Broadcast TV’s Biggest Cliffhanger: How Plunging Ratings Will Play at the Upfronts

May 13, 2013  •  Post A Comment

The broadcast television networks are starring in their own cliffhanger as the network upfronts approach, reports Brian Stelter in The New York Times.

As the nets prepare to showcase their new fall schedules this week in New York, they are facing prime-time ratings that have dropped precipitously this season, Stelter notes.

New technologies are making it easier to skip ads, while marketers are shifting money into cable. Netflix and Amazon are trying to get in the game by competing for viewers with their own original programming.

"The many pressures bearing down on the industry are casting a shadow over this week’s upfronts, an annual tradition in New York in which the new sitcoms, dramas and reality shows are previewed at splashy, open-bar events and the networks try to capture their portion of an estimated $9 billion in advertising commitments," Stelter notes.

Broadcast ratings in the key 18-49 demographic tumbled by 17% during the winter months when compared with a year earlier, according to Goldman Sachs, which called the decline "the sharpest pace on record."

At the same time, cable networks were drawing record audiences with miniseries such as "The Bible" on History and shows such as AMC’s "The Walking Dead."

Viewers "penalize the networks often — for disappointing them, for changing shows’ time slots and for canceling shows prematurely. If this season is any indicator for next year, the networks will wind up canceling almost all of the shows they announce this week," Stelter writes.

Profits have also been impacted. “At ABC, the lowest-rated of the four broadcasters, first-quarter profit fell 40 percent compared with the same quarter last year, but the network still made $138 million,” Stelter writes. “NBC, on the other hand, lost $35 million in the quarter, because of lower advertising revenues. NBC’s parent, Comcast, said the network would have fared better if its biggest hit, ‘The Voice,’ had been on in the quarter.”

At Fox, ratings erosion for “American Idol” has been a serious problem. Stelter notes: “Ad revenue slipped at Fox too, partly because ‘Idol’ has lost nearly a quarter of its viewers this season, on top of a 50 percent decline over the previous five years.”

Chase Carey, president of Fox parent News Corp., said of the season’s ratings: “We’re clearly disappointed.” Carey spoke to Wall Street analysts last week “before delivering bullish words about the coming season’s slate,” Stelter writes. “Fox eked out 15 percent profit growth, to $196 million, by spending less on programming and persuading distributors to pay higher subscriber fees — a strategy pioneered by the cable channels that the broadcasters also own.”

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