Broadcast, Live Viewing Still Dominant, OTT Growing

As the new TV season gets underway, here are a few things worth considering:

Broadcast networks still dominant: AMC’s “Walking Dead” is the highest rated prime-time series among adults 18-49 on television (barely ahead of HBO’s “Game of Thrones”).  

But a ranking of all broadcast and cable original scripted series for the full 2016/17 broadcast year shows 12 broadcast network series before we get to the third-highest-rated cable series (FX’s “American Horror Story”), 10 more before we get to the fourth-highest-rated cable series (Adult Swim’s “Rick & Morty”), and another 26 before we hit the fifth-highest -ated cable series (AMC’s “Fear the Walking Dead”).

Of the top 100 ranked original scripted prime-time series among both adults 18-49 and 25-54, 86 were on broadcast, nine were on ad-supported cable, and five were on premium cable.  

Does live viewing still matter?  About 80% of broadcast series’ weekly audience in prime time among adults 18-49 and 25-54 is live.  The average cable network has about 90% of its audience live.  

Cable has a much smaller percentage of original scripted series, which have the highest incidence of delayed viewing.  But original scripted series have substantially more delayed viewing (particularly those on cable networks).  

“Walking Dead,” for example, had just 50% of its adult 25-54 audience live last season, while “American Horror Story” was 52% live, “Better Call Saul” 40% live and “Pretty Little Liars” was only 46% live.

Does this matter?  In a broad operational sense, no.  Delayed viewing does not significantly impact overall network or programs rankings, which are more important in the buying and selling of commercial time than actual rating size.  And does it really matter that Nick-at-Nite and ION have 95% of their audiences as live when they generate less than three-tenths of a rating point?  

From an advertiser perspective, however, live viewing should matter.  Regardless of whether it affects what networks or shows they buy, advertisers need to know how many people are actually exposed to their commercials (and it should affect how much they pay).  

Every study I have seen (including one I conducted myself) has indicated between 70% and 80% of DVR viewing involves fast-forwarding through commercials. Knowing how much live viewing is taking place really does matter – it’s the only way to estimate how many program viewers are potentially exposed to the commercials.

Lots of room for more streaming services – We East and West Coast media elites tend to have multiple media devices and streaming services. I currently subscribe to Netflix, Hulu, and Amazon Prime (in addition to my cable package that includes virtually every premium movie channel and has multi-room DVRs). 

It’s easy for us media industry folk to lose sight of the fact that roughly half of all TV households across the country have no DVR and half have no streaming services.  And the number who have top-tier cable packages is declining.  CBS All Access, Disney/ABC, and others are putting down markers, trying to gain a foothold into this new media world.  There’s more room for them to thrive than many seem to think.

And let’s not forget Apple getting into the original scripted series business, which could be another game-changer (although no one currently seems to know how an Apple series will be distributed).  Apple is reportedly looking for high-end dramas in the mold of  “Breaking Bad” or “The Crown.”  

According to The Hollywood Reporter, multiple agents have acknowledged that projects they ordinarily take to HBO and Netflix are now taken to Apple as well.  Its first project reportedly will be new episodes of “Amazing Stories,” a sci-fi/horror anthology series that aired on NBC in the 1980s. 

Steven Spielberg, who produced the original, will be involved, as will Comcast’s NBC Universal.  Apple plans to spend around $1 billion on programming in the next year (a substantial amount, but still far less than the $6 billion spent by Netflix this year).

The video landscape is undergoing sea changes, and a lot of major players with deep pockets are trying to figure out how to compete.  Interesting times, to say the least.

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