Programming for broadcast and  subscription video service differs, as illustrated in figure 1. Sources of Broadcast and Cable Television Programming Have Changed Little in the Last Decade

		Major Broadcasters and Their Affiliated Studios Have Produced the Majority of Broadcast Prime Time Programming

Major broadcasters and their affiliated studios have produced the majority  of broadcast prime time programming in each of the selected years that we  analyzed. In particular, major broadcaster-affiliated studios produced from  76 to 84 percent of broadcast prime time programming hours, with the  remaining hours coming from independent producers. Numerous Companies Own Cable Networks, but Major Broadcasters and Their Affiliated Companies Have Continued to Own about Half of the Most Widely Distributed Cable Networks

Since basic cable networks are also a source of television programming,  we analyzed the ownership of those networks as an indicator of which  entities control the television programming on the networks. Combining ownership in both prime time broadcast programming and  widely distributed basic cable networks, the major broadcasters have had  an interest in a significant share of television programming over the last  decade. Cable operators without a major  broadcaster affiliation are not a source of prime time broadcast network  programming, and over the last decade their interest in the top 20 most  widely distributed basic cable networks has decreased. FCC annually reports on cable network programming variety and  ownership as part of its video competition report, but the report does not  assess the extent to which the sources of programming affect variety in  television and selection choices for the public. Stakeholders Cited Economic Factors, Technical Issues, and Legal Conditions as Affecting the Availability of Independent Television Programming

		In Broadcast Television, Economic Factors Influence the Availability of Independent Programming

Industry stakeholders we interviewed stated that the high cost of  developing, producing, and distributing television programs is a significant  factor that affects the availability of independent programming in  broadcast television. According to television broadcast executives and  representatives of independent producers, developing and producing  broadcast television programs is costly and financially risky. However, representatives of independent producers stressed that it is  difficult for them to obtain financing for development and production  costs, and oftentimes they must secure financing through the major  broadcaster-affiliated studios. Representatives of independent  networks we contacted and a study we reviewed indicated that a new  network usually faces considerable uncertainty as to whether it will be  distributed by a sufficient number of video providers to make its  operations viable. By contrast, cable networks developed by cable operators, major  broadcasters, or other media companies are generally more able to finance  the development of affiliated networks over new independent networks. Basic cable networks that are affiliated with cable operators,  major broadcasters, or other media companies can negotiate carriage of  an affiliated cable network as part of an agreement for carriage of an  established affiliated network. Local Interests Also Affect Programming Decisions in Both Commercial and Public Radio Stations

Stakeholders stated that in both commercial and public radio,  programming decisions such as selection of format and music playlists are  based on the interests of listeners in a given market. We found that within selected individual markets, the top radio formats  differ from the top radio formats nationally, indicating that programming  decisions are locally based on the preferences and interests of listeners  within a given market. 8). Opinions Vary on How Consolidation in the Radio Industry Has Affected Programming Decisions

Stakeholders that we interviewed generally agreed that since 1996, the  number of stations owned by a single radio station owner has increased;  however, viewpoints varied about the extent to which consolidation has  affected programming decisions. Agency Comments

We provided a draft of this report to FCC for official review and comment. FCC provided technical comments that we incorporated where  appropriate. To determine the factors and conditions that stakeholders identified as  affecting the availability of independent programming in television and  factors that influence radio programming decisions, we interviewed or  obtained written comments from a variety of experts and industry  stakeholders, including academics, industry representatives, media  companies, and public interest groups (as shown in table 4) to obtain their  views on the factors that affect the availability of independent  programming in television and radio.
Why GAO Did This Study

The media industry plays a vital role in informing and entertaining the public. Media ownership and the availability of diverse programming have been a long-standing concern of Congress. Despite numerous programming choices in television and radio available to the public, some studies have reported that independently produced programming--that is, programming not affiliated with broadcast networks or cable operators--has decreased through the years. This requested report discusses (1) the extent to which the sources of television programming have changed over the last decade, (2) the factors industry stakeholders identified as affecting the availability of independent television programming, and (3) the factors industry stakeholders identified as influencing programming decisions in radio. To address these issues, GAO analyzed data from the Federal Communications Commission (FCC) and industry on sources of broadcast television programming in prime time (weeknights generally from 8:00 p.m. to 11:00 p.m.) and companies owning cable networks, as well as radio format data to determine programming variety. GAO also reviewed legal, agency, and industry documents and interviewed industry stakeholders, public interest groups, and others. GAO provided FCC with a draft of this report for comment. In response, FCC provided technical comments that we incorporated where appropriate.

What GAO Found

The sources of broadcast and basic cable television programming have changed little in recent years. As a source of programming for prime time television, major broadcasters (ABC, CBS, Fox, and NBC) and their affiliated studios produced the majority of programming in each of the selected years that GAO analyzed. In particular, GAO found major broadcasters produced about 76 to 84 percent of prime time programming hours. The remaining programming came from independent producers, which are not affiliated with the major broadcasters. Since basic cable networks are also a source of television programming, GAO analyzed the ownership of those networks as an indicator of which entities control the television programming. On the basis of GAO analysis of ownership in the 20 most widely distributed basic cable networks, major broadcasters and companies affiliated with both major broadcasters and cable operators have owned half or more of the top 20 cable networks for each year reviewed. Combining ownership in both prime time programming and basic cable networks, the major broadcasters have controlled a significant share of television programming over the last decade. Stakeholders primarily cited economic factors as influencing the availability of independent television programming. In this regard, producers GAO contacted stated that developing and producing broadcast television programs is costly and financially risky. And while funds need to be secured early on in the development and production process to finance these costs, independent producers stressed that it is difficult to obtain financing for production costs. For cable television (viewed through a subscription video service), representatives of independent cable networks said a new network faces considerable uncertainty as to whether it will be distributed by a sufficient number of video providers (such as Comcast and DirecTV) to make its operations viable. By contrast, cable networks developed by cable operators or major broadcasters are able to negotiate distribution of the network with video providers as part of an agreement for distribution of an established affiliated network. For radio, stakeholders cited economic factors, local community interests, and consolidation in the radio industry as influences on programming decisions. Among both commercial and public radio stations, stakeholders said that programming decisions are based on listeners' interests in a given market. GAO found that within two of the three largest local markets nationwide, many of the most common local radio formats differ from the most common radio formats nationally, indicating that programming decisions are affected by local community interests. Over the last 10 years there has been consolidation in the radio industry; however, stakeholders' opinions varied about the extent to which consolidation has affected programming decisions. While some studies show that consolidation has led to homogenized radio playlists in different markets nationwide, GAO's analysis shows diverse formats and preferences are reflected within individual local markets.