A recent article in USA Today stated that Television Networks over the air and cable are ordering more comedy shows than anything else for the Fall 2012 season. There are a lot of different Microeconomic Modalities to this and it is worthwhile to my Microeconomics students to study this in some detail.
Per the article:
TV networks working on next season's new shows still are prepping plenty of CIA and FBI agents, hospital staffs and supernatural doings. But what they really want is comedy: 46 of them, a recent record, are vying for slots on the four major networks, all of which hope to increase the number of half-hour sitcoms they air next season.
It's no secret why networks are pining for laughs. Though almost every returning drama has lost viewers this season, eight comedies have posted ratings gains, led by CBS' The Big Bang Theory, up 21% in its fifth season, thanks partly to new exposure via syndicated reruns.
While ABC's Modern Family and The Middle are still growing, even long-in-the-tooth series such as CBS' How I Met Your Mother and Fox's American Dad, in their seventh seasons, are up over last year. So is Two and a Half Men, where Ashton Kutcher replaced Charlie Sheen in its ninth season.
CBS' 2 Broke Girls and Fox's New Girl are two of the season's top three newcomers among younger viewers. And most of fall's new comedies at least initially attracted decent ratings, while riskier dramas (The Playboy Club, Pan Am) flopped.
Network executives say the still-fragile economy and a fragmented, multitasking audience make comedies less demanding and more likely to break through, especially among the younger viewers that advertisers seek. "It's uplifting kind of comfort food for people right now," says NBC Entertainment president Jennifer Salke, who has ordered 14 comedy pilots for next season, more than any other network, while reducing new-drama contenders to eight.
It would be a good idea to read through this article thoroughly and consider the following questions as a form of Microeconomic Analysis:
1. Under what output market structure do television broadcasters fit? Be specific and go through all the major attributes of this.
2. What kind of product/service are television shows? Look at the different types of products addressed in the 4 different output market structures and their definitions and see which do they most fit.
3. Consider the revenues and costs that TV networks earn and incur. What is the main source of revenue to TV networks? What determines the price they are able to charge to earn these revenues. What are the major kinds of fixed and variable costs to a network?
4. Which market curve is shifting for TV comedy shows? Why is that curve shifting? (i.e. which non-price determinants are at work.)
Please feel free to answer questions and post relevant comments in the comments section.
I hope all my students at Lone Star College and Houston Community College have a great Spring Break next week.
