000 a profit that year despite being last place in the 0:23:57.000 --> 0:24:02.240 Big three, two one point six million dollars, but that 0:24:02.240 --> 0:24:06.159 that profit was not growth. That was actually they weren't 0:24:06.160 --> 0:24:08.680 profiting by as much as they had the previous year, right, 0:24:09.200 --> 0:24:11.680 because the year before they had made more than three 0:24:11.720 --> 0:24:16.560