• by Joe Mandese , October 11, 2006

No one may ever know the absolute cost of the networks' decision to sacrifice delayed viewing in their advertising deals, but one thing is clear, even fractions of ratings points are still worth millions of dollars in the TV advertising marketplace. In fact, using estimates compiled by the Broadcast Cable Financial Management Association, a prime-time rating point on the Big 3 networks is worth nearly $400 million per year.

That number is derived from 2004-05 season estimates, the last data that is publicly available from the BCFM, which ceased reporting the networks advertising revenues effective with the fourth quarter of 2005. For the four quarters running through the fourth quarter of 2004 and the third quarter of 2005 - which essentially corresponds to the broadcast calendar year - the Big 3 networks took in about $7.4 billion in gross prime-time advertising sales. During the corresponding Nielsen TV year, the Big 3 networks averaged a combined prime-time rating of 19.0, or a yield of $389.4 million per annual prime-time rating point.

The costs are even higher when looked at on the basis of the key demographics that the major broadcast networks actually guarantee their prime-time advertising deals on. During the 52-week 2004-05 season, the Big 3 networks delivered a combined rating of 9.7 adults 18-49, meaning that each rating point in that demo yielded $763.9 million in annual broadcast year ad revenues.

The value of a rating point for the 2006-07 season - the one where "live"-only ratings became the basis of sales - are likely considerably higher due to ad price inflation and TV audience erosion, but that data was not available for MediaDailyNews to analyze.