Research: Behind the Numbers, Cable and Broadcast Television

The 105 million households in the U.S. all have television, according to AC Nielsen; 73.2 million of them have wired cable, and another 12.6 million are served by satellite, leaving another 20 million sets to reach into the airwaves. According to Broadcasting and Cable’s Allison Romano, the viewer doesn’t see the difference between what comes out of the box from a cable standpoint or broadcast. In fact, U.S. consumers in 2002 are expected to spend about 24% of their media hours with broadcast TV, 22% with cable and satellite, and 28% with radio. Over the next four years, these shares remain roughly constant, though losing slightly to the Internet.

The argument, then, about what’s best comes back to the advertising categories that are best suited to the medium. Kathy Crawford, EVP of Initiative Media North America, says a local, non-national advertiser is better suited for cable. In top-25 markets, advertisers can buy national ads more efficiently and get the entire country. Most of the time, cable isn’t cost-effective compared to broadcast.

But in niche and specialty markets of any size, cable may have an edge. Almost 50% of all respondents in a survey conducted for the Cabletelevision Advertising Bureau agreed that the quality of cable network news (such as CNN, Headline News, FOX News Channel, CNBC, and MSNBC) is better than that of ABC, CBS, and NBC; only 17% that disagreed. Similar results were generated among the survey’s different demographic breakouts, including men, women, $50,000+ income, college grads, adults younger than 50, and adults 50 and older. CAB President and CEO Joe Ostrow concludes that “ad-supported cable networks are widely recognized as TV’s source for superior, innovative, and comprehensive news coverage.”

Similarly, cable delivers the TV medium’s highest share of gross rating points (GRPs) in key consumer categories, according to the CAB analysis of first-quarter PNF data. Cable leads the pack in GRP delivery in households with two or more TV sets, car ownership, PC ownership, and Internet access. In households that own PCs, 40% of all GRPs are delivered by cable, compared to 34% for broadcast and 27% for syndication. On a composite basis for all consumer categories, cable delivers 38% of all GRPs, versus 33% for broadcast and 29% for syndication.

And in spite of the fact that ad-supported cable’s average prime-time U.S. household delivery rose 17.5% during the sweeps in April; that the rating increased 13.9% and share was up 11.8%; and that the seven broadcast networks were down 1.2% in prime-time delivery, 4.2% in rating, and 5.8% in share, advertisers are still diversifying their portfolios.

In 2002, ad expenditures for broadcast TV are expected to account for 20.5% of the mix, and cable TV 15.2%, with the top 20 ad spenders allocating 23.3% to cable, 68.7% to broadcast, and 8% to syndicated TV.

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