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The Year Basic Cable Arrived

Dec 22, 2003  •  Post A Comment

The most talked-about show on TV this year might have been “Queer Eye for the Straight Guy.” Or maybe it was “Nip/Tuck.” Either way, the shows viewers talked about in 2003 originated on basic cable.
That’s a big change for cable and a major blow to the traditional over-the-air broadcast networks. Basic cable is drawing a bigger share of the viewing audience this year, again. But that’s understandable, broadcasters argued. So many channels, so many choices are bound to add up.
What the broadcast networks staked their claim on were quality shows that drew appointment viewing. That kind of programming kept advertisers paying premium rates.
But viewers are noticing that the broadcasters no longer have a monopoly on that type of programming. Advertisers are noticing too.
HBO broke through in recent years as a premium channel with successful series.
This year, it was basic cable’s turn. “Queer Eye” was such a sensation that it was broadcast by parent NBC after appearing on Bravo. The star of FX’s police drama “The Shield,” Michael Chiklis, followed his 2002 best actor Emmy by winning a Golden Globe for best actor in a drama series for 2003. Tony Shalhoub, the star of USA Network’s “Monk”-also repurposed on a broadcast network, in this case ABC-received the Emmy for best performance by an actor in a comedy. TNT’s original movie “Door to Door” won six Emmys, and Sci Fi Channel’s “Steven Spielberg Presents Taken” won best miniseries.
All this good fortune for basic cable in 2003 translates to “more respect for cable programming,” said Mark Lazarus, president, Turner Entertainment Group at Turner Broadcasting System.
Tim Brooks, a television historian and executive VP, research, at Lifetime, said one of the biggest things that set 2003 apart for basic cable is that the success was so widespread.
“This year some of the biggest and most-noticed shows of the year were on cable and not broadcast, and they came from many different directions,” he said.
For scripted fare, conventional wisdom was that basic cable’s version was B-level, said USA Network President Doug Herzog, whose has worked in both broadcast and basic cable. “That perception and the reality is that’s changed. I think cable’s got some of the best hours on television.”
Cable managed to make that change because the sector has been “unafraid to differentiate itself,” Mr. Herzog said. “The broadcast networks spend a lot of time looking over each other’s shoulder and imitating each other. I think one of the hallmarks of the best of the scripted cable stuff is it’s stuff you can’t see on the networks.”
Mr. Herzog acknowledged that cable networks don’t have to put as many original shows on the air as broadcast networks do.
Closing Gaps
At the same time the quality of programming gap is closing, so is the distribution gap between broadcast and cable, Mr. Lazarus said. Turner’s networks are in 86 percent of U.S. households. And in November Nielsen reported that 32 networks had 80 million or more subscribers.
The ratings gap is closing too.
Cable’s hot shows are consistently drawing high ratings. TLC’s “Trading Spaces” averaged a 3.1, FX’s “Nip/Tuck” and MTV’s “The Osbournes” each did a 2.9 and both TLC’s “While You Were Out” and MTV’s “Real World” came in at 2.7.
And while men are disappearing from the broadcast networks, they’re still tuning in to cable.
“Where the heat is, and where the younger viewers are, is cable,” Mr. Brooks said.
Overall, with a couple of weeks still to go before year-end, ad-supported cable networks drew a 29.9 rating, up 5.7 percent from 2002, and a 50.3 share, up 4.8 percent. The seven broadcast networks’ rating was down 2.9 percent to 26.7 and their share dropped 3.9 percent to 44.8.
Betsy Frank, executive VP of research and planning at MTV Networks, said that “the patterns we are seeing in this year’s television season are not aberrations, but rather, glimpses of the future that will likely continue and deepen at a faster pace.”
That’s because cable seems to offer the viewer what he wants, she said.
“It appears that the paradigm which has served broadcasters well for over 50 years has to change, and that the cable model of targeted audiences, year-round innovation and 24-hour availability is meeting viewers’ needs far better than broadcast is,” Ms. Frank said.
Perhaps the clearest indication of cable’s newfound power is the interest it has drawn from NBC, which in the past year acquired Bravo and in October agreed to acquire Vivendi-Universal’s entertainment assets, including its cable channels USA Network, Sci Fi Channel and Trio.
“The broadcasters used to treat their cable divisions as second-class citizens and a dumping ground for reruns,” Mr. Brooks said. “2003 was a year in which the intermixing of cable and broadcast and the nurturing of new kinds of TV programming really came [to] flower,” he said.
It’s not as if the broadcasters weren’t trying to combat cable’s gains. In January they used reality shows such as Fox’s “Joe Millionaire” and ABC’s “The Bachelorette”to drive a 3.2 percent ratings increase.
In June, broadcasters launched an effort full of originals to combat cable’s traditional strength in the summer-a period where until recently, reruns ruled over-the-air, while cablers rolled out their fresh wares. They appeared to reverse the tide, but couldn’t follow through. Premiere week didn’t help much-“viewers looked and then left,” Mr. Brooks observed-and cable drew more viewers than broadcast during the November sweeps.
Despite their ratings gains, cable networks continue to complain that Madison Avenue shortchanges them, while overvaluing the broadcast networks.
During the upfront in May prices skyrocketed for the broadcasters, which pulled in $9.3 billion. Rates also rose on the cable side, which took in a record $5.4 billion during the upfront.
Advertisers may finally be convinced next year to accept what cable has been saying-that cable advertising is a better buy.
“The marketing community is saying we need to get more value for our dollars. Everything’s got to be re-evaluated, Mr. Lazarus said. Asked whether that will happen in 2004, he said: “I think absolutely.
The top-tier cable guys have outpaced the market 25 percent in total volume, said Joe Abruzzese, president, ad sales, Discovery Networks, U.S., who, like Mr. Herzog, is a former broadcast executive. Gains in pricing will come in 2004, he said.
Some big advertisers already have shifted big bucks to cable from broadcast. During the first nine months of 2003 Procter & Gamble increased spending on cable by $97 million, or 36 percent; General Motors spent an additional $57 million, or 26 percent, on cable; and Novartis boosted cable spending by $46 million-or 147 percent.
Integrated Future
In addition to their earning higher ratings than in the past and being low-priced alternatives to broadcast, cable networks have been attracting more ad dollars because they do more integrated marketing.
For Discovery, Home Depot is integrated into hit shows “Trading Spaces” and “While You Were Out,” and more advertisers are looking to do it as well. “That’s the wave of the future,”Mr. Abruzzese said.
But all may not be rosy for the cable networks. The cable operators are now casting shadows.
After acquiring AT&T Broadband, Comcast became the largest cable operator, and one of its first orders of business was to cut programming costs by $600 million a year. Tough negotiations ensued with Starz!, HBO, Court TV and other networks. In the past, operators have talked tough but in the end wound up paying increased license fees.
Feuds also are breaking out over the high cost of sports programming. After a public spat Cox agreed to renew its contract with the Fox Regional Sports Networks-and take Fox’s National Geographic Channel and Fuel extreme sports channel to boot.
On deck: a particularly nasty battle-Cox vs. ESPN. As they haggle over a new contract, Cox and ESPN have launched dueling Web sites. Cox claims ESPN charges too much; ES
PN says Cox has been exaggerating the size of the increase ESPN is seeking.
Will Cox take ESPN off or put it on a sports tier? Or will it back down? Stay tuned.