December 2012

Cliffhangers may have been around for more than a thousand years — since at least the composition of “One Thousand and One Nights” — but no one has monetized them as brilliantly as cable networks.

In order to get paid, Charles Dickens had to sell the next chapter of his serialized novels; in order to sell advertising, ABC had to order more episodes of its hit show “Lost.” But for the next several months, AMC is converting our eagerness to see “Breaking Bad” into millions of dollars without showing a single new episode. Cable TV has developed one of the most clever business models in our modern economy. Until recently, AMC was a basic-cable backwater known for “Three Stooges” marathons. But a few years ago, it tweaked its business and began offering two or three hours of original programming on a few dozen nights a year. Starting with “Mad Men” in 2007, the network landed hit shows that developed small but obsessive followings. Soon after, it began making larger financial demands of the cable and satellite providers, like Comcast and DirectTV, that carry the network. AMC now charges these providers about 40 cents a month for each subscriber, including the millions who will never watch “Mad Men” or “Breaking Bad.” These providers can refuse to pay up, but doing so would infuriate legions of vocal viewers. AMC collects $30 million a month in fees alone on a base of 80 million subscribers, which is pretty good considering that the last episode of “Breaking Bad” had fewer than three million viewers. This business model, perhaps as much as artistic creativity, is responsible for TV’s current golden age.

The latest Facebook privacy policy changes are up for a vote Dec 4, including whether or not to continue to allow Facebook users to vote on new proposals. The social network announced proposed changes to its Statement of Rights and Responsibilities and its data use policy late last month.

In an explanation of the changes, Facebook said that it would like to change how it shares anonymous user information with its affiliates. Part of the reason for this change, the company explained, is to deal with its recent acquisition of the photo-sharing site, Instagram. “This provision covers Instagram and allows us to store Instagram’s server logs and administrative records in a way that is more efficient than maintaining totally separate storage systems,” according to a company blog post. “We’ve added additional language to this proposal to clarify that the sharing of information among our affiliates is and will be done in compliance with all applicable laws, and where additional consent of our users is required, we will obtain it.” Other changes include adding language to clarify the difference between privacy settings and timeline visibility settings and updating the advertising policies to make it clear that user posts can be used in ads for political or religious views.

Sinclair Broadcast Group said that it closed on a number of deals to acquire and sell television stations nationwide.

The roughly $459.7 million in acquisitions adds two new markets for the company and additional stations in four markets where Sinclair already has a presence. Sinclair purchased seven stations from Newport Television. These include the following: WKRC in Cincinnati, Ohio; WOAI in San Antonio, Texas; WHP in Harrisburg, Pennsylvania; WPMI and WJTC in Mobile, Alabama; KSAS in Wichita, Kansas, and WHAM in Rochester, New York. The company also acquired Newport's rights under the local marketing agreements with WLYH in Harrisburg, Pennsylvania, and KMTW in Wichita, Kansas, as well as options to acquire the license assets. Sinclair also acquired WTTA in Tampa, Florida, which was previously operated by Sinclair as part of a local marketing agreement. It also purchased KBTV in Beaumont, Texas, which was previously owned by Nexstar Broadcasting. Sinclair also said that it closed on deals to sell its assets to Deerfield Media Inc. at KMYS in San Antonio and WSTR in Cincinnati, WPMI and WJTC in the Mobile market and KBTV in Beaumont. Sinclair will provide sales and other non-programming services to each of these five stations under shared services and joint sales agreements.

The Motion Picture Association of America released a study of the New York State Film Production tax credit and concluded that it generated $6.9 billion in economic spending and supported 28,900 jobs across all industries. The tax credit has been in effect since November 2004, and the MPAA study found that since then, spending in the state by producers has grown from $600 million in 2004 to $1.5 billion in 2001, up 155%.