TV's Fall Is Coming (Fall In All Senses Of The Word)
Wonder? Actually, it’s more about unrealistic hope -- because of the likelihood the nets will fail again to produce more gross ratings points than they give up.
In fact the financial numbers speak for themselves. In 2005, Nielsen says the average broadcast network prime time 30-second spot pulled in the highest average price ever: $129,600. Fast forward eight years later to 2013 and that number is down to $110,200. Is that the good news, that network TV is cheaper?
Hardly, since media efficiency has declined during that time. TV advertisers paid an average $21.45 per thousand prime time viewers in 2005. Now, that number is $25.06. (Actually, more around $30 if you talk to media buying executives).
TV advertising revenue trends not are what they once were. Thus the need for higher revenue from TV program sales -- domestic, international, and, yes, new digital platforms (some that generate advertising revenue of their own).
Some $19 billion was booked this upfront market for all national TV platforms -- broadcast, cable, and syndication -- up a couple of percentage points for cable networks, and a couple of percentage points down for the broadcasters.
Still, to many this still looks like a good deal. “It [was] a great upfront. Up mid-high single digits—when ratings were down mid-high single digits,” said David Bank of RBC Capital Markets, speaking to Adweek.
Still, up mid-single digits percentage in price and down mid-single digits percents in gross rating points doesn’t speak growth, but means we are just even-steven.
So you can see why the likes of CBS is so dead set on finding more retransmission dollars coming its way from the likes of Time Warner Cable. CBS is said to be getting around 50 cents a subscriber per month from most multichannel TV video distributors, and is now asking for a big hike, more like $2 per subscriber per month.
Worse still, TV broadcasters are bracing for another probable 4% to 7% decline in prime-time gross rating points for the 2013-2014 season, without any high-revenue Summer Olympics or big political TV dollars.
The upfront market was over in late July/early August, and according to most network sources an average amount of inventory, mid 75%, was sold. That means even more TV make-goods, which in turn means less inventory in the scatter market.
It’s the TV fall, and despite hope, we should probably see the downward movement of the fall, with lots of metrics to back that up.