Distribution
At the dawn of the American TV industry, each company was only allowed to own a total of five television stations around the country. As such, when the networks launched their television operations, they found it more advantageous to put their five owned-and-operated stations in large media markets that had more households on the belief that it would result in higher revenue. In other markets, they opted to run their programming on stations through contractual arrangements, making them affiliates instead.
The five-station limit posed a problem for the DuMont Television Network, the first attempt at a "fourth" television network. Paramount Pictures owned a share of the network, and also owned KTLA in Los Angeles and WBKB (now WBBM-TV) in Chicago. Even though DuMont's programming was broadcast on other stations in those cities, the FCC considered Paramount's stations to be DuMont O&Os and thus forbade it from acquiring any more stations. This was one of the factors leading to DuMont's shutdown in 1955.
For much of the era from 1958 to 1986, the major network-owned stations were distributed as followed: ABC, CBS, and NBC each owned stations in the top three markets (New York City, Los Angeles and Chicago). Between 1958 and 1965, fourth-ranked Philadelphia housed CBS-owned WCAU-TV and NBC-owned WRCV-TV, a station which NBC acquired two years earlier through a trade with Westinghouse Broadcasting in return for NBC's stations in Cleveland. The FCC reversed the trade in 1965 and NBC regained control of the Cleveland station, which is today known as WKYC. Each network owned stations in other markets where the other networks did not: in addition to Cleveland, these were ABC's KGO-TV in San Francisco and WXYZ-TV in Detroit, NBC's WRC-TV in Washington, D.C., and CBS' KMOX-TV in St. Louis.
A company can now own any number of TV stations with a combined market reach of less than 39% of the country, but cannot own two of the four highest-rated stations in any market. Still, O&Os in the United States are primarily found in large markets such as New York City, Los Angeles and Chicago, among others. Despite that, network-owned stations can still be found in smaller markets (for example, KFSN-TV/Fresno, California is an ABC O&O, while KTBC/Austin, Texas is a Fox O&O; while WOGX/Ocala, Florida, is technically a Fox O&O, it is operated out of the studios of and serves as a semi-satellite of the network's Orlando O&O WOFL).
The FCC currently applies a discount to UHF stations, only counting half of the station's market reach when applied to ownership caps. This has allowed Fox, CBS, and especially Ion Television to own stations that cover more of the country then they would without this UHF discount. After the 2009 transition from analog to digital television, the big four networks lost this UHF discount, although the ownership of their existing stations was grandfathered in (still, some privately owned companies whose stations do not serve as O&Os of a network, such as Sinclair Broadcast Group, continue to use the UHF discount to own a large number of stations that would normally put them over the 39% market reach cap despite most stations now operating physically on the UHF band since the digital transition).
Read more about this topic: Owned-and-operated Television Stations In The United States
Famous quotes containing the word distribution:
“The question for the country now is how to secure a more equal distribution of property among the people. There can be no republican institutions with vast masses of property permanently in a few hands, and large masses of voters without property.... Let no man get by inheritance, or by will, more than will produce at four per cent interest an income ... of fifteen thousand dollars] per year, or an estate of five hundred thousand dollars.”
—Rutherford Birchard Hayes (1822–1893)
“In this distribution of functions, the scholar is the delegated intellect. In the right state, he is, Man Thinking. In the degenerate state, when the victim of society, he tends to become a mere thinker, or, still worse, the parrot of other men’s thinking.”
—Ralph Waldo Emerson (1803–1882)
“Classical and romantic: private language of a family quarrel, a dead dispute over the distribution of emphasis between man and nature.”
—Cyril Connolly (1903–1974)