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Yet if the network business is thriving, it is as a radically different sort of business. The line between distributors (the networks) and suppliers (outside producers) is being blurred. The networks, given the chance to produce and own their shows, are acting more like studios, while the studios, afraid of being squeezed out, are trying to become networks. Just how this will affect what viewers see on their home screens is hard to predict. The advent of new competitors could foster more diversity and innovation. But with everyone aiming for the same audience -- those inescapable young-adult demographics -- the result could be just more of the same old thing. "The good news is that there will be a lot more stuff to see," says Christopher Dixon, a media analyst at PaineWebber. "The bad news is that it may not be very good."
The model for this changing network landscape is Fox, the fourth network, started by media baron Rupert Murdoch in 1986. With its methodical, one-night- at-a-time pursuit of the Big Three, Fox was a tough competitor because it played by different rules. Even though it now programs 15 hours of prime time a week -- one FCC benchmark for what constitutes a network -- Fox has managed to avoid the commission restrictions on program ownership and syndication that govern the Big Three. This annoys the other networks, which argue that Fox receives an unfair competitive advantage from Washington while it escapes such public-interest obligations as maintaining a news division.
The networks' attitude toward Murdoch did not improve in May, when he enticed 12 stations owned by New World Communications Group to switch their affiliation to Fox. The bad blood came to a full boil a month ago, after NBC went to the FCC to accuse Fox of trying to improperly acquire six more stations and thus exceed the limit on the number a company may own. NBC also asked the commission to investigate whether Fox is violating the 25% limit on foreign ownership of a U.S. broadcast station. (Fox is owned by Murdoch's News Corp., an Australian company, but Fox claims it is effectively controlled by Murdoch himself, who is an American citizen.) Just how high the stakes are in the battle was made clear by the jugular quality of Murdoch's response. Denying that his network violates the foreign-ownership rules, he fired back with charges that General Electric, NBC's corporate parent, should be stripped of its station licenses, alleging "a pattern of illegal activity." "Two can play at this game," said Murdoch. "If they want a brawl, they can have one."
Warner and Paramount, the two newest entrants in the network derby, see Fox not as a nemesis but as a network to emulate. Just as Fox did at the outset, each has cobbled together a lineup of affiliates composed largely of independent uhf stations. Like Fox, each is starting modestly, with one or two nights of programming, and plans to expand gradually to additional nights. Moreover, both are trying to reach the same audience that Fox has made its specialty: teens and young adults, particularly males.