BOB GARFIELD: The airlines, as has been well reported, are seeing dramatic declines in passenger loads, so imagine if they were to now ask 80 percent of their customers to buy all their tickets many months in advance without guaranteeing a price break over last minute purchases. Crazy, no? Yet that's how network TV sells its ad time -- in an annual feeding frenzy going on right now called the upfront market. Advertising Age editor (and my boss in my other job) Scott Donaton joins me now to explain this madness. Scott welcome back to-- you know the-- this other thing I do.

SCOTT DONATON: Thank you, Bob! Glad to be back.

BOB GARFIELD: So correct me if I'm wrong -- the audience for network television has been steadily shrinking for the last 10 or 12 years, hasn't it?

SCOTT DONATON: The audience has been declining and yet the value of television has been mysteriously rising. [LAUGHTER]

BOB GARFIELD: And the ratings that are used to measure the audience to begin with are based on a methodology that is dubious at best, and many believe, don't they, that-- that audiences are fairly dramatically over-estimated by those ratings.

SCOTT DONATON: Most people in the, in the television business accept that the numbers used to measure audiences are probably fairly close to being made up, and yet it is the only measure they have, and it's the benchmark that people use, and it perpetuates a system of doing business that is probably about as outmoded as it can get.

BOB GARFIELD:And finally, the next ten years are likely so to redefine the media landscape that there may not even be a network television system as we know it. Is that right?

SCOTT DONATON: Well I think what technologies like TiVo are doing are basically making the end users --the viewers -- you and I -- are becoming the programmers for ourselves! And with all the digital cable systems being rolled out, these personal video recorders as control switch, it is going to basically effectively end the idea of a network because people will create customized programming for themselves, so how do you brand or present a network in that environment? You don't!

BOB GARFIELD:So with all that said, explain to me please why people aren't running in a panic away from network television instead of going and paying ever higher prices per thousand viewers to get on network TV.

SCOTT DONATON: The one word answer, Bob, is fear. This year something like 8 and a half billion dollars in, in advertising money will be committed to this one medium! And the people who are doing this should be committed! And they know it! [LAUGHTER] But nobody wants to be the first to move to try something else, because they're all afraid of being shut out of the old way of doing it, being forced to pay more money later for television advertising and having to explain that to their clients. And as for the TV sales guys, they're making tons of money off of a declining audience! They're raising their prices dramatically, even as the audience drops, so why in the world would they walk away from doing this kind of business? They wouldn't!

BOB GARFIELD:So instead of getting up in the morning - at least during um--upfront and saying how am I going to make any money today selling this clearly declining medium, they're not even having to sell - they're just taking orders.

SCOTT DONATON: They have managed to convince people that although network audiences are declining dramatically that it remains the most effective and the last major mass medium - and at a time when people are splintered all over the place - it is still, even with a smaller audience, almost more valuable, if you will, by being the only mass medium. Advertisers still have something of a blind faith that television works better than any other advertising medium and the network sales guys perpetuate that. By the way, to top this all off, the whole idea that this is a supply and demand marketplace is actually absurd because the networks themselves can decide whether to put a lot of their inventory out there to let advertisers buy or to hold a lot of it back hoping that the prices will rise later. So it's a false inventory; it's a false amount of supply and therefore it's a false demand that's generated!

BOB GARFIELD: What if they held an upfront and nobody came?

SCOTT DONATON:It just won't happen because this is an industry where people are so competitive, to the end, that they will almost never do something to advance their cause as an industry because if you say I'm not doing it -I'm not going to show up - your competitor says well if he's not coming, I am.

BOB GARFIELD:Will there be a point in a few years where there are now only, you know, say 15 to 20 people watching network television and the upfronts are held and they're selling spots to Proctor and Gamble and Anheuser-Busch and Coca-Cola and so forth for a billion dollars per viewer? I mean isn't that the trend line we're on?

SCOTT DONATON: There will come a time when network shares of audience drop below 30 or 20 percent -- when it will be such a dramatic decline and when media audiences will be so fragmented that advertisers will have no choice but to finally end the television bias that so many of them still have. But right now and for the foreseeable future advertisers continue to spend sometimes 70 or 80 percent of every ad dollar in television, and I don't see any sign that that's coming to an end despite the decline of that medium --not in the next 10 years.

BOB GARFIELD:One final question -- we are right now still in the teeth of an advertising media depression. What must the magazine publishers who have been sucking wind for the last 3 years, what must they think when they see all this cash pouring into network TV?

SCOTT DONATON: This is extremely frustrating to any other media -- radio - newspapers - magazines -billboards -- when they first saw that television was going to be strong through this recession I think they thought it was an indicator that everybody would be. And then they realized, wait a minute, the overall budgets aren't being increased, and therefore if an advertiser spends more on television, they're spending less in my magazine, and this is not a good thing.

BOB GARFIELD:All right Scott. Well, as always, thank you very much and while I have you on the line just want to tell you my column will probably be late this week.

SCOTT DONATON: Wonderful, Bob! Thanks for having me.

BOB GARFIELD: [LAUGHS] Okay, Scott Donaton is the editor of Advertising Age. Coming up, we check in with the new dean of America's pre-eminent school of journalism and check out a new controversy over one of journalism's old mysteries. This is On the Media from NPR.