by Joseph Miller, Esq.
Two reports released last week–African-American Consumers: Still Vital, Still Growing by Nielsen and Basic Cable Network Segmentation Toward Minorities and Other Niche Audiences in a Digital World: Preliminary Results of an Empirical Study of Cable Advertising by Haizhen Lin, David Waterman, and Sung Wook Ji–shed light on the effect of “market segmentation” on minority oriented cable network programming. The media industry as a whole has been trending toward market segmentation for some time, as the growth of cable programming, as well as the increased capabilities of internet and digital platforms, have facilitated hyper-targeted advertising models. This trend, however, has resulted in the cannibalization of black-oriented cable networks owned by media conglomerates that also own mass appeal cable outlets.
During the 1970s, when the cable industry was still in its infancy, many policy makers and others lauded the potential of cable to increase minority-oriented programming: In 1973, Black Enterprise predicted that cable would be the final opportunity for minorities to acquire a stake in the media industry. Nevertheless, according to Lin, Waterman and Ji, of the three cable networks specifically targeting African-Americans, only one–Viacom-owned BET–consistently features a high number of African-American viewers overall and delivers a large number of African-American viewers to advertisers for each advertising buy. The other two networks–Centric (also owned by Viacom) and TV One (owned by Radio One and NBCUniversal)–have predominantly black audiences, but have not been as successful as BET at delivering a consistently high number of African-American viewers for each buy.
According to the Nielsen report “[t]he most popular programming in African-American households are those starring Black characters, sports, variety shows with diverse contestants, and award shows.” As such, American Idol Audition Special; New Year’s Rockin’ Eve, Part 1; The Game, Season 5; Let it Shine; and Whitney Houston: Her Life were the top 5 programs most watched by African Americans age 2+, total day, between 12/26/11 and 6/24/12. In primetime, seven of the top 10 prime time shows watched by African-Americans ages 18-49 were broadcast on either VH1 or BET. Of those seven, only 2–The Game, Season 5 (at number 1) and Let’s Stay Together, Season 2 (at number 6) were shown on BET:
- The Game, Season 5 (BET)
- Love and Hip Hop, Season 2 (VH1)
- Basketball Wives, Season 4 (VH1)
- Single Ladies, Season 2 (VH1)
- T.I. and Tiny (VH1)
- Let’s Stay Together, Season 2 (BET)
- Whitney Houston: Her Life (CNN)
- La La’s Full Court Life, Season 2 (VH1)
- Scandal (ABC)
- Braxton Family Values (WE: Women’s Entertainment)
Super Bowl XLVI was the highest rated sports show watched by African-Americans age 2+, with 12.47 million African-Americans tuning in. Further, Lin, Waterman and Ji also report, using Nielsen data, that NBA-TV, SOAPnet, VH1, Fuse, Lifetime Movies, Nick Toons, and Oxygen Media –all mass appeal networks–rounded out the top 10 cable networks watched by African-Americans.
This data suggests that competitive pressures from mass appeal media outlets that have successfully converted African-American viewers by offering better produced programming than BET, Centric and TV One have led Viacom’s VH1 to “cannibalize” BET and Centric to keep VH1 competitive against mass appeal competitors. “Cannibalize” is a marketing term describing the scenario in which one or more of a corporation’s subsidiaries eat away at the profits of one or more of the corporation’s other subsidiaries. Shows featuring Black characters have been a sweet spot for BET for some time. Further, as described above, BET has in some cases delivered African-American viewers to advertisers as efficiently as “mass appeal” networks. But Lin, et al. also showed, not surprisingly, that African-Americans were much more likely to watch mass appeal targeted networks, than whites were to watch networks targeting African-Americans and Latinos. Lin et al. also concluded that “[w]hile content itself appears to have significant effects on black and Hispanic audiences, production investments appears [sic] to be a substantial, common influence on all racial and ethnic groups.” In other words, no viewer–irrespective of their race or ethnicity–wants to watch television shows that are poorly produced.
Accordingly, it may be argued that Viacom is incentivized to: 1) place the most popular shows featuring African-American characters on VH1, rather than BET and Centric, ostensibly to garner a more racially and ethnically diverse audience in prime time, and; 2) disproportionately allocate production resources toward its mass appeal networks.
In addition to studying the consequences of having an increasingly mass appeal cultural frame shaping our perceptions, policy makers should consider the communications policy implications of cannibalization. Specifically, cannibalization seems to be a symptom of excessive concentration of media ownership. The FCC should investigate the extent to which the shifting of production resources away from minority-oriented networks toward mass appeal networks is a problem that disproportionately harms potential owners, minority audiences, and employees, such as advertising salespeople, whose compensation is tied to the profitability of cannibalized networks. The effect of cannibalization on employee performance would be especially enlightening if the assumption that a higher proportion of people of color work at cannibalized networks is proven correct.