The Ups and Downs of Cable Ratings

Mar 21, 2005  •  Post A Comment

It would seem to be a major news flash: Cable ratings are down.

The Syndicated Network Television Association, during its New York conference on March 10, said as much. But cable industry executives say no way.

Mitch Burg, president of SNTA, said that from October 2004 through January 2005, ad-supported cable network viewership slipped 1.4 percent versus October 2003 through January 2004. During the same period, syndicated programming was up 5.2 percent and broadcast network TV was nearly flat with just a 0.4 percent increase, Mr. Burg said.

The Cabletelevision Advertising Bureau disputes the SNTA’s findings.

“We went and used their sources and couldn’t make their numbers work,” CAB President and CEO Sean Cunningham said. “We suspect they were using a different subset of numbers.

“It’s a disservice to tell a ‘cable down’ story, because we have had continued growth in many other areas, especially in prime time, which is up over a year ago.”

On a total-day basis during the same period-October 2004 through January 2005-cable is up 7 percent, said CAB Director of Research and Insight Evelyn Skurkovich.

Who’s right?

That depends on your definition of viewership.

The difference is that the SNTA counts average program ratings, said Hadassa Gerber, director of research and systems for SNTA, while the cable industry computes aggregate ratings. That means, she said, the cable industry adds up viewership data for all shows on all networks for a specific period, and then compares it with a similar period a year earlier.

Ms. Gerber said cable makes its viewership gains because it continually adds new networks to its pool of channels. For example, this year Nielsen is calculating ratings for 60 cable networks versus 54 a year ago.

But the growing number of cable networks is not necessarily good news, says the SNTA.

“These [new] networks are lower-rated. That brings down [cable’s overall] average,” Ms. Gerber said.

Not only has household viewership dropped 1.4 percent, she said, but numbers have fallen in the coveted adults 18 to 49 demographic as well-down 2 percent for October 2004 through January 2005.

Cable industry research executives admit it’s possible that average program ratings could be down, but contend such research isn’t necessarily useful.

“The average cable network program might be declining because there are more networks,” said Jack Wakshlag, chief research officer for Turner Broadcasting System. But he said it’s “silly” to measure average program ratings.

Advertisers, he said, don’t buy media on average program ratings. “They buy on reach and frequency,” Mr. Wakshlag said. “They buy gross rating points.”

Eyeing the Top 10

For a fairer assessment of the industry, he said to look at the top 10 cable networks, which account for the bulk of cable viewing. For example, total-day ratings in 2004 were up for eight of the top 10 cable networks, with one network showing flat ratings and one down just 5 percent, he said.

But that’s not the full picture of the industry, SNTA’s Ms. Gerber countered. She said, for example, there are now more lower-rated cable networks than in previous years.

For example, 22 of the 60 Nielsen-rated cable networks, or 37 percent, had a 0.1 or lower total-day household rating. This is against 31 percent of the networks for the same period a year before, when 17 of 54 networks had a 0.1 or lower total-day household rating. Ms. Gerber said 52 percent of the 60 networks earned a 0.3 or lower from October 2004 to January 2005. That number is up from 50 percent for the same period a year ago.

An aside to this story, other research executives said, is that more new cable networks are eating into the overall ratings of older, established cable networks. But Mr. Wakshlag said that’s not the case.

“There is no loss from cannibalization,” he said. “‘Law & Order,’ for example, is having its highest ratings on TNT right now.”

The syndication-versus-cable argument matters mostly to media agency research executives, who recommend buying strategies for their buying executives. Their view is that syndication and cable have their own agendas. And media agency executives don’t depend on such research, but instead do their own analysis, depending on their specific needs.

For instance, Stacey Lynn Koerner, executive VP of global research integration for Initiative Media, New York, said that in examining the overall health of any sector of the business, she doesn’t look at average ratings.

“Nobody does that,” she said. “We never look at cable based on average program ratings.”

But when making a specific advertising buy on a cable network, that’s a different story.

Would Initiative use average program ratings to analyze a potential buy for a client on, say, A&E Network? “Absolutely,” she said.

While cable’s average program ratings may be dropping, syndication is not immune from its own ratings quirks. For years, advertisers have claimed that syndication sometimes misrepresents the performance levels of its shows because the industry touts and sells off of a gross average audience rating.

GAA ratings are an aggregate of multiple airings of an episode, regardless of whether audience is duplicated. GAA ratings are bigger than average audience ratings-the ratings for only the initial run of an episode.

Advertisers also complain that syndicators overexpose commercials because they can run their messages in those episodes that run multiple times. Sometimes syndicated shows are double-run in certain markets but not in others. These practices are sometimes referred to as “double barter.”

Syndication’s 5.2 percent year-to-year gain in viewers reported by SNTA for the period of October 2004 through January 2005 may not be as significant as it first appears, said Initiative’s Ms. Koerner. “If the TV households universe grew by, say, 4 percent during that period, then syndication’s 5.2 percent gain doesn’t look that impressive,” she said. “I’m not gunning for them. It’s just another way of looking at data.”

That said, cable has yet another way of looking at that data.

According to Turner’s Mr. Wakshlag, syndication is up, but not by as much as the SNTA claims. Syndicated programming was up 4.5 percent for the period to a 2.3 Nielsen Media Research household rating, Mr. Wakshlag said. Cable was up 8 percent to an 18.9 household rating, and broadcast network was off 1.7 percent to a 5.9 household rating for the period.

It’s normal at this time of year for all forms of TV distribution to compete for attention as the upfront advertising market is only seven weeks away.

“It does create some interest to say you are in the growing part of the business,” Mr. Wakshlag said.

Different Criteria

Syndication is bound by different criteria. Unlike broadcast and cable, syndicated programming runs on different stations at different times and is also carried on some cable networks. That makes it hard to get total aggregate viewing data for syndicated programming, Ms. Koerner said.

But in the long term, syndication’s approach to examining ratings data might gain favor-especially with the advent of the digital video recorder, which allows viewers to watch a TV show at any time.

“Syndication has the problem in that there is no such thing a [program] share,” said Brad Adgate, senior VP and corporate research director for Horizon Media, New York. “They can’t play the share game because, obviously, time periods for syndicated shows change from market to market.”

He added: “As [DVRs] become more prevalent, the same could be said for cable and broadcast shows. What is a share, really? You’ll watch a show whenever you want to watch a show. The industry has been moving in the direction that syndication has been in for years.”