CBS senior research executive David Poltrack estimates the four networks will grow 5% in advertising revenue in 2011 -- in part by some 20% or more higher scatter pricing. But not all networks will benefit.
Speaking at the UBS Global Media & Communications conference this week, Poltrack, chief research officer of CBS and president of CBS Vision, said 2010 was a strong year, growing the networks 6.2% in ad revenue versus a difficult recessionary 2009. A major part of this increase comes from higher Olympic-year revenue. Outside estimates are that the four broadcast networks pull in around $12 billion to $13 billion a year.
But in 2011, Fox will find it hard to capitalize on the sharp rise in scatter pricing because of its makegood situation, given its deep drop in 18-49 ratings so far -- around 20%.
Poltrack also noted that the increase in time-shifting continues to push network viewers beyond where the nets get paid from advertisers. CBS now gets a fifth of its viewers from time-shifted viewing.
The viewing situation will continue to worsen.
Nielsen will soon count repeat viewing of time-shifted programming into the mix, which is estimated to raise viewing levels 3% among 18-49 viewers and 6% for 25-54 viewers among live-plus-same-day program ratings. Looking at C3 ratings -- commercial minute ratings where network do deals with advertisers -- the numbers are somewhat less: around 2% for 18-49 and 2% for 25-54.
CBS continues to be the leader in C3 ratings through November 7 -- at a 2.7 rating among 18-49 viewers, up 1% from a year ago; ABC is down 7%, to a 2.5; Fox is off 20% to a 2.3; and NBC is up 3% to a 1.7. In almost all cases, C3 was down versus its comparable live-plus-same day ratings: In adults 18-49, CBS earned a 2.8, followed by ABC at 2.7; Fox at 2.2; and NBC at a 1.8.
Poltrack says major cable networks have made gains over the last several years. But little in the way of growth from new U.S. penetration levels will mean growth will depend purely on getting higher-rated programming in the future.
Cable is no longer making gains at the expense of the broadcast network, he says.
About half the cable networks witnessed gains in C3 rating growth; with about half losing rating growth. Six had gains in C3 growth this season among 18-49 viewers; eight declined, with 26 remaining the same. Looking at 25-54 viewers, eight gained in viewers; eight lost ground and 24 remained the same.
Looking at the future of TV distribution systems, Poltrack sees gains. Although broadcast networks are growing with retransmission dollars, Poltrack says they only represent $1 billion of a total of $67 billion -- a small slice of the overall pie for broadcasters.
Poltrack doesn't believe people are "cutting the cord" to cable, satellite or telco operators in any meaningful numbers. One indication is online viewing. Nielsen says online video streaming has just 1.7% share of the overall TV population, with 98.3% still going to traditional TV viewing.
"It does not appear to be a major threat to any of the TV distribution systems," he noted in his remarks.