Popularity of American television shows in global markets

¶ … American television industry is the largest in the world, and exports its product to nearly every country. Programs and characters have become global icons -- consider the just-rescued Chilean miner who was nicknamed "Dr. House" as an example of the worldwide popularity of American television. There are a number of reasons why American television has become so popular, especially in recent years. These include the size and diversity of the industry, the emergence of cable and satellite in overseas markets and the emergence of global media as a promotional tool.

In most parts of the world, television has been a relatively local affair. Government protection, linguistic and cultural barriers and a limited number of broadcasters all worked to prevent the globalization of television entertainment. In recent years, however, several critical shifts have opened up the world's television markets, and the American TV industry has moved aggressively to capture market share around the world.

New technologies have resulted in a proliferation of cable and satellite services around the world. Nations that once had only a handful of television stations now have dozens or even hundreds. This creates demand for programming. As cable and satellite in particular have relatively low viewership, the advertising revenue from most channels is insufficient to finance proprietary programming. This means that programming must be purchased, creating demand for foreign programming. Stations will then seek out programming most attractive to its audience. There are a number of criteria that guide such decisions including language, production quality and the brand name of the program in question. In most cases, American programming is well-positioned.

In particular, American television benefits from the size and scope of the industry, which is the world's most developed. Budgets for American programs are high, which increases the production value of programs. In addition, production values are higher because of the extensive experience that the U.S. TV industry has in production, dating back to the beginning of television. The U.S. was one of the earliest adopters of cable and satellite technology for television, which increased the amount of programs made in the U.S. beginning in the 1980s. This has given the industry substantial experience that allows it to produce higher quality television shows than many nations, allowing these programs to be more attractive to foreign buyers. In addition, this level of experience and financing attracts the best talent from around the world. The U.S. television industry is highly integrated with the Canadian industry for example, and the star of House is English. The ability to attract talent from around the world also serves to increase the production value and attractiveness of U.S. programming.

The sheer volume of productions also means that the United States has a wide variety of programming to sell to the world. Foreign buyers can choose between dozens of different types of shows, and hundreds of shows. Many of these programs are owned and marketed by major media companies as well. These studios have a global marketing reach, cultivated over the years out of necessity. As the U.S. market began to produce more programs, its studios began to seek out export markets for the product, in order to increase the profit margins associated with these shows. A program, for example, may only break even in the U.S. But with 50 export countries the show can ultimately be very profitable nevertheless. As a result, American television production companies have become aggressive in the export markets. For example, NBC Universal now licenses the aforementioned House to 250 territories around the world (Adler, 2008).

In 1989, Hoskins et al. identified that American production companies were selling their shows around the world at very low prices relative to their production value. Indeed, U.S. studios have as a business model the use of the world market to finance programs. This allows them to spread the costs of producing high quality shows around dozens of countries, such that each country can receive the show more cheaply than it would cost to produce a program of comparable quality domestically. The author of that article make a moral judgment on the fairness of this practice, but the idea is entirely rooted in intelligent economic theory. The U.S. television industry is able to produce better programming for less per viewer, specifically because it cultivates these economies of scale. By producing with an audience of hundreds of millions in mind, the U.S. television industry is seeking those economies of scale as a source of competitive advantage. Today, most such programs are produced by media conglomerates that can offset the initial production cost of a new program with profits from other, established revenue streams. This allows them to take more risks with respect to research and development, resulting in more and better programs. When those programs get to market, they are not only more attractive, but the economies of scale in production mean that they are more competitively priced than shows produced elsewhere.

In recent years, American television stations have become exported around the world as well. Time Warner, Fox and other broadcasters now have foreign subsidiaries, and bring U.S. programs to those countries to help fill out the schedule. This builds the appeal of U.S. programming in foreign markets.

The wide variety of American television programs also allows for its broad appeal, both internationally and domestically. The U.S. television market is highly specialized, meaning that there is, so to speak, something for everyone. Almost all consumer markets are targeted, and this allows the industry to market specific types of programs abroad where there is significant demographic and psychographic fit, while keeping some programs in the domestic market. Many of the shows that succeed around the world are the same ones that are the most successful domestically. These programs are often centered on broad human themes to which global audiences can relate. As foreign audiences become increasingly Westernized as the result of economic expansion, they become increasingly able to relate to these programs. Most programs are also tested in the sophisticated domestic audience, with only the most successful being targeted for export. The decades of experience that American audiences have with the hundred-plus channel universe may not make for more sophisticated consumers, but it makes for a more sophisticated market where producers are able to establish quickly those programs that have broad appeal. This shortens the time it takes for a program to be taken to export markets and it increases the odds of success in those markets.