NBC Still 20% Behind Other Networks, In Only Really Important Business Category

 

Whatever business metric value you like when looking at NBC in comparison to its broadcast rivals, probably the biggest metric comes down to this number: 20%.

"No network has ever been as far behind financially as NBC is," said Steve Burke, president/CEO of NBC Universal, at a recent industry event. He said the rate for commercials -- cost per thousand viewers -- is 20% less than other broadcast networks have been getting. In its heyday -- for most of the 1990s -- NBC was the top dog when it came to the prized 18-49 adults CPM.

Burke added the network is a year or two away from where it needs to be. Some have even predicted that NBC might at least get out of its long time fourth place position to get into third place -- pushing perhaps ABC to the cellar.

But that 20% differential between NBC and the higher-priced networks -- mostly Fox -- won't be eliminated so fast. And that's the problem. CPM gains -- even at the best of times, with the most improved network shows -- are hard to come by.

For this upfront, media buyers say Fox is now at the top, averaging around $41 to $42 for the cost per thousand viewers in the 18-49 demo. ABC and CBS are a bit behind, anywhere between $38 and $39 dollars. NBC is slightly below these numbers.

Maybe NBC can have an out-of-the-blue spectacular year this season, perhaps raising overall key 18-49 rating by 10% of more.

This may get it some double digit price CPM increases at next year's upfront. But this doesn't mean it'll make up much ground -- because other networks, even with normal ratings erosion, can move in near-lock step in price. Fox, CBS and ABC, maybe perhaps a CPM percentage point - or two -- behind.

So it might take years for NBC to make significant gains, or achieve parity with other networks.

Cable and syndication TV sellers continue to have this CPM differential problem -- continuing to be sold at a CPM discount, some 15% to 20%, behind that of the broadcast networks, for their top-performing programs. A major concern for NBC is whether it has fallen into this category on a more permanent basis.

Still, a couple of new big shows this year, including a full season of NBC's high-rated "The Voice," could at least give national TV advertisers some program -- and pricing -- choices.

Tags: television, tv
Recommend (1)