Network Audience Delivery Dives In Q1, TV Usage Declines Accelerating

Halfway through the first quarter, the network TV marketplace appears to be getting off to a troubling start, according to the tracking of a leading Wall Street securities firm following the sector.

Broadcast network delivery is projected to be down 9.4% and cable network delivery is down 2.4%, forcing both broadcast (+8.8%) and cable (+6.4%) to boost CPMs in order to cover shortfalls, according to the analysis from the equities research team at UBS.

"Viewership declines have accelerated to start 2020 with Person 2+ PUT trending down 7.5% quarter-to-date vs. -6.3% in the fourth quarter of 2019, and -7.0% a year ago," writes UBS analyst John C. Hodulik in a note sent to investors this morning. By "PUT," Hodulik is referring to the Nielsen acronym for persons using television, which seem to be eroding at an accelerated rate due to a variety of macro factors (see chart below).



"If the trend holds, it would represent the largest quarterly decline for TV viewership in our data set," he explains, adding: "Trends have worsened across most age demos with persons 25-34 now falling -17% vs. low double-digit declines throughout 2019. The persons 55+ demo continues to trend down ~2%, similar to 2019 (the first year of declining ratings for the demo)."

2 comments about "Network Audience Delivery Dives In Q1, TV Usage Declines Accelerating".
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  1. Ed Papazian from Media Dynamics Inc, February 19, 2020 at 10:50 a.m.

    Joe, as I have pointed out before, the so-called 18-49 "targeting" ratings are merely a GRP tonnage  guarantee metric, not a true brand targeting indicator. Also, when an upfront buy is made, the buyers and sellers do not merely assume that next year's ratings will be exactly the same as this year's when Nielsen is showing, say, a 12% drop each year. The buyers and sellers make future estimates for all shows and channels assuming an added  decline in ratings due to the impact of competing sources of content. Once they agree on these the buys---with their expected deliveries---are made. In the event that ratings for the guarantee metric---18-49 or 25-54--decline by 14% instead of the expected 12%, the net loss to the sellers---which will be made up via make goods---usually---as opposed to cash rebates---is only 2%.Some people seem to think that ad dollars flow in precise relationship to the ratings as they are reported---but that isn't the case where upfront buys are concerned. As for scatter buys, these are always short term in nature---quarterly not annually---and guessing the anticipated future ratings in aggregate for a given schedule is a far less risky business as once the earlyfall numbers are seen the new  season's winners and losers are fairly well established.

  2. Alan COX from Dan Fife Communications and Marketing, February 19, 2020 at 11:52 a.m.

    A BIG Amen Ed Papazian !

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