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Wednesday, August 14, 2013

Are Networks DOA?




The chart above covers the history of time up to 2008. The trend has continued down, with the exception of sporting events, since.

Network ratings declining in big ways over the past year, over the past decade. The result has been an odd combination of low cost reality programming, news magazines and high priced dramas and situation comedies.  

the very presence of an increased universe of competition, alternative ways to watch programs, gaming and a health trend toward more active lifestyles have all taken their toll. 

Reports from the Up Fronts for the fall television season show a song and dance by networks to draw attention and proclaim they are not dead or dying.

The following is from AC Nielson ratings:


After thirty three weeks of the 2012-2013 broadcast television season (through Sunday, May 12, 2013), CBS is in first place among adults 18-49, with a 2.9 rating average, down 3 percent from last season.  FOX  was second, with a 2.5 rating average, down 22% from last season. NBC was third with a 2.4, down 4% from last season. ABC was fourth with a 2.2, down 12% from last season. The CW finished 5th among English networks with a 0.7 adults 18-49 rating average, down 13% from the previous season.
Among  total viewers, CBS is ahead for the season  averaging 11.917 million viewers. ABC is second with 7.818m, followed by FOX with 7.061m, NBC with 6.969m, and CW with 1.780 million.
Each adults 18-49 rating point is a percentage of the adults 18-49 US TV population and equals 1.265 million adults 18-49. The season-to-date numbers are "Most Current" ratings, which are Live+7 Day for all but the two most recent weeks and Live+ Same Day for the two most recent weeks.


Hard to argue for broadcast networks when cable networks has from time to time pulled past network TV, including Univision cracking the top two and reality TV out pulling high priced dramas. USA is the most valuable property in television, even as changes are planned to add reality TV and sitcoms to the successful light dramady and dramatic scripted shows success.

The average education level of a television viewer has gone down, as programming adjust for the largest numbers and not for the social values once require by the FCC, but abandoned with the Fairness Doctrine. While higher educated adults choose to watch premium programming, have increased reading and are more likely to be higher computer consumers over broadcast. Question is which came first, the chicken or the egg?

Viewership is moving to on demand, phones, iPads and even theaters, as the movie going audience trends up for the first time in a decade. Readership of print books, added to electronic books, is on the rise. Media is migrating on-line and away from single use devices, such as the living room television set.

The model for television is changing. The once lucrative local affiliate rerun market is bringing in less money, as cable/satellite pays more for the same programming. The episode spread is increasingly uneven, with many shows moving toward the British model of three or oven four "series" seasons a year, with four to twelve episodes a year instead of the traditional 24 to 36. The traditional seasons are eroding with year round ratings and a changing lifestyle among viewers.

The biggest change is in target market.  Ratings are no longer given in overall audience, but in 18 to 49 and 18 to 35. It is if anyone under 18 or over 50 does not exist. Successful shows have been radially retooled or cancelled, even if they are number one in overall market, because of a lack of 18 to 35 viewers. Simply put, if you are educated, older or young family oriented, you can write off most broadcast and non-premium cable television. Shows are cancelled in a matter of episodes, or after one or two seasons if not immediately. Programs with soft starts, like "Cheers" and "M.A.S.H", would not be allowed to gain the footing they did to become long run successful programs. And runs of programs are growing short (with obvious exceptions like "Two and A Half Men", "NCIS", "CSI" ands "The Simpsons"), with the cancellation trigger pushed earlier and earlier on even successful programs.

It's executive roulette, with shifts and changes in record time. And as someone moves from one position to another they are expected to make changes. All too often these changes mean using the success of their previous job as a model, and spreading what works for large but not quality or loyal audiences.

Broadcast networks may be declining but they are not dead.

Networks still live sports, but are allowing those to gradually shift to the lucrative cable networks they own or to networks owned by the sports leagues themselves. They still largest audience, an audience advertisers need. But for local affiliates the cost of affiliation and operation goes up while potential profit (outside of political years) declines.

This fall looks to be a lucrative gamble for the networks. There are signs of good health.

"SHIELD" premiers this fall, and with its being related to the the success of the now top box office move, "The Avengers", is a sure hit (if there can be any such thing).


In his new show Michael J Fox plays a newsman with Parkinson's, to raise awareness of the decease that almost ended his career. It is, according to reporters, funny, self-deprecating, well paced and has all the hallmarks of a hit.

After having now 21st Century FOX dropped a planned series of film versions, "24" is returning on Fox Network in the Spring of 2014 for 12 episodes, to play out Kiefer Sutherland's contract with FOX.

FOX doing "Shogun" and is offering the rebirth of other series, made-for-tv movies and mini-series as a short season series.

Both vertical and horizontal integration are defying what in the past would have been monopoly laws, with networks being simple pawns in empires that include theme parks, motion picture studios, cable networks, video on demand and interactive divisions.

CBS in the best position for continued success. It does not have quite the cross pollination and integration of NBCUniversal, FOX, or Disney/ESPN, but it does have hits and programing that is working.  "Big Bang" is number one is broadcast, cable repeats and top comedy around the world. NCIS is top tier in US, the top scripted drama, and number one drama in the world, with solid ratings on cable.

But there may be major changes in the future. FOX has threatened to stop its traditional affiliate based offerings and go to a pay us to air formula, while also airing directly on cable and pay-per-view. NBC and ABC have increasingly migrated top quality programming (including sports and targeted dramas) to their cable network holdings. All networks are, or are looking at, offering live and on demand of current programming over phones, iPhones and computers to compete directly or supplement the offerings of affiliates.


A decline does not mean a death knell.

And over 20% of America has only over the air reception, no matter what people in the industry (all of whom seem to have expensive cable and other delivery systems) may think.

Lurking around the corner are webisodes, original programming for Netflix (and other services), pay You Tube, and very targeted delivery of specialized programming to televisions through the Internet.

The model for production, distribution, audience targeting and above all "how to make money" is chaining and no one has a crystal ball.

Still, do not write off the Networks as DOA.


by Art Lynch
May 16, 2013

Sources:  "The Business" from KCRW, NPR, AC Nielson, Wall Street Journal, Variety, LA Times, Hollywood Reporter.

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