When is a Network Not a Network?

0:00I've renamed this morning's lecture, When is a Network Not a Network, and I've got two epigraphs this morning. One is from a TV writer named Dave Hackle, the creator of Becker, and he says, I speak at a lot of places and people ask me, why isn't television better? I hate to be a cynic, but I reply, it is because you don't want it to be. Ask, what do you mean? I want it to be better. I then say, no you don't. You watch a bad show and buy the products that are advertising on it. It is your way of justifying what shows they are sending you on TV. You have the power to turn shows off and that will ultimately change what's on television.

0:48And then to quote Joss Whedon, the creator of Buffy and one of the great TV figures of With Buffy, I had a network, the WB, with no real identity that was willing to take chances to establish one. After I met with the WB, I called my friend and said, they were so nice, they respected me and listened to me. He said, yeah, they have no idea what they are doing. We'll see that this is the key to understanding television. I thought I'd talk this morning about the relation of government regulation and movies and television. This issue has been coming up, but this morning I'll try to go into it in some detail.

1:37You know, I've been talking about the commercial market as the basis for culture, but I don't I want you to think, and have sometimes corrected myself, that I wasn't talking about these markets as purely free markets. In fact, we've never seen purely free markets in England or America, even during these so-called laissez-faire periods. And so when I talk about commercial markets, I'm talking about relatively free markets and celebrating that degree of freedom. But it's interesting to compare movies and television to get a hold on how government regulation affects the course of culture.

2:23Because movies began in an almost unregulated environment, whereas television from its inception has been in a government regulated environment. We don't have nationalized television in the U.S., but we've had a television industry that has never been able to make a move without taking a look at what the government's doing. This is a mere fact of history that television starts right after World War II, basically, and movies begin around 1900. in 1900. So movies, in a sense, had a double advantage in that the whole of the United States was relatively unregulated in 1900.

3:12If you're talking about a free market era, it would be 19th century United States, and we're just entering the progressive era when movies are beginning. And in addition to the fact that the economy in general was less regulated, you didn't have these vast bureaucratic organizations like the FCC in place. Moreover, nobody noticed the movies when they began. It's the saving grace for a culture that when new media come along, almost no one recognizes their importance, and certainly the government does. It usually takes the government a generation to figure out, to regulate something.

3:59The internet's a good case of that. The government's now salivating to regulate the internet. But one reason it developed as well as it did is it developed under the radar of the government, even though the government in some sense had created the internet. But this is true, say, of the personal computer industry as well. When you look at the most successful business enterprises in this country, the ones where quality keeps increasing and price keeps going down, they are almost always the unregulated areas, and they're often unregulated because, you know, entrepreneurs are at least a generation ahead of the government. So the movie business was incredibly free-for-all in its beginnings.

4:46no one had real models for it no one knew what they were doing and you see all sorts of things being tried out it's one reason movies developed as quickly as they did into an art form is that it was a you know an almost completely free unregulated environment both in business terms and artistic terms and that allowed people to experiment and develop things quickly I want to stress the artistic aspect of it as well. I would make it a law of cultural history that new media are created precisely because the old cultural establishment doesn't even notice that. I mean for example if you go back to 1800 there was a huge body of criticism established for poetry and poetry He was thought of as the central form of serious literature and, forgetting about government regulation, a poet couldn't make a move around 1800 without feeling the entire weight of two millennia of poetic achievement behind him and established critics.

5:58This would be exacerbated in places like France, where there was an academy of letters and a real sense of what can and can't be done in literature. No one took the novel seriously in 1800. There were not critics of the novel yet. There were no rules yet of the novel. So in some ways, one of the reasons the novel surged beyond poetry as an artistic form at at this point, was no one was looking, no one was telling people what to do, novelists, even just in aesthetic terms, were completely free to innovate and experiment. And you see that at the beginning of a medium. When it takes off, no one but the creators even notice what's happening.

6:47And that's why, in fact, you don't get gradual developments in the medium. but this ghouled model of punctuated equilibrium where you get a sudden burst of creativity and all sorts of things are tried out and then only gradually are the things that work winnowed out. And that was certainly true of the motion picture. So for its first 20, 30 years, the motion picture industry, particularly the United in the United States was incredibly inventive, experimental, and competitive, and it is one of the great ironies that the U.S. government decided the industry wasn't competitive enough, and eventually worked to break up the studio system because it claimed it was a monopoly.

7:39My definition of a monopoly is a business that is granted special privileges by the The government's definition of a monopoly is a highly successful business whose competitors contribute more to the administration's campaign chest than the highly successful company. But again, it's so strange that the government felt it had to break up the movie industry, which it seems to me was one of the most competitive industries. Well, that may be why they really did want to break it up. Anyway, it's really only in the 30s that the government starts paying attention to the movie industry. You've got these calls for censorship, which the movie industry answered by creating self-censorship.

8:26And then again, you start to get into these antitrust suits and so on. In other words, the movie industry had a nice 20, 30 years to develop without the government telling them what to do. through, and I actually figure that the business practices that the industry developed probably were rational because they were the product of a relatively free operation of the market. And so the vertical integration of the movie industry probably was a good idea, though I'm not completely sure of that. In that sense, the movie industry is a good illustration of the benefits of the free market for Cultural Production. Television is an entirely different matter, because television has been regulated since its inception, basically it comes into existence after World War II.

9:18The federal government had grown enormously by then, it had already had experience in regulating radio, and so television never had that era of freedom that the motion picture and I'll just say that I think that's one reason why television was less creative in its first two decades than the motion picture industry was. The history of television is a history of deregulation. That's actually what I'm talking about today, that increasing freedom from government regulation by a by a proliferation of the ways that television can be delivered now through cable, satellite transmission and so on.

10:07I'm going to talk about the Fox Network as the great liberating force in the history of television. But I think it's worth beginning with this fact that if you look at the movie industry versus the television industry, The more the industry that was less regulated from the beginning actually became in art form quicker. Now, in terms of the regulation of television, it actually is a very good test case for us of the question of government-supported art versus market-supported art. Because in most countries, television was nationalized from the beginning. The United States is one of the few countries that had anything like a free market, a competitive commercial market in television.

11:02The tendency in Europe and in many other places was to have a single national television network or maybe a couple of them. And this gives us, you know, it's like the old experiments comparing East Germany and West Germany. Let's see how socialism works, let's see how capitalism works. Well, let's see how public television works versus how commercial television works. And I mean, commercial television just cleans up in this comparison. Now, it's certainly true that some national public television systems have produced some good television programs over the decades. And people always hit me with the BBC. If the commercial television is so good, why is the BBC so much better?

11:54I just advise those people to watch the BBC on a regular basis sometime and sit through the 16 hours of a cricket match and sit through the investiture of the poet laureate of Wales sometimes. Broadcast in Welsh, I find going out. Now, the BBC has produced some great programs over the years. Masterpiece Theatre, but notice that title, doesn't really point in the direction of television. Masterpiece and theater point to prior culture. Indeed, what the BBC has been very good at is repackaging for television things from the high culture of the 19th and early 20th century.

12:40You know, I love Brideshead Revisited. I think it's one of the great things ever produced for television. But ultimately, it's taken Evelyn Waugh novel and translating it into largely cinematic terms, it isn't really specific to television. If you look at, as far as I can tell, all the artistic innovations in television, they come from American commercial television. And I'm talking about technical aspects like developing the three-camera mode of filming sitcoms, to the use of videotape, so on. I'm sure there's something that was developed elsewhere, but I'd like to know what it was in terms of, you know, all the actual technical innovations that give TV the look it has, the way it's produced.

13:29As far as I can tell, they all come out of the commercial networks of America. In that sense, the entire world of public television in America as well and elsewhere is parasitic on the American commercial system. And they wouldn't be, they wouldn't have the tactical quality they do if it weren't for what the commercial TV of the US is producing. And similarly, even in terms of subject matter, you know, it was not a huge innovation in cultural history to bring Brideshead Revisited to television. Maybe the X-Files to television was. That is, the real innovations in programming come out of the United States by and large there too, although reality TV largely comes from Europe, and oddly enough a lot of the shows come from Dutch television.

14:33So, maybe we can blame the rest of the world for some of the worst things on American television, but again, I'm not claiming that there's nothing of value that ever came out of non-commercial television, but the bang for the buck does seem pretty small, and some people tend to to lump together all foreign shows as coming from public TV, but in fact England eventually developed an independent network and the two greatest things to come out of British television as television are from ITV, commercial network, The Prisoner and The Avengers. So probably I guess the best thing to come out of the BBC would be Monty Python that's The BBC has produced a lot of good stuff on radio. They created The Goon Show with Spike Milligan and Peter Sellers, which is one of the great cultural phenomena of the 20th century, probably the funniest thing ever produced in mass culture, although in this case it was through a public network.

15:51And again, as I keep saying, it's not that only commercial TV is good, it's just that its record is so much better in this case than various forms of public TV, and that's pretty obvious if you look at the American situation. And again, you know, public TV, insofar as it's good, is good at things like talk shows TV shows and documentaries and news shows, which is all very well and good and part of television, but to me it doesn't seem to be the aesthetic side of television, which would be the production of TV shows, dramas, comedies and so on. Now to look briefly at the history of commercial television in the United States and see the impact that government regulation has had on it, From the beginning on the model of radio, television stations are licensed by the federal government.

16:49Movie studios were not licensed by the federal government when they were developing or even ever since. If you wanted to set up a movie studio, you did and you started making movies. That was not true in radio and not true in television. and the government early on made a decision that the public airways were a public resource and they should remain, in effect, owned by the government and simply licensed. We now think that was inevitable. In fact, it was not. There were alternate models possible. The homesteading program with public land in the 19th century was a possible model.

17:35People could have been allowed to homestead parts of the spectrum and if they made it work they kept it and if they didn't they would be off the air and indeed probably it would have been a better idea to privatize the airwaves as soon as possible, turn them into private property and then if you weren't using the band of the spectrum you had well enough someone else would buy it from you and do a and a better job with it. That sounds crazy to us now. I don't have time to show you how that might have worked out, but there are a lot of arguments that say that if we'd allowed the airwaves to be homesteaded and turned into private property, we'd be a lot better off. Again, it sounds laughable, but that's basically how the United States treated public land in the 19th century.

18:25Anyway, that's water under the bridge. Someday maybe we'll have the true privatization of the airwaves. The major fact to understand is if the government wants to take away your broadcast signal from you, they can. And that, above all, has kept all the networks in line. That's why they do these public service things. There's various things that have to get your license renewed. Any TV station, any radio station periodically has to get its license renewed. As you may know, they all keep logs with testimonies from people in the community, what a good job they're doing, and so on. And all of the FCC regulations follow from the fact that, you know, the ultimate threat, the soredomicles in broadcasting is that they'll take your license away from you.

19:22But moreover, there are a whole series of laws that govern the structure of TV networks. And again, the fascinating thing is the government's obsession with not allowing vertical integration in the TV industry, just as it objected to vertical integration in the movie industry. Again, with movie studios in the classic era of the 30s and 40s, the movie studios had a production arm, a distribution arm, and, in effect, a retail arm. They produced the movies, they distributed them, and they owned their own theaters, and they showed their movies in their theaters. Now, I don't know if that, you know, is written as the 11th commandment that that's the way the world should be.

20:11It is a system that evolved under relatively free market conditions, and I assume it had Many industries are vertically integrated. There's a lot of logic to bring together production, distribution and retail. For one thing, it allows a lot of feedback in both directions so that the producers know that they're producing what the retailers think will sell and so on. and so on. And, you know, for example, the oil industry is vertically integrated. It's a common form of industrialization. But for some reason, our beloved federal government decided this could not be and forced the studios to sell off their movie theaters roughly around 1950. And Hollywood has never been the same since, and many people think it's been worse The Federal Regulation of Television has been to avoid vertical integration as much as possible.

21:18Again, think of the situation here. Again, we have the production of television shows, we have the distribution of marketing of them, and then we have the delivery or broadcasting of them. Now, by now, because of deregulation, the industry has become increasingly integrated vertically. But in the 50s, as television emerged, one of the key rules was that no network could own more than five stations itself. That was a limit on vertical integration. What that meant was, the money in television is not in production, it's in broadcasting.

22:08To produce shows, you've got to spend a lot of money and risk a lot of money, and the returns are very difficult to predict. The one thing that is very easy to predict is you will always be able to sell airtime to advertisers. The cash cows in the television industry are the actual stations themselves, who, you know, buy the programs and broadcast them and sell time to advertisers, or in cable charge directly to subscribers. So what everyone really wants is the TV stations, but the federal government set a limit that that you could only own five stations and the rest would have to be independently owned.

22:58The result was, in the 50s there were five huge television markets. I think it was, you know, it was New York, Chicago, L.A., I think Washington, D.C., whatever it was. Basically, the networks we know were created by buying or forming their five stations in In the five big markets, and moreover, this will sound very quaint to you, but getting a spot on the dial that had the best signal, it happened to be channels 2, 4, and 7, I believe, which is why in New York City, CBS is channel 2, NBC is channel 4, and ABC is channel 7, and this gave a tremendous, whoever got in first had a tremendous advantage, one, you wanted Each of your allocated five stations to be in the five biggest markets and you wanted to get the best spot on the dial.

24:00This is largely the reason why for decades we had three networks and three networks only. It's very complicated. They started off there were four networks and then only CBS and NBC and ABC came into existence a little later I always was kind of the poor stepchild of the big three, but for the youngsters among you, it's probably hard to imagine the days when basically there were just these three networks. For much of the 50s, 60s, even well into the 70s, the three networks had 90% of the prime time audience. I mean, they now have under 50% and it's probably approaching 40% and it can't shrink fast enough, in my view.

24:50But I just want to suggest that the fact that three networks were able to dominate the way they did, you know, there were other reasons for it, but one of the reasons was the structure of the industry The Federal Regulation had created in saying how many stations you could own in any case. Another impact that the Federal Government had, another negative impact it had on the content of television. In the so-called golden age of television, which is the 1950s, the networks actually had very little to do with programming and even with production. They did produce, you know, they had their news shows, they had their late night shows, they had their morning shows and things like Today and Tonight, developed in the 50s and Tonight Show, for example, is the most profitable show in the history of television at various points, it's accounted for 25% of NBC's profits, but most of the shows in prime time were developed independently and the way it was largely done was you got someone to sponsor your show and you then just bought time on the network to show the show.

26:20So, again, probably too young ever to have seen any of this, but in the 50s, you know, Milton Berle's show was the Texaco Milton Berle Hour, Although there was the Colgate-Palmolive Hour, I mean, sponsors were simply identified with the show. What happened then, so you wanted to do a television show, you got your own sponsor. You approached someone like Texaco, and you got them to put up the money, and you produced the show, and then together you bought time on NBC to broadcast it. But NBC was only, or the networks were only in the business basically, in addition to The shows they produced for themselves, they were basically brokering time on the networks.

27:10I think it's 1961, the then chairman of the Federal Communications Commission, Newton Minow, after whom the boat in Gilligan's Island is named. The reason that's named the Minow is that Sherwood Schwartz hated Newton Minow. Newton Minow famously called TV a vast cultural wasteland. and he wanted to do something about it and put great pressure on the networks to clean up their houses that's it's in the early 60s that the networks decided they had to become in charge of programming and they stopped this practice of a sponsor being able to just buy time and show whatever the sponsor wanted and it's in the 60s that the sort of classic television pattern developed of programming departments and the big three networks The Sherwood Schwartz has said, suddenly, three men were in charge of everything that appeared on American, well, 90% of what appeared on American television, the programming heads at NBC, ABC and CBS.

28:14That regime, which we think of as sort of the classic television regime, is the product of government intervention. And especially, yeah, especially the fact that now, to get your show on the air, you had to approach a network to show it. The network would then get the sponsors for it. And Sherwood Schwartz talks about this in his autobiography, that suddenly you went from a situation where you had sort of every big corporation in America as a potential sponsor for your show So, to having to convince one of three men to let your show on the air. He claims that that really dampened creativity in television.

29:01That the access to TV was much greater in the 50s when all you had to do was find your own sponsor and you could get on the air to a situation where suddenly the networks were exerting their power determining what would be a program. So it is kind of interesting that what everybody calls the golden age of TV was a product of, in effect, a less regulated marketplace. And again, when TV was more experimental, it settled into the mode we mostly think of in the 60s, which was the great era of broadcasting, that is, that these networks wanted the broadest And therefore, they pitch their shows to the lowest common denominator, and this is the era of Beverly Hillbillies and Green Acres.

30:01You know, you have one show where a country from the rural south goes to Los Angeles, and that seems to be working. Hey, let's have a show where a family from Los Angeles goes to the rural south, and really creative programming it was. In retrospect, one reason for what now looks to us like a lack of creativity in television is that there was a lack of experimentation because, again, everything was being processed through three central points. Now, it's not as bad as what you had in countries with only one station, especially if that one station was essentially controlled by the government, but three stations is better than one, but it ain't enough.

30:58In other words, through a series of government regulations and interpretations of that regulation, the television industry in America grew increasingly centralized, especially in terms of what was being programmed. Now, that's where Fox comes in, Rupert Murdoch comes in, cable TV comes in. What has caused the great creative explosion in American television is the gradual breakdown of that three-network regime. And a lot of people participate in this, but no one deserves more credit than that billionaire tyrant, as the Simpsons calls him, Charles and Rupert Murdoch who saw that a fourth network was possible and I mean I lived through this and I remember how laughable it seemed to everybody that this Australian was going to create a fourth American network and no one laughed more than ABC, NBC and CBS at the, as it was always called, the fledgling Network. Now, one of the things that shook up television was new technological possibilities.

32:25The fact that television needed to be broadcast over the airwaves and the government refused to allow airwaves to become private property and simply licensed them out meant that access to the airwaves was very difficult, you couldn't just buy it, you had to get a license and people were sitting on licenses, which were licenses to coin money in a way. And so as cable developed and then satellite transmission, it of course changed the picture because there were now alternate ways to deliver television and potentially infinite numbers of them.

33:15Again, there's no one planned this. It's again a case of a spontaneous order development. Cable originally was developed simply for places where the broadcast couldn't be received, for mountain communities, places in some deep valley or something. The original idea was you only had cable because there was no other way to get the TV signal to you. It actually became advantageous in Manhattan because of all the tall buildings, broadcast transmissions had always been difficult to receive in Manhattan and so on. But nobody developed cable with a view to the Sopranos and Curb Your Enthusiasm and HBO Boxing. It was really originally just a solution to a technical transmission problem, but we're talking about markets here, so very quickly people started to see that there were new possibilities for programming once you could bypass the tyranny of the three networks.

34:15Not really a tyranny, I have to admit, but I'm just being a little dramatic here. So a whole series of things broke down what my left-wing colleagues would call the hegemony of the three networks that persisted, you know, up through the 70s. But Rupert Murdoch and Fox is the key player here because they managed to establish a fourth network in broadcast TV. Now, to do that, they used a lot of UHF stations, which had poor signals and were sort of the step-children. FOX was referred to as the code-hanger network for years, because to get in UHF, you need this kind of weird-shaped antenna, and if it didn't work, you tried a code-hanger.

35:07Now, the interesting thing about Fox is how innovative it truly was, both in terms of programming and in terms of a creative use of government regulation. And my whole point here is that Fox shook up television programming because for commercial reasons they knew they had to. From the very beginning, they understood that you couldn't become the fourth network by simply becoming the fourth network. They couldn't just imitate what ABC, CBS and NBC were doing. In fact, they realized that their opportunity was that ABC, NBC and CBS had become too much like each other.

35:57And so they did a lot of studies, and here's a quote from one of the guys who did the studies for them. What we found was a tremendous vacuum, essentially. Every viewer had a problem with every network. They would say things like, they cancelled my favorite show, or their shows are all the same, or they only do one show that is hit and then everybody copies that. There was a very strong theme of very repetitive complaints about the three networks that indicate to us that if we had innovative programming, if we had programming that focused on particular age groups, if we had programming that pushed the edge, if we had programming that we really If we really stood behind, then we thought we could really appeal to a very strong need and interest that the consumers were indicating to us that they had.

36:42And, you know, a lot of thought went into the development of the Fox Network. I mean, today it's part of history, and again, for the younger ones among you, it's like an established part of your life. But there was a time when nobody thought Fox had any chance of succeeding. and they succeeded I mean partially because Rupert Murdoch was willing to throw billions of dollars at it and take an enormous risk to develop it when everyone was telling him he was crazy to do it but also because they thought outside the box they didn't just think well the way to have another network is imitate the three existing networks and so all along they operated differently from the other networks and I'm going to give you some examples of that just the way they ran the network they ran it seeking feedback all along they were they operated more by trial and error than the established networks of course The networks were sitting pretty. They had 90% of the audience. Things seemed to be going great.

38:04They had gotten complacent and they were used to doing things the way they'd been doing them for 15, 20 years. They saw no reason to change. They would plan out a whole season advance and let it go and see, you know, at the end of the year maybe reconsider. Fox from the beginning met every week to see how things were going. and the executives would have these sort of mass meetings at Fox headquarters and bring in everybody from the accounting department, from the sales department, and listen to them. And here's an account. This is when Barry Diller was running Fox. He said that the people in programming, who had enough trouble being second guests by Diller, Kellner and Rupert Murdoch, suddenly found themselves at these meetings dealing with comments from all sides.

38:55A woman in the accounting department says, I'm really upset about the way women are treated unmarried with children. Well, the program department has worked this all out, we said, and we have rationalized it, and we understand that it's a retro thing and surreal and postmodern. And what the hell is the accounting department woman saying she's very upset about how they're treated unmarried with children? They didn't like the feedback. Nobody likes to be told what to do, but they did listen, and indeed, that's why married with children lasted nine seasons. And again, one of these Fox executives says, this is all from this wonderful book, The Fourth Network, by Daniel Kimmel, which really gives you insight in how television actually operates.

39:41This is someone saying, I think the idea of having everyone in a company around a table once a week to talk about what they watch on television, What's good? What do you not like? What do you like about what we're doing? Is a great way to get everyone's feedback, because television is one of those businesses where everyone has an opinion, because everyone's a customer. Indeed, Ansier felt it was healthier for the, healthy for the programming department to hear from their co-workers. But it's hard because people generally don't want to speak their mind about programming for fear of upsetting others when in fact we need honest feedback. I've been saying this ever since the Victorian Novel, that what's really healthy in culture is a feedback mechanism, and that again isolating the creators from their audience is a bad thing. And what I'm saying is one of the characteristics of Fox that made it work is they sought out feedback and created institutions that provided it. For example, there's this great dialogue between one of the programming people and

40:46Barry Diller, who was then the head of the network, where the programmers were pushing cops, which is still on, with a great success, but Barry Diller didn't want it, the head of the studio. Keneally insisted that the grittiness and toughness was a major selling point for the series and would help Foxware's weakest on Saturday nights. Why do you fight for this show? Diller demanded at one meeting. Why do you always bring it up? Keneally replied, because people watch it. Diller's response was as deadly as it would prove ultimately to be ironic. People will watch car accidents too. Do you suggest we program those? And of course the rest is Suffolk's history and the world's wildest police videos.

41:35Barry Diller inadvertently invented a whole genre there, but I think these stories are marvelous and illustrate how television actually operates. But I won't read all of this, but basically it goes on to suggest that in part because Barry Diller came from the movie industry, he shook up the whole way television operated. Every week he met and evaluated what was going on and what worked and what didn't work. Network. Try to figure out if the ratings were because the show was good or because it had been promoted a certain way. And so Fox began to turn on a dime. Again, networks used to... It was rare for a show to be canceled mid-season in the classic era of the big three networks.

42:21They basically made a decision, they went with the show. At the end of the season, they might decide to cancel it. Fox, you aired on Tuesday, you were canceled by Wednesday in many cases, and now by and large everybody has imitated these means of Fox, but the Fox increased the pace of television decisions because they had to, they were putting such garbage on the air, they had to yank it immediately. So this is one way it succeeded is it broke the rules of television. It also, however, exploited the rules of television and here's the amazing thing I discovered in reading this book.

43:07The Fox network succeeded ultimately for only one reason. It was not a network in the eyes of the federal government. That is, it turns out that according to the FCC, the definition of a network is someone who puts on 15 hours of programming a week. And Fox did not. As you know, to this day, Fox doesn't have programming from 10 to 11 at night. In its earliest days, it didn't even attempt to program all the nights of the week. Fox, for the key years, stayed within that 15-hour limit, which then made them exempt from the then-current FCC regulations.

43:54Above all, it meant Fox was not limited to owning five TV stations. And even though the prime stations had long been occupied by the three networks, Fox was at least able to own more stations than any of the networks. They weren't as good, but additively Fox ended up with its own, with its network-owned stations, it was able to cover more households than the three networks did. Moreover, another FCC regulation which applied to networks, which means only to entities producing 15 hours a week, was the so-called syndication finance rule, that is, in another attempt to break up vertical integration, the FCC did not allow a network to have a financial interest in the syndication of any show, including shows that it produced itself.

44:53That's why, for example, CBS at one point had to spin off its syndication arm into a corporation called Viacom. The real money in producing shows is in the aftermarket, selling a show into syndication. You know, that's the whole business why a show wants to reach a hundred episodes, because that makes it eligible for syndication in the eyes of stations buying them. Especially the bulk of independent stations don't have any network affiliations. What they do is show reruns of old network shows, you know, like Seinfeld, like Friends now. And the huge money, the billions of dollars are in selling those shows.

45:39And for a long time the networks were not allowed to do that, again by this FCC regulation. Fox, which has a heavy production arm, because it's linked to a movie studio, had a huge interest in syndicating its own shows, and was able to, because it stayed within this 15-hour limit. Now it got very complicated at times when they approached it. Fox was very good at manipulating the FCC in this regard. For example, the FCC said that UHF stations count only half when it comes to the hour limit, and so on, because they have weaker signals and so on, and at the same time, but at this point, the other networks were outraged and they who had denied that Fox ever could become a network were now saying, hey, it is a network, apply the same rules then.

46:39Anyway, I don't want to get into the details of this or the morality of it, the ethics or the legalities of it. I just do want you to get some sense of how key this minefield of government regulations is. And that when you talk about, you know, the free market in TV, it's a bit of a joke, but the point here is that the Fox network was very good at finding its way through the minefield. There's one passage I really do feel I have to read to you about it, if I can just find it now. Where is it?

47:24Well, no, I can't find it now, so I have to skip that one. But anyway, Fox became a success in part because it exploited the rules that governed television, in part because they were just very shrewd in terms of taking on the other networks. They were very good at counter-programming. They actually pursued what would be known as a roll-out strategy. Again, many people trying to create a fourth network would have said we have to have programming every night like the other networks. Fox made a conscious decision, we're just going to go after Saturday and Sunday night.

48:09If our Sunday night programs click, we'll go to Monday night. If our Saturday night programs click, we'll go back to Friday night. As it happens, Sunday is what clicked and they moved to Monday and so on. They built the station, the network almost night by night, and again they were very smart in their sense of not trying to take on too much at once and realizing the only way to do this was to do it gradually. On the other hand, so in some ways they went step by step, in other ways they made incredibly bold moves like buying the NFL away from CBS. That cost Murdoch a fortune and was not at all worth it financially. He knew he was going to take a bath on that, that he paid so much for the NFL rights that he could never recoup it on advertising, but he had a very farsighted vision and realized that it was worth taking the loss on NFL football to establish Fox's credibility, that for people

49:13to look at a network while all the time he was keeping it from becoming a network technically. He needed something big like the NFL. He also realized that the NFL was cheap as an advertising platform for all his other shows. That even if he wasn't going to make enough advertising revenue from selling time, he could use the NFL shows to promote the whole Fox lineup. and again that he wasn't the first to see that then I think ABC was the first to understand the value of the Olympics in that sense that ABC always took a bath on the Olympics in terms of sense but used it to promote its fall lineup and that's why the Olympics was moved to August some point in history but anyway so Fox was is very clever in the business end of this whole system, but also in the creative end, and this is, you know, I'm trying to talk about the connection between commerce and cultural creativity here, and so it's important to see that Fox turned all its disadvantages to an advantage, and the result was programming history.

50:31Let's look at The Simpsons and The X-Files in this respect. We viewed some sample episodes last night. And, you know, I have a... When I tell you that Shakespeare is the greatest dramatist ever, you believe me. When I tell you Dickens is the greatest British novelist ever, you believe me. I understand that when I tell you that The Simpsons and The X-Files are the greatest television shows ever, maybe you don't believe me. and this is the problem with dealing with contemporary culture, the canon hasn't emerged yet but I you know there are a lot of people that agree with me on this, the market agrees with me, again we don't have to say great but there are two genuinely great shows and they are shows which already are standing the test of time, there are shows, you know, the Simpsons is the best comedy, the X-Files The Simpsons, The X-Files, The Best Serious Drama, they certainly are shows that achieve commercial and critical respect.

51:38In many ways, I think I'm safe in saying that they were the signature shows of the 1990s, that the shows that most define that period are The Simpsons and The X-Files. And what is astounding is to realize that they were on Fox. That is, up to that point, I mean, all the signature shows were on one of the three networks. And now it's actually incredible how few of the defining shows on television are on the networks. They've begun to recuperate because they've begun to imitate Fox and the cable channels. But you know for the 90s and well into the 21st century really the truly innovative creative defining shows were coming out of HBO and Showtime and Fox.

52:36Again the networks, the old networks realized what they were doing wrong and now have adopted most of the business practices or lack of business ethics of Fox and are now sort of coming back into the picture. So it's interesting that shows like Lost and Desperate Housewives are on ABC, but Fox is still in there with 24 and the prison break, but I think it really says something about about the change I'm talking about in television, that the violent shows of the 90s were on Fox. And that's because Fox had to do something different.

53:21So if you look at these two shows, you know, both of them seem so improbable, and I guarantee you that no network would have shown them in the 1990s. both violated long-standing television rules at that point for primetime. No animation, no science fiction. There hadn't been a primetime cartoon show since the Jetsons. We know Jeff Tucker is the world's expert on that show. And there have been very few sci-fi shows and no successes. And, I mean, it was one of the most common rules in the programming department. I don't want to hear about a cartoon, I don't want to hear about a sci-fi show.

54:10In fact, Fox had tried a show called Alienation, which in many ways is a predecessor of the X-Files, but it had failed. And so it was really daring to put these shows on, but it's easy to be daring if you've got nothing else to do. I mean, Fox, I mean, they were not going to compete with the networks by just imitating what the networks were doing. They had to try something different, and The Simpsons was appearing on the Tracy Ullman Comedy Variety Show in two-minute segments, and sort of caught the eye of some people at Fox, and James Brooks was producing that show, And they got the idea, okay, we'll try to do a half-hour version of it.

54:57They didn't have much hopes for it, but why not give it a shot and see what happens? Similarly with the X-Files, it's very interesting that going into that season, Fox was pinning its hopes on the adventures of Briscoe County. That was on at 8 o'clock, and the X-Files was going to follow it. The X-Files almost didn't make it onto the air. Briscoe County was going to be the big hit, and so they had some time to fill after. Briscoe County barely lasted one season, and the X-Files made it. It's interesting in both cases, everybody takes credit for programming both shows.

55:42It does appear that Murdoch was personally involved in both shows, that he screened the I think if I'd been in that position, I would have given a go-ahead to The Simpsons. I already liked it from the two-minute segments. I'm absolutely sure that seeing the pilot of The X-Files, I would have said, you've got to be crazy to program this thing. It took me almost two years to get to like the show. And I am really, really impressed with people like Murdoch who can make decisions like that, especially when it comes to money. And when they're risking their own money, it's very easy for academics to make decisions and call the shots because they're not risking anything.

56:30They're also, they're so cocksure of themselves and they're usually so wrong. I just noticed, look at this wonderful book, Global Television and Film by Hoskins, McFadden and Fitt, which is by business school professors and it's better about television than anything I've read by cultural studies professors. It's really knowledgeable, and yet it contains this line, because Independence Day was a blockbuster in 1996, we know that we can expect a sequel in 1998, and even if that does not do particularly well, we are still likely to see part three released in the year 2000. Forget about it. I mean, notice how confidently they say that. We're professors, we know the logic of sequels.

57:17Independence Day was a blockbuster. They don't even, you know, they barely hedge it and I've seen this so many times in the books I've been reading when professors think they've second guessed the industry and they absolutely know what will happen. That's why they're professors and they're not executives in the entertainment business. So anyway, here's Fox, faced with a whole schedule to fill, a whole 15 hours, and so they keep trying things out. And some things worked, some things didn't. They were very quick to turn around. On the other hand, they did have some faith in their shows.

58:05The X-Files is a good example where it didn't do that well the first season, either critically or in terms of ratings, but something did feel right about it, and they kept it on. And there's a show that built gradually. Again, I'm saying that one of the things Fox did was to cancel shows quickly when they

58:56What Fox noticed was that this show was being talked about on the internet, that there were all sorts of websites, but Fox created a website for it. It was getting more hits than any other show on television. It was by no means the highest rated show on television by far. But in this weird new form of rating, it was getting 25,000 hits a week. and so it's really interesting that Fox was willing to say you know there's something happening here, we're not quite sure but we'll let it go another season and in fact the show, it really is a case of a show that built a kind of grassroots momentum, much as Star Trek did but notice Star Trek still ended up being capable of doing it.

59:55If the X-Files had been on a network, it probably would have been cancelled after one season, maybe after two or three. The point is that the way Fox transformed the television scene is that it simply established more outlets for creativity on TV. Again, if you go back to what Sherwood Schwartz was saying about the big three network regime, The problem was, you'd gone to a situation where you basically had to convince one of three entities to put your show on the air. If you couldn't convince ABC, you went to NBC, well actually, let me get this right, if you couldn't convince CBS, you went to NBC, and if you couldn't convince NBC, out of desperation, you then went to ABC.

1:00:46But that was it then. If you couldn't convince one of those three networks to put your show on the air, you People were out of luck, except finally, starting in the 70s, people started to independently syndicate shows, produce shows that went directly into syndication and bypassed prime time showing stuff. But still, very few outlets. The mere fact that you suddenly had a fourth opportunity with the Fox network was very important. And then the UPN came along, the WB came along. We're now merging into one. We'll have five networks starting in the fall. But beyond networks now, we started to get the cable channels bigger and bigger players themselves in the market.

1:01:35And so this has spawned what I feel is the true golden age of television. We are living in the golden age of television. I actually grew up in the 50s, and I remember the golden age of television. And I remembered fondly, and now that we have DVDs, you can see Sergeant Bilko again, and you can see the Sid Caesar Show, and they're very good, and they hold up. But a lot of the Golden Age, when you see it now, looks laughable, because the production values were so bad, and in many cases, these shows that we remember so fondly were not so great. I don't want to denigrate it, but in retrospect, it's looking very limited by comparison with current television. television. It is interesting here again that academics, like all human beings, are so nostalgic.

1:02:25And for example, there's a very good book by a man named Thomas Hibbs called Shows About Nothing. It's largely about Seinfeld, and it's very good. I think he fundamentally gets it wrong. He thinks Seinfeld was celebrating those characters, whereas it was deeply criticizing him, and he criticized the show for being nihilistic, when I think it was, you know, a kind of diagnosis of the pathology of nihilism. But in any case, one thing he does in that book is to compare Seinfeld unfavorably with I Love Lucy. and it is you know oh back in the 50s shows were so great there was I Love Lucy and now in the 90s we have degenerated to Seinfeld now I Love Lucy was a very fine show it holds up very well it's very very funny to this day largely because of the talents of Lucille Ball as a comedian it was a very important show in the history of television Desi Arnaz who was a genius producer invented the so-called method of three cameras

1:04:04The age of culture is whenever they were growing up, and it's like any other human being that the stuff you first liked somehow becomes your standard and everything's always going downhill from there. And you know, nobody in the 1950s was holding up I Love Lucy as the ideal standard of cultural creativity. I would like to see that once, that what people now call golden age was considered the golden age in its own day. And, you know, I'm now saying we're the golden age of television. You know, 40 years from now, people will probably be saying that, professors will be saying that, but other people will have moved on and be seeing what's so quaint.

1:04:54We were just talking about the nice fact the X-Files seemed to hold up last night. It doesn't look dated, certainly not in its production values, but anyway, this is a very common pattern, cultural nostalgia, it's the driving force behind much of the critique of commercial culture, because people forget the commercial basis of earlier art and always are faced with the commercial basis of contemporary art, and so when they idealize the past period, they also write out its commercial basis, as if I love Lucy had been produced by the National Endowment for Arts, not with regard to any commercial considerations like this vulgar show Seinfeld today.

1:05:39So in fact, what I'm claiming here, the deregulation of television has opened up exponentially the creative outlets in the field, and in part that was driven by people like Murdoch Dr. Block himself, who in effect rewrote the rules, but eventually, even the Federal Government got the message, and so we have had deregulation in some important forms. The syndication rule has been scotched, and now networks can syndicate their own shows. I finally found the passage I was trying to read to you. I will read you some of it because it bears so well of the story I'm telling here.

1:06:36At one point, Fox found another creative way to own more stations than it was legally entitled to, and NBC called us to the attention of the FCC and Fox's senior vice president of government relations. What you have to have in your corporation now is Senior Vice President of Government Relations said NBC is simply using the FCC to thwart competition in the marketplace. And that is so true. It's so true in these antitrust cases. They're always secretly brought by the business' competitor. They're the ones that are spurring the government on. So things got very dirty between Fox and the other networks. Murdoch had to become an American citizen in order to own a TV network at all and there was touch and go at a certain point whether he could learn the Constitution fast enough to pass his exam and get the citizenship in time. There's a lot of legal infighting between Fox and the networks Networks, and then there was this moment where they were setting up a kind of shadow corporation

1:07:49that was going to own stations for them. The goal was clearly, this is the goal of the other networks, was clearly to hold up the license transfers of the TV stations to SF Broadcasting and tie Fox and Knott's in the process. Fox's problem was that they were as creative on the legal and business side as they were As they had been on the programming side, that's the thing I'm trying to show you here. They hadn't necessarily broken any laws. That's what the FCC would have to determine, but they had done a lot of stuff that hadn't been done before. Padden, this Vice President for Co-relations, Padden recalled that SF Broadcasting had originally been set up as a limited liability corporation, an LLC, which would require different treatment under various laws than a standard corporation.

1:08:37I'll never forget, he says, council for one of the older networks said to me, he was huffing and puffing over this latest station move and said, why I've never even heard of an LLC? This was council for one of the other networks. I laughed and I said, you know, I don't think there's an FCC rule that limits us to forms of business organization that you've heard of. That's the triumph of Fox. And again, I want to stress it was both on the creative side and the business side. So again, looking at the history of the X-Files, the show itself sought out feedback. I was talking about this last night when we were watching the episode that one of the characteristics of the X-Files is that the creators paid attention to what was appearing on the Internet.

1:09:29And I'll repeat that example that when they had the first episode that had the lone gunman in it, these three nerds that helped Mulder out, Glenn Morgan who wrote the episode was very disappointed in it and he said, that's it, I'm not bringing these characters back. As you may know, they were part of the staff, I mean two of them weren't even actors I think, but the internet lit up. Put three computer nerds on TV in the era of the internet and Who's going to love them? People who are on the internet. And so they decided, okay, we'll bring back the rest of this history. They were a real much needed comic relief in the X-Files and once got their own, eventually got their own series, so that didn't succeed.

1:10:17But the point here is that as every form of popular cultural production I've been talking about, television is messy. It's trial and error. It's feedback. Fox kept innovating. Some of their first successes were Married with Children, 21 Jump Street. I mean, these aren't exactly candidates for the artistic hall of fame. On the other hand, they had a show with Chris Elliott called Get a Life, Life, which I really loved and thought was very innovative. It failed pretty quickly. But its track record ended up actually in the 90s being better than that of the big three networks, who've now had to catch up with it. And so television has operated just the way we saw movies operating, just the way we saw the Victorian novel operating, and really just the way the theater operated in Shakespeare's day. Again, this pyramid and infrastructure. Television produces a lot of garbage, but that has to be the basis for the peaks, because no one can predict the peaks in advance.

1:11:31It is just, it is really interesting to read these gossip books about television, to see the real stories like Desperate Housewives. Everybody turned that show down till ABC finally picked it up in a kind of desperation move. You would think to read the Marxist accounts of how powerful the TV executives are, you would think that they're such geniuses that they always know a hit where they see it, and always know a miss where they see it, and in fact they don't. and that's why several of these books I've read have chapters entitled Revolving Doors.

1:12:19I can't even give you the sequence of the executives who ran the Fox network or the very... I mean people were in and out so fast and that's very characteristic of the entertainment business. Turnover in management is even higher than in other businesses. It's just such a volatile area, and this is one place where academics in general, and Marxists in particular, are very bad as cultural analysts because they look at frozen snapshots. Again, this is a place where we as Austrians understand what's wrong. They take a static moment and analyze it, and they look for equilibrium, we would say.

1:13:07And if you look at just one moment in the entertainment business, you can say NBC is on top, ABC is on the bottom, the NBC executives are in control. It looks as if someone is in control of the whole system at any given moment if you take a frozen snapshot of the industry. But if you let the camera roll, you know, in a couple of frames, NBC is going to be on the bottom and ABC is going to be on top. and executives are going to be in and executives are going to be out and in fact no one's in control. It is a marketplace and things are constantly changing. Why? Because this is an area where consumer preference is so volatile and so constantly changing.

1:13:54But again, Austrian economics allows us to understand that there never is an equilibrium moment. There's only movement towards an equilibrium, but because the underlying demand is always changing, you will never reach a frozen point with the evenly rotating economy of the entertainment industry. No way. It is so volatile, even from medium to medium. I, you know, you look, the youth among you, you probably accept the world of television as it is now. That there's cable, there's all these channels, and so, you know, that looks very different to someone like me who grew up in the 50s and saw the era of the three networks.

1:14:44I completely expect that television will be unrecognizable in another 20 years. I think it's going to be merging with the internet in various ways. I think DVD production is going to change it. People will be producing direct for DVD and marketing shows directly to the consumer. I mean, if I understood this better, I'd be a Hollywood executive and wouldn't be wasting my time as an academic. But I just have some sense from looking at the world in the past that I at least can tell you things are going to change radically. And I maybe can guess some of the ways they're going to do it. I mean, again, first video cassettes and then DVDs really change the picture in entertainment, the fact that if something failed in broadcast, it might recoup in DVD.

1:15:40DVD. You know, classic case now is the show Family Guy, which Fox canceled. It was so popular on DVD that it got revived, and now I hear the same things happening for Futurama. What has happened basically is the market has opened up and broadened, and that's a good thing. What amazes me is many academics say it's a bad thing. I mean, you know, I I am just stunned at the stupidity of my colleagues, their denseness at times. I mean, you know, I've seen people give the exact same analysis that I've been giving, and that shows, you know, certain intelligence on their part, but then it stops when they draw the conclusions.

1:16:31They lament the lack of consensus now in television. Marxists get nostalgic about the era of the big three networks. You can't understand, they were big corporations. We should be thrilled to be rid of them. But no, I read these Marxist analyses, it's the bowling alone argument. It's the viewing alone. Television used to bring us together. Now, not enough because there was three networks. We should have had one nationalized Facebook group. but you know three networks we could settle for that and now you get all these laments for the proliferation of outlets and TV you know America is coming to an end because the share of the three network news programs is in precipitous decline and you know when Tom Brokaw retired and Dan Rather retired the end of an era the network anchors used to bring us together America had a common point to refer to. We all know what that common ideology we all referred to that was promulgated on the three networks.

1:17:45All the attacks, the vicious attacks on Fox News have to do with the fact that they're offering some kind of alternative political view of things. But I was really surprised to find a fairly common opinion among cultural critics of television that this developing lack of consensus is a real problem for America. I think it's the greatest thing that's happening. There are more and more networks, or in fact just more and more outlets. And of course, the internet is replacing television as people's source of news, as we well know. In other words, we're seeing a great decentralization. I feel if libertarians have any cause for hope, it is because of these developments in the media, these developments on the internet.

1:18:35We are seeing a profound decentralization. I mean, there have been so many political stories lately have been affected by the Internet where the standard party line, the establishment line has been ripped to shreds by the vigilance of the Internet. You know, it's obvious to me that these are good developments in all sorts of political ways, but also simply in creative ways. Here's my example of where competition is good, and the more sources of competition, the better. Yet there's been so, you know, we paid lip service to competition in this country, though it seems, you know, the only people that are brought up under antitrust laws are people who are competing successfully.

1:19:23And, you know, again, what I tried to show you this morning was the way the laws and the regulations of the FCC were basically designed to keep these three networks in place and make it very difficult for anyone to compete with them. It was Murdoch's brilliance that he figured out how to exploit that system to his advantage and make it more competitive. And, you know, in retrospect, everyone says, well, of course, Fox was going to succeed. Murdoch had all that money and so on. But I, you know, challenge anyone else to have done it, or even to do it now. You know, it's interesting, WB was headed by a fired Fox executive, and it did okay, but obviously not as well as Fox.

1:20:15And so you really do have to give Murdoch a lot of credit in this process. And again, I want to stress the creative aspect of it, that he was a risk taker, an entrepreneur, and he introduced that risk-taking element into his network. And so Fox experimented in so many different ways, and so we got this pattern again that I'm talking about in culture. Culture is a messy thing. You try out possibilities and then some succeed. I mean, you've got to have a way of weeding out the failures, you know, that's the great problem with central planning and socialism that it doesn't allow for enough failures.

1:21:01The great thing about free enterprise is not so much that it succeeds is that it allows for failures but then corrects for them and a free market can correct for failures quicker. You know, what I tried to show you about Fox is they moved quicker. If something was failing and they thought it was failing for real reasons, they dropped it more quickly than the other networks did. Now, again, that was balanced by the fact that they did have some faith in some of their programs and would continue them. And so the total picture now in television has changed. The pace of change is faster. the sources of change are increased this is what's released all these new possibilities now some of it obviously in cable the fact that you can use certain words on cable that you can't use on broadcast tv or that you can show nudity on cable yeah these these are commercial advantages for cable the networks are increasingly getting bitter about this and they're they're pushing the envelope

1:22:10I hope. I recall Janet Jackson pushing the envelope, for example. I predict within five to ten years we'll be seeing nudity on broadcast television or something pretty close. We've already begun to see men's backsides on network television. And so there probably will be changes in that. You know, that's an obvious example of which it helps to have new outlets, but again, when you look at the risk that Showtime and HBO are willing to take, you see why they're at the cutting edge now. I think of Seinfeld, the show which I love, Curb Your Enthusiasm, that's done by Larry David, who basically created and wrote Seinfeld.

1:23:00I like to call it Seinfeld without the censors. I think in that show we see what Larry David would have done if he hadn't had any constraints on him at a commercial network like NBC. So I see things opening up in television and in many ways television is the main thing people have in mind today when they complain about commercial culture. and they see it as debased and their numero uno evidence is on television and again as in any cultural form you can point to a lot of garbage on television but increasingly there are an awful lot of successes to point to. I give lectures like this and after everyone someone comes up and says have you seen It's Always Sunny in Philadelphia or have you seen 440?

1:23:55and I haven't seen that there's too much good stuff for any one person to watch, though I'm trying, but that's what happens when you let a market go, and again, in some ways this opening up has been driven by businessmen themselves, in some ways it's been a reluctant FCC realizing that its rules were now antiquated and that they were fighting battles that were from a generation earlier. If we're not in the golden age of television, we're now entering it, and I already see the serious academic treatment of television programs, the emergence of a canon of the great television programs, and DVDs have become an engine of canonization.

1:24:47The Deluxe Edition, we know which are the great shows from the past by the ones that are issued on DVD, and you can actually tell by what kind of issue it is, whether it's a selection of the episodes, that's pretty weak, all of the episodes, that's a sign of pretty good canonization. The Deluxe Edition, that shows you the show is really canonized. And so I, you know, just as in 1930 or 40 no one would have thought of, very few people were thinking of movies as a serious art form, to this day very few people are thinking of television as a serious art form, but I think it is and we're beginning to recognize that and television is one of the most powerful proofs of the power of commercial culture.

1:25:36So, I'll stop here and take the usual questions. Yes? What do you think about Fox News? You know, I think it was justified. Now, Fox did not treat fire, this is Joss Whedon's show, the sort of western sci-fi show he did. Fox wasn't good to it. They didn't show the original pilot. They showed the episodes out of order. They might have had more faith in it. They might have promoted it better. I honestly didn't think it was that good. I mean, I'm a great fan of Buffy and I liked Angel. I have to say I didn't think... I think it was very weak in casting.

1:26:26I think Ron Glass was the only really good guy in that show. Show. And I, to me, I never warmed up to the characters. I didn't like the movie either. So you know, I, but you raise a good question. Let's put aside the specifics of Firefly. You know, I loved Get a Life and they canceled that. And this does happen. I am not claiming that commercial TV is perfect. I'm not claiming that everything it puts on is good and everything it cancels is bad. It is messy. It cancels good stuff. It leaves on bad stuff. What I will say is I can't conceive an alternative way of doing it that would have better results, that if the answer to market failure here is that there had to be a government agency that Renews or Cancels shows. If that were so, you know, things would be far worse than they are.

1:27:27So, again, people demand perfection of the market, and if they don't get it, they say, we need government control or we need this or we need that response to market failure. I don't buy that. You're comparing systems with systems. And, you know, look at any other system and for producing television and we have alternates, nationalized television networks, their results don't even begin to compare in quality with what the market has produced. So again, I mean, I wept when the tick was canceled, the live action version of the tick. Now at least we now get it on DVD, but you know, I'm saying to myself, you know, why, why are they canceling my favorite show?

1:28:13But that's not a reason for canceling the whole system, because you don't want to see what the alternative is, though if you do, watch Romanian TV sometime. Yes? Several times this week you have mentioned this pyramid, saying a lot of garbage is basically paper. Could you comment more about in what sense that's true, or what is the actual relationship between the garbage and the paper? I'm sure there's a mixed metaphor here, but, you know, my basic point would be that only a shotgun technique works in culture, that you can't do precision shooting, that the only way to succeed in culture is to try out lots of things and see what works.

1:29:00And that inevitably produces far more failures than successes. That's the way all markets operate. If you look at the introduction of products and so on, you know, a hundred products fail for the one that succeeds, and it's the same, and television shows their products in that sense. But I'll take it a little further in that the failure is an educational experience. You learn from your failures. is most, very few people succeed with their first project in television and they will tell you how they learn from their failures and so what I'm getting at, again, the cultural model of most academics is akin to a socialist central planning model that you, we are so brilliant and so in command of the fact that we experts ought to be able to get it all together together to begin with and ahead of time and simply produce quality one time after another and know how to avoid failure.

1:30:02You know, what I'm saying is in fact that doesn't work and that you need a lot of garbage to produce something successful if for no other reason just that you just need a lot of garbage. But above what you therefore need is a feedback mechanism, that's what I'm saying, and markets provide feedback mechanisms. and I've suggested some of the ways in which feedback is built into the way television studios, television networks operate and, you know, Fox was more successful and in new ways because it developed new methods of feedback and so, I mean, that sounds better than my garbage dump pyramid image and maybe I shouldn't use that but I, you know, it just, it's so hard to get that across when people, you know, Monday morning quarterbacks, after they fact, yeah, they can tell you what succeeded and they think they can tell you why. Usually they don't even know that. But, you know, I would like some of these people to make predictions sometimes and then we'll hold

1:31:06them to like these really intelligent business professors who are completely wrong about Independence Day. Yes, Mark. You mentioned how technology led to improvements in commercial television. Have you considered the implications of TiVo technology and might it hurt commercial television?

1:31:44I don't really think it will survive the 21st century. Again, we get so naturalized. I mean, I can't tell you, for people my age, the three networks seem natural. You know, like Immanuel Kant would have shown why there are just three networks. There can't be two, there can't be four. Like the category is a pure reason. And so, you know, when I look at DVD and look at the Internet, and I can't imagine that there won't, I actually can't understand why already you can't decide any program that's ever been made, you want to watch it, you dial in and you pay a fee and there it is. I can't imagine that won't be the pattern eventually, I guess there are technical problems to that, but it is true when you listen to executives now, they are beginning to realize that their asset is their content, their library of programming, you know, Ted Turner when he made that brilliant move to buy, was it MGM's, yeah, MGM's package of movies, I mean again they're realizing

1:32:58Their assets aren't the broadcast slots and they aren't buildings, but their real asset is the movies, the programs, that they can package and repackage and sell them in this way. And so, yeah, I think TiVo's got to spell the beginning of the end of something, though. It's surprising. It hasn't had the dramatic effect that people thought it would. But still, yeah, I agree with you. I can't see how this commercial-based regime, that is not in the specific place of this ad, this selling commercial ads-based regime, will survive much longer. And obviously, it's, you know, with these subscription networks like HBO and Showtime.

1:33:44I mean, let me put it, I think within 10 years, the only place you'll be seeing ads is on public television. commercial free public television which begins every hour or five minutes of commercials to one bank or insurance company after another so yeah there's my prediction for you commercials will be restricted to public television yes I'm just wondering, in the sense of BXL, what other shows do you think are at the top of your list?

1:34:38I do think Seinfeld is one of the greatest shows of comedy. I think Cheers, the Dick Van Dyke show. I have my own personal canon, but it would take hours to unfold. But there's lots of them, and I've drawn up lists there. It's not quite as prolific as my list of the greatest movies. It's harder to do a TV show at a consistent level of quality. That's what amazes me about shows like The Simpsons and The X-Files. Certainly, I would add South Park. Let me not let this opportunity go by without praising the one truly libertarian show on television. One more question. Yes.

1:35:36In each country, in Europe or in America, is it enough for the commercial success for the UK?

1:36:06and then advertisers knew what to advertise on those shows. Fox created a whole series of shows that African Americans liked. They put the Waynes Brothers on and so on. And that wasn't because Rupert Murdoch is particularly liberal in his views, but because it was a commercial decision, but it had an excellent effect in giving a lot of African American talent a chance to appear on television. And again, it allowed advertisers to target certain products. So, this is one of the fundamental ways in which television has changed and I could see how it would have an impact on the varying success of American shows abroad, where they might pick up on target audiences that they don't have at home with the United States, but that's a very good point.

1:36:54I mean, one of the great advantages of anyone producing in the United States is that the United States market is so huge in itself. It virtually is self-contained, I mean, but, and you know, if you're producing television in Romania for the Romanian market, your possibilities are much more limited, there's just not that much money in Romania, but it is true that the American shows, American movies are now world-oriented, they absolutely crave the world audience, that's why movies have become The Great Era of World Movies was the silent era when the dialogue didn't matter, so you could show the same movie in any country.

1:37:41Most American blockbusters are essentially silent movies now. The dialogue doesn't matter, it doesn't care what someone says. The special effects are silent movies. They have the same virtue. You can sell a big special effects blockbuster all around the world. American television, as far as I can tell, is still completely oriented towards the American market. It may have unexpected consequences in foreign markets, and I suspect, at some point, American television will follow the route of American movies, and people will start to produce with a foreign market in mind.

1:38:27You know, you see a little bit of it, you know, the Simpsons, they know they're popular in Canada, so finally they gave them a sop, they did an episode in Canada. And I think that was done a bit with marketing and things of mine. But as yet, as far as I can tell, American television is still limited in its own horizons by America. But there's a very interesting point that it probably is having consequences abroad that Hollywood hasn't figured out yet. Yeah, I think we have to stop here, but we'll have one last session.