Tune In TV's Comeback

Analysts at Sanford Bernstein Research point out that the merger boom has left networks with fewer customers, reduced market-share battles, cut ad-buying costs and boosted broadband Internet penetration. That's why ad spending growth has slacked off. The 20 largest advertisers only increased their spending by 2.5% a year in the past five years.

What's more, media research firm Magna Global reports that the penetration of digital video recorders -- including both TiVos and the generic ones embedded in Comcast cable boxes -- reached 10.4% of all U.S. households at the end of 2005, double the previous year.

By the end of this year, the researchers say, penetration will grow another 50% to nearly 16% of U.S. households. According to their report, the most-recorded broadcast shows last season were Scrubs, Amazing Race, Apprentice and Survivor. Three were reality shows. For the most part, hot dramas such as CSI at CBS and Lost at ABC are witnessed live.

Bernstein analysts point out that one factor that has prevented sharp price erosion in both ad cost per thousand viewers and DVD sales is that the networks essentially operate as a four-player cartel.

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