• by David Goetzl  @dgoetzl, October 4, 2006

Despite a ratings dive for the second week in a row, NBC executives aren't biting their nails yet about the fate of the much-hyped "Studio 60 on the Sunset Strip." While the 19 percent drop in the adult 18-to-49 demo Monday followed a similar plunge the week before, the show still has a ways to go before it settles in as a loss leader.

The 3.4 on Monday is still several tenths above the baseline that NBC could live with to keep the show on air, an insider says. Even if it dips to the 3.0 range and then holds steady, "Studio 60" features several benefits for NBC. For instance, it provides a halo economic boost.

Consider the show's encouraging upscale profile, which NBC could leverage in broader ad sales packages. There is revenue the show can generate from online distribution, which might increase as consumer adoption grows. It offers promotional opportunities for shows with similar audience appeal, such as "The Office" and "Law & Order." Also, the drama's widespread critical acclaim buttresses NBC's brand of quality entertainment, which the network is striving to maintain.

The show may also cost less to produce than some reported figures. Despite the high talent costs associated with stars such as Bradley Whitford and Matthew Perry, there is some speculation that production expenses may be in the $2 million-per-episode range, on par with other leading network hour-long dramas. An NBC representative did not immediately return an email seeking comment.

"Studio 60" premiered Sept. 18 with a 5.0 in the 18-to-49 demo, then dropped 16 percent to a 4.2 in week two. On Monday, it fell another 19 percent to a 3.4, and continued in second place in its 10 p.m. time period, trailing CBS' smash "CSI: Miami" by big margins.

But next week, the ABC competition in the time slot--which on Monday was the premiere of "The Bachelor"--could weaken with the season debut of drama "What About Brian," leaving viewers up for grabs. "Brian" was a surprise second-season pick-up for ABC, after finishing last year ranked 71st among all shows in the key 18-to-49 demo.

"Studio 60" could also gain a lift from its lead-in, "Heroes," which has given NBC surprisingly strong early ratings in the Monday 9 o'clock hour. The drama has won the time period for the season's first two weeks, averaging a 5.7 in 18-to-49s, although it saw a slight 7 percent drop on Monday from week one.

While "Studio 60" may only prove to be a loss leader, NBC appears to have caught a break on Thursdays as "ER" returned to the lead spot in the 18-to-49 demo at 10 (and is ranked fourth among all shows in the demo). The principal reason appears to be CBS' decision to shift hit "Without a Trace"--the only show ever to beat 13-year-old "ER"--to Sundays.

With a 6.5 in the key demo over two weeks, "ER" leads new shows "Six Degrees" (ABC) and "Shark" (CBS) by 35 percent and 59 percent, respectively. However, the season is a mere two weeks old, and the two competing shows could gradually develop an audience similar to what "Trace" did. "ER" could also stumble if NBC's weaker, third-place shows in the hours preceding it fail to provide enough of a lead-in.

"There's some rebound for 'ER' because 'Without a Trace" is not there; the loyal 'Without a Trace' viewers are now freed up to choose among shows--and for the most part, have chosen to go back to 'ER,'" said Lyle Schwartz, executive vice president and director of research and marketplace analysis at Mediaedge:cia. "And we'll see over the weeks to come, if they stick with it."

So far, CBS has had mixed results with the shift of "Trace" to Sundays, partly designed to capitalize on that night's 10 p.m. time slot being vacated by "Grey's Anatomy." While "Trace" has posted massive ratings increases over the now-cancelled "Sunday Movie" for CBS, it has finished third in the 18-to-49 demo in prime time, although the dynamic could change after football season with the end of NBC's prime-time games.