Kinga Tompos, a graduate student at DePaul University, said she did not believe the news when she first heard it in the student center. But when she found out it was true, she was ecstatic.
"Sanjaya is gone," she said. "Finally. I can't stand him."
Sanjaya, of course, is Sanjaya Malakar, by wide consensus the worst contestant ever to get into the final rounds of American Idol. And for those of you (like me), who never really got interested in the reality TV fad, American Idol is a singing contest that runs on the Fox TV channel. It also happens to be the most popular show on television in the US.
I really wouldn't know this except that Tompos is our baby sitter and does not have a VCR. So we record American Idol episodes for her at our house, which has introduced me to Sanjaya and his friends. I will admit the show is fun -- not least because guest stars often appear on the show and proceed to sing in comically horrible fashion.
Yet I can seldom get past the question of how we got here -- how the US lost interest in scripted shows and came to embrace all manner of reality television and its who-sang-what-song, who-ate-what-bug ethos.
Some say it's just that people now lack the attention span for old-style TV or that our tastes have changed.
Most insiders point out that reality shows cost much less to make than scripted shows, and, they argue, this is just a profit enhancing play by the broadcast networks.
But that does not explain why reality shows did not take over television long ago -- why, back in the day, Star Search never became American Idol. Surely the broadcast networks wanted to save money back then, too.
In his book Switching Channels, Richard Caves, the don of entertainment economics and professor emeritus at Harvard, blames (or credits, depending how old you are) cable and satellite providers and the way they have changed the broadcast networks' incentives to invest in programming.
He points out that such incentives depend on the size of the potential market. The programming is a fixed cost -- networks pay for the programs even if nobody watches. If paying an extra US$1 million to get a star onto a show, for example, raises every customer's love of the show by the equivalent of US$1, the investment more than pays off if there are 10 million potential viewers. But the US$1 million investment would be a terrible flop if there were only 10,000 potential viewers.
You can see the mechanism at work in a comparison of the cable networks. The number of subscribers for a given channel (that is, the households who have that channel available on their system) gives a clear indication of a network's maximum potential market. And the bigger the market, the more a cable network spends on programs.
Not even counting sports juggernauts like ESPN (whose annual expenses on programming top US$3 billion), industry analysts say that the average programming costs at networks with more than 90 million subscribers -- networks like Discovery, Nickelodeon or MTV -- average more than US$250 million a year.
Networks like Bloomberg, Nicktoons and National Geographic, with 40 million to 50 million subscribers, average less than US$35 million in annual programming costs.
Fledgling networks with 20 million to 25 million subscribers, like Boomerang, the Sleuth Channel or the Anime Network, average only about US$12 million.
Spending on programming is not linear in the sense that doubling the potential viewer market more than doubles the amount that networks spend on their shows.
With the big shift to cable and satellite television (we now watch more cable than broadcast programs), cable networks have had a big incentive to upgrade their product, while the incentive for broadcast networks has moved in the opposite direction.
So the increase in reality programming is not just a matter of broadcasters wanting to save money. It's that a shrinking potential market gives the networks less incentive to spend money. They can't recoup it with enough viewers.
Nor is the shift to cable and satellite complete. It continues.
And now, more and more people are also turning to the Internet and YouTube instead of broadcast television. So you can see how this ends.
You may be like Kinga Tompos, calling in and voting to give Sanjaya the boot. But remember the economist's dictum: You don't know what something costs until you have seen the alternative. Celebrate Sanjaya's demise all you want. But just wait until you see what's next.
Austan Goolsbee is a professor of economics at the University of Chicago's Graduate School of Business and a research fellow at the American Bar Foundation.
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