Broadcast Networks Losing Upscale Viewers

Dec 8, 2003  •  Post A Comment

Missing young male viewers are not the only worry for TV networks. It appears that older, more affluent viewers are leaving broadcast network television as well.
Data for October collected from Nielsen Media Research shows that most networks have seen steep 15 percent to 20 percent declines or more in the prized demo of adults 18 to 49 with annual incomes of $75,000-plus for regularly scheduled programs.
“It’s shocking,” said Lyle Schwartz, senior VP and director of media research for media agency Mediaedge:cia, New York. “It’s not pretty.”
Though Fox easily led all networks in that demo during October with its baseball playoff coverage, posting numbers 33 percent higher than a year ago, Mr. Schwartz said virtually all other regular programming has taken a big hit. Fox’s baseball coverage doesn’t completely explain this massive viewership drop.
One theory is that there could be a shift from TV usage to other media for these viewers, Mr. Schwartz said. Currently, viewing is down a “minor” amount for the entire adults 18 to 49 demo, he said. And currently, media agency researchers aren’t accusing Nielsen of measurement problems, as they did with the drop in young male viewers.
But network executives are. “This whole young male thing is affecting this,” said David Poltrack, executive VP of research and planning for CBS.
Instead, media agency executives are pointing to some historical trends by upscale viewers that might explain the drop, such as electronic gadgets that are becoming less expensive.
“Early adopters tend to be affluent,” said Brad Adgate, senior VP and corporate research director for Horizon Media, New York. “The price of new [electronic] toys tends to be expensive, like satellite radio or personal video recorders. When prices come down, things start to reach a critical mass. This might be coinciding with consumers who are using other products besides television.”
Over the years, one of NBC’s key selling points has been not just the strength in its prized adults 18 to 49 demo but how well the network does with upper-income viewers. These viewers are typically light TV viewers, which also makes them more desirable to advertisers. For years NBC has had a big lead over the second-place network in adults 18 to 49. But in adults 18 to 49 with $75,000-plus incomes, NBC’s lead over the second-place network is even bigger.
In terms of regularly scheduled programs, NBC is still ahead. In October NBC actually had more shows in the 20 top-rated programs for the adults 18 to 49 earning $75,000-plus demo than the year before-11 vs. 10. CBS had five in the top 20, down one, and ABC had four, the same as a year ago.
Including the baseball playoffs, NBC witnessed a steep decline of nearly 20 percent in the adults 18 to 49 $75,000-plus demo vs. last year. Although CBS made gains in overall viewership, households and adults 18 to 49 during the November sweeps period, it lost ground in upper-income viewers by 15 percent in October. ABC was off 6 percent. The WB and UPN also experienced double-digit percentage decreases.
Only Fox was able to post a gain in adults 18 to 49 with annual incomes of $75,000-plus-but analysts say that was because of the World Series and baseball playoffs. “If you take out the World Series, NBC remains dominant,” Mr. Schwartz said.
NBC’s “Friends” was the top show this year among adults 18 to 49 with annual incomes of $75,000-plus, followed closely by “CSI.” “Friends” dropped 26 percent year to year, and “CSI” lost 22 percent. Last year “ER” was No. 1, and it sank a whopping 39 percent this year.
Media agency executives said a smaller overall rating supply of upscale viewers means pricier program buys for advertisers. “We are seeing substantial declines,” Mr. Schwartz said, “and that means buying them now is going to get mighty expensive.”
For example, NBC has seen a 20 percent decline in adults 18 to 49 $75,000-plus. That means advertisers would need to pay an increase in cost-per-thousand-viewer prices, according to Mr. Schwartz.
This isn’t good news for advertisers. “No one guarantees [media] deals on income,” said Mr. Adgate. He also expects cost-per-thousand prices to increase.
Only two shows in the top 20 from a year ago improved in the demo. ABC’s “The Bachelor” climbed 15 percent and “Monday Night Football” rose 5 percent vs. the same time period a year ago. ABC’s 5.3 rating for “8 Simple Rules” was the same vs. a year ago.
Both The WB and UPN posted losses. But media agency executives said the 18 to 49 upper-income demographics aren’t as important to those networks as are young male and female demographics.
This is the first season of a newly developed Nielsen demographic/income category: adults 18 to 49 with $100,000-plus annual income. NBC executives have been eagerly awaiting these numbers as more proof of the network’s dominance.
For the month of October, Fox was much higher than NBC in this group, due to its broadcasts of the baseball playoffs and World Series. Fox posted a 5.6, slightly lower than its $75,000-plus numbers. NBC was next at a 4.1, also lower than its $75,000-plus numbers. Next came ABC, then CBS, the WB and UPN.
Mr. Poltrack added that if advertisers are looking at affluent viewers who earn $75,000-plus, they should look at all viewers, regardless of age. From Oct. 28 to Nov. 17, CBS would then be the highest at a 5.5. NBC would be next at a 4.9, then ABC at a 4.2 and Fox at a 2.4.
Nielsen and the broadcast networks have had one major dispute since the start of the season, which arose from the steep drop in young male viewers. Nielsen says 40 percent of this drop was due to methodological change in its 5,000 home sample.