Broadcast nets audiences down as much as 12% says ad agency – we ask why?

By Alex Ben Block

HOLLYWOOD, CA (Hollywood Today) 3/18/2008 – The writer’s strike may be over but the big six networks are still bleeding viewers. The shrinkage of the audience watching ABC, CBS, NBC, Fox, The CW and My Network TV continues at an alarming rate, according to new report specially prepared for advertisers this month by a Santa Monica, California ad agency. “The most significant development of the season’s first half was the continued audience erosion of the six primary English language broadcast networks,” says the report.

An ad agency report says in the wake of the writer’s strike, major network viewership is down as much as 12 percent since September; and while CBS wins the first half ratings race, all 11 of their veteran shows suffered lower ratings. ABC looks strong and Fox looks like the ultimate rating champ.

“No matter the ratings currency used in comparing this season’s first half to the same period a year ago, aggregate 6-network losses are significant between 5 and 12 percent,” according to the report by savvy veteran network television watcher Chuck Bachrach, Executive Vice President, Media, Communications and Programming, for ad agency Rubin Postaer And Associates and associate David Scardino. Rubin Postaer clients include Honda, Acura, Lazy Boy Furniture, Zatarains,  Mandalay Bay Resort Motors and many others.

Bachrach watches the media to help his clients make multi-million dollar advertising time buys. For more than two decades he has issued reports on network TV for his clients providing an unbiased clear eyed view of network performance and prospects. For many years Bachrach criss crossed the country briefing key interest groups and clients on the state of network television.

This year Bachrach sees the best of times and the worst of times for CBS. On one hand, it once again won the first half of the TV season in total viewers, but it also has the most aging shows. The report says all 11 of CBS’s veteran scripted series renewed for next fall have suffered year to year audience erosion, adding “Not exactly a confidence builder.”

“CBS may have taken first half gold with Households. Total Viewers and Adults 25 to 54 but those wins can’t obscure the Eye’s double-digit declines with every major demographic (which we predicted last Summer) nor losses of the same magnitude with Households on 5 nights of the week and Adults 18 to 49 on six. In fact, CBS showed audience growth only on Saturday, a night where the networks have effectively thrown in the towel and the available audience skews 50 plus. To make matters worse, the only show the Eye placed among the Top 5 of new programs against multiple demos was “Cane,” a series the network originally announce as cancelled but then amended to “on hiatus.”

The only network that showed improvement during the first half was ABC, and things are about to get a lot better. Tonight ABC’s most powerful ratings magnet, “Dancing With The Stars” returns and soon there will be new episodes of reliable ratings generators “Desperate Housewives,” “Grey’s Anatomy” and “Brothers and Sisters.”

ABC also had the biggest almost-hit of the new season, which otherwise has produced all dry holes and no gushers. That hit is Barry Sonnenfeld’s “Pushing Daisies.” However just as the quirky sci fi comedy series was getting up a head of steam and looked like it was going to break through, there were no more new episodes due to the writers’ strike. Now that problem is over and while Bachrach doesn’t believe anyone can top Fox as number one this season in the key demos, he believes ABC could overtake CBS for second place in one of the tightest four way ratings races in the history of the medium. The four major networks are bunched together within one rating point of each other for top first half average. “Alphabet (ABC) may be part way to stronger ratings,” says the report, “It still has some big holes to fill on Tuesdays, where weak frosh comedies ‘Carpoolers’ and ‘Cavemen’ made little fist half ratings noise, and Wednesdays where he network will not bring back freshman trio ‘Pushing Daises,’ ‘Private Practice’ and ‘Dirty Sexy Money’ until next Fall. Realistically the Alphabet has little chance of catching Fox, but it could ace out CBS for second place with Adults 18 to 49.”

The report says it is Fox that has success in sight. “Fox clearly sits in the catbird seat with ‘American Idol;’ a batch of new episodes of ‘House’ and two more debuting dramas, ‘Canterbury’s Law’ and ‘New Amsterdam.’ It’s had modest if not breakout success with ‘Terminator: The Sarah Connor Chronicles,’ which debuted in January, and surprise hits with human interest reality ‘Moment of Truth’ and comedic gamer ‘Are You smarter Than a 5^th Grader?’ if all works out for the Murdoch net, the loss of ‘24’ until next January may barely be felt at all.”

Since the report was written “New Amsterdam” has premiered Tuesday at 9 holding only 44 percent of the ‘Idol” audience; and then “New Amsterdam” saw a sharp 20 percent drop in week two.

This television season will go into the record books with not one asterisk but several. It is not just that the season was disrupted by the writers. It was also a major change for those who sell, create and buy network television advertising. From the beginning of television in the 1950s until last season, the size of the audience that mattered was the number of people viewing each show. As of this season that is no longer the case. Now for many advertisers, the key measure is what has come to be called C3 – developed by ratings giant Nielsen to measure how many people watch the commercials instead of the show.

The number “3” after the letter C signifies another big change, the addition of an audience component up to three days after the show aired, representing people who watched later on using a digital video recorder such as TiVo.

The report cites as causes of network audience erosion programming disruptions caused by the 100 day writer’s strike, changes in audience measurement, a reality programming glut and the lack of a single new breakout hit from the fall 2007-2008 television season on ABC, NBC, Fox, CBS, The CW or My Network TV.

Using C3, the size of the audience was expected to be lower than with the old methodology. However, the report says there turns out to be very little difference. “The fall off from live program to C3 ratings in the first half of ‘o7-’08 has been insignificant.”

What is significant is the shrinking audience for network TV as viewers switch to alternatives on cable, satellite, video on demand, play DVDs or video games instead. “Broadcast network losses are even more dramatic when looking at a season-by-season ratings track beginning with 2004-2005,” says the report. “Since then, aggregate broadcast network ratings are down between 15 and 20 percent with Households (watching); (down) 16 to 20 percent among Total Viewers; between 23 and 28 percent in the prime Adults 18 to 49 demo; and (down) 21 to 30 percent for the Adults 25 to 54 and 18 to 34 demos.”

High noon for the networks is this May, according to Bachrach and Scardino, when it will be sweeps and all the players will have new shows to market. If they can’t reverse the tide then, there may be no salvation, just a very different playing field in television. “Given current schedules filled with repeats and untested reality until at least late March or early April, we believe the networks will be lucky to maintain losses at the current year to year levels,” warns the report. “And if there’s no ratings surge in May, when schedules, according to the networks, will be virtually all original episodes, look for a debate on the permanence of the audience decline.”

A network hit once regularly commanded up to half the audience watch TV at any one time. Today a hit can be a fifth or that or less. The networks have continued to thrive by charging more for fewer viewers for two decades. They have cut the pie up into ever smaller more specific audience segments, and sold against the niche market for that show. However, as the audience continues to shrink, there has to be a breaking point where the once dominant broadcast giants are seen as shadows of their former selves, and advertisers refuse to pay more for less.

That could start a seemingly irresistible trend that will blow through network TV like a cold wind, with economic and business consequences for the amazing shrinking networks, their gleeful cable competitors who get to play on an unlevel playing field, worried advertisers who must chase the audience and consumers who seem less and less interested in where a show plays and more interested in the quality and attractiveness of each individual program.