If you ask any broadcast network executive whether they would rather lose 10% of their audience next season but move into first place (because everyone else declined more) or gain 10% but slip into third or fourth place, they would all rather lose viewers and be in first place.
Likewise, if you asked every cable network currently outside the top 10 if they would rather gain viewers and stay where they currently rank or lose viewers but move into the top 10, they would all choose to lose viewers.
This, despite just two-tenths of a rating point separating the number 10 and number 40 ranked cable networks among adults 18-49.
This is actually as ridiculous as it sounds, but that’s what happens in an industry that doesn’t reward gains or penalize losses. This is the only business I can think of where losing customers is perfectly fine, as long as your competitors lose more customers.
At the recent upfront presentations, we heard a lot about who is No. 1 in this or that, but we heard virtually nothing about how many people are actually watching all those No. 1 networks.
We also heard that people of all ages are still watching much more traditional TV than digital or social media. But again, nothing about how many actual viewers that represents.
I’ve been saying for years that this short-term strategy of only thinking about where you rank, rather than whether you gain or lose viewers, could lead to long-term problems. Welcome to the long term.
Ad-supported cable has long been siphoning off broadcast network viewers, but until recently their combined audience remained remarkably stable. Viewers and money tended to shift around the TV pie, but the size of the pie remained roughly the same.
The audience going from broadcast to cable each season was so splintered that no single cable network got too close to any of the Big Four broadcast networks. So the broadcast networks were able to claim that they still far out-rated and outreached cable, while the cable networks were able to claim that in aggregate, ad-supported cable was higher rated than broadcast.
Separate broadcast and cable upfronts create artificial supply and demand enabling the broadcast networks to get higher CPMs from advertisers for declining ratings at the same time that half a billion dollars shifts from broadcast to cable every year.
Broadcast ratings continue to slip, and now non-ad-supported TV/video is finally siphoning viewers from both broadcast and cable.
Ten years ago, I was at a broadcast network upfront presentation where they showed a giant 4.0 on the screen – an average adult 18-49 rating they seemed very proud of, since it was higher than any other broadcast network.
At the time, I wrote in a report to clients that if we continued on this road, they would soon be talking about how wonderful they were to have an average 2.0 rating. I was wrong. They no longer even mention their actual ratings, only their rankings.
Broadcast networks still stubbornly refuse to promote one another as cable networks have done so effectively for years. In today’s media world, is there really any broadcast network executive who believes his only competition is one of three or four other broadcast networks?
Until this changes, the largest group of potential viewers in which to promote broadcast network programming will remain untapped, and network ratings will continue to drop.
And, until the marketplace dynamics and industry perceptions that continue to make audience rankings more significant than audience size change, we'll continue to analyze rankings of continually declining audience bases.