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See also Deficit Financing
The network had taken advantages over the deficit financing practice, especially by demanding production companies and studios a percentage of syndication revenues. An intervening efforts from the US government begain at the beginning of the 70s, which is known as Fin-Syn Rules.
In September of 1971, the FCC mandated fin-syn rules, which results in the golden era of independent production. The networks were eliminated from the syndication revenue.
e.g., MTM Enterprises, Norman Lear's Tandem Productions
It lasted to the mid-1990s. In 1991, the FCC began to erode the rules and eliminated them by 1995.
The period (fin-syn rules) created vibrant and competitive environment for the many independent studios. The period also forced conglomeration of media companies. Many media companies such as Disney, Viacom, News Corp, Time Warnet, etc. bought studios. And as rules began to be eliminated, the networks started to run TV shows and products from their conglomerated studio -- i.e., from the common ownership, which was characterized with vertical integration.
Abuses (from the common ownership) existed and exercised. But, it did not eliminate'' competition and vibrant environment among the studios and networks. Because networks and studios even under the common ownership''', were evaluated separately; hence, studios would not give up the higher revenue. Also, actors and actress would not put up with such syndicated exchange of products among the studios and networks (see David Duchovny vs. Fox case).
In September of 1971, the FCC mandated fin-syn rules, which results in the golden era of independent production. The networks were eliminated from the syndication revenue.
e.g., MTM Enterprises, Norman Lear's Tandem Productions
It lasted to the mid-1990s. In 1991, the FCC began to erode the rules and eliminated them by 1995.
The period (fin-syn rules) created vibrant and competitive environment for the many independent studios. The period also forced conglomeration of media companies. Many media companies such as Disney, Viacom, News Corp, Time Warnet, etc. bought studios. And as rules began to be eliminated, the networks started to run TV shows and products from their conglomerated studio -- i.e., from the common ownership, which was characterized with vertical integration.
Abuses (from the common ownership) existed and exercised. But, it did not eliminate'' competition and vibrant environment among the studios and networks. Because networks and studios even under the common ownership''', were evaluated separately; hence, studios would not give up the higher revenue. Also, actors and actress would not put up with such syndicated exchange of products among the studios and networks (see David Duchovny vs. Fox case).
Affordable negotiation among studios and networks
Networks were pressured to run fewer reruns to keep viewers' attention -- more programs with less audience. Unscripted reality programming arises. But, such programming was not sold well in syndication. Hence, different financing methods emerged such as cost plus system developed in Britain.
The system dealt with uncertainty of distribution in the post-network era according to Lotz (2007).
Lotz stats By 2004 deficit financing was dead. The erosion of deficit financing as a dominant model involves a significant adjustment in the economics of the industry and perhaps may point to a nascent post-network era norm (2007).
Networks were pressured to run fewer reruns to keep viewers' attention -- more programs with less audience. Unscripted reality programming arises. But, such programming was not sold well in syndication. Hence, different financing methods emerged such as cost plus system developed in Britain.
The system dealt with uncertainty of distribution in the post-network era according to Lotz (2007).
Lotz stats By 2004 deficit financing was dead. The erosion of deficit financing as a dominant model involves a significant adjustment in the economics of the industry and perhaps may point to a nascent post-network era norm (2007).
