Ratings: The New TV Normal
TV ratings have always been a slippery beast.
Traditionally, networks made money via advertising. Ratings were the method that let ad buyers know what they were getting for their investment. But the system was never airtight. Fifty years ago, TV ratings were measured via a random sample of households that kept diaries of what each member of the family watched. The system was subject to fudging, omissions and mistakes, depending on who was completing the diaries.
“People Meter” technology took some of that uncertainty out of the equation. But essentially, it still involved some effort on the part of those who’d agreed to be measured to ensure the meter captured who was watching. Current cable and satellite technology would probably allow much better measurement of what’s being screened, but privacy concerns restrict the collection and use of such data.
That leaves us with the broadcast networks navigating a “new normal” in the world of TV ratings. Performance in the “viewers age 18 to 49” demographic remains key. What’s changed is the bar. In general, the performance floor has steadily declined over several years. Even five years ago, a show scraping a 1.5 rating in the key demo would likely have resulted in immediate cancellation. In the current environment, such a show would be considered a solid, mid-level performer likely to earn a renewal.
Very few broadcast shows bring in big numbers, either overall or in the key demographic. You get an occasional outlier like Empire, which became a pop culture phenomenon. But for the most part, “live” TV viewing has steadily eroded. Ratings measurements are scrambling to catch up.
Even twenty-five years ago, the four broadcast networks (ABC, CBS, NBC and FOX) dominated TV viewership. Donation-supported PBS was a solid player. Premium and basic cable channels were finding their way, but the universe was still relatively small and offered little in the way of original programming. Networks like HBO, Showtime, TNT, USA, Bravo, Syfy and AMC were still years away from game-changing, identity-defining hits. Streaming wasn’t even a twinkle in an early adopter’s eye.
Flash forward to now and viewers have hundreds of cable and satellite options. For most viewers, the old divide between “broadcast” channels (available free over the air with a regular TV) and “cable” outlets has evaporated. The number of households that watch TV without cable, satellite or some other digital mediation represent a distinct (and ever shrinking) minority.
Broadcast networks have to compete with all the options, both premium and basic cable and the growing crop of streaming services. Technology has changed how we view TV. The revolution represented by the invention of the VCR has blossomed into regular time-shifting via DVR, Video On Demand, online video and streaming. Cable and streaming ratings targets are often quite lower. Especially for basic cable channels, lower production budgets, smaller episode counts and heavy rerunning make turning a profit on an episode of television easier.
Live TV ratings have steadily declined in relevance. The industry has scrambled to figure out new ways to measure viewership and how to monetize viewing that occurs outside the “regular” airing. Those issues are impacting what are considered “acceptable” live viewing numbers.
Streaming and premium cable don’t really care so much about demographic performance. They’re subscription-based and therefore are concerned with overall viewership. Demographics are relevant only to the extent that outlets want to produce programming that appeals to their subscriber bases.
The rise of streaming has also changed how media companies make profits after a show’s initial run. Traditionally, a series needed to produce somewhere between 80 to 100 episodes in order to be viable in second run syndication. For shows with lower ratings, hitting that mark could be a challenge. Media consolidation helped with that to some extent. As each broadcast network acquired a sister production company, pressure increased on the network sibling to take an immediate hit with lower ratings and profits for the longer term benefit to the company as a whole.
Those issues are still in play with streaming. Streaming services don’t require any set number of episodes to add series to their rosters. In some cases, shows that had middling ratings during their network runs found new audiences in the streaming world. Even an unsuccessful series can make some money that way. It’s one of the reasons outright cancellations have become less common recently. Ratings for a series may be dismal, but a network will allow it to play out for ten or so episodes, to give its studio sibling a chance to create a complete story that can work in the streaming space.
The economic value of delayed viewing is still a work in progress. On Demand viewing, where for the first week all commercials are included intact and the fast forward capability is disabled, can be very valuable for networks. Advertisers are willing to factor those views over the first three days after an episode premieres into ratings calculations. That was a key factor for FOX’s recent renewal of horror parody Scream Queens. Its same day numbers were dismal, but it was one of the top On Demand performers within three days after the first airing.
Beyond those first few days, episodes tend to jettison their original commercials and replace them with more limited commercial interruptions. Those generate income, though nowhere near as much as ads for live TV.
The impact of DVR viewing is also an ongoing discussion. Networks have been touting viewership levels for shows after factoring in seven days of DVR playback. Those numbers often significantly inflate live TV ratings. But advertisers have been slow to agree to consider those seven-day numbers. They’ll entertain the impact of three days of DVR playback, but only to the extent that networks can demonstrate effective exposure to the ads. That can be a difficult measurement to produce, especially since very view DVR viewers voluntarily watch commercials.
The TV landscape has shifted so dramatically that the bar will continue to lower. Right now, shows on ABC, CBS, NBC or FOX that can successfully pull in 1.5 ratings in the 18–49 demo will likely win renewal. The bar for The CW and basic cable is even lower than that, with many shows well under a 1.0 demo rating likely to survive. Networks are insisting they are considering factors other than same day ratings into renewal decisions. But they’re still figuring out the economics of how “platform” viewing generates income.
Broadcast networks already are being pulled into parity with their cable peers. The day will come when “live” ratings don’t matter much at all.
Originally published at thunderalleybcpcom.ipage.com on February 16, 2016.
