In the 1950s and ‘60s, there were three television networks: ABC, CBS, and NBC. In the 1970s, Fox became the fourth network and changed the way in which the first three networks approached their business. There was more competition.
During that whole period of time—the 1960s to the 1970s– there was a certain kind of programmatic approach to content production. The networks saw what content worked and wanted to replicate it in everything they created. That was their product.
For example, they had a certain story to tell. They would cast a couple of stars and add a few particulars. They wanted to see the exact same story week after week, so audiences knew exactly what to expect when they tune in the next week.
Moving into the 1970s, content production fell under the auspices of the financial and syndication rule, where individual studios and individual producers were able to own their own product. There was an array of product that was available. But there wasn’t a tremendous amount of competition. Only certain buyers from the four networks were seeking out content.
In 1993, the financial and syndication rule was withdrawn. Networks were able to create and own their own product. Over the next few years, the networks started acquiring or creating production companies where they could then produce their own product. The networks understood that if they were producing the content, they would then not have to pay an independent producer for their creative efforts.
It was far more financially lucrative for the networks to be able to create their own production companies. They’d be able to keep the all money in the same loop, robbing the right pocket and putting it in the left pocket.
