UPDATED WITH MORE STATS: It’s that time of year when, happy year-end stats having been distributed in heaping handfuls, cable network execs head to the new year with their hats on the side of their heads and a spring in their step. This year, however, cable execs can be spotted more closely resembling someone who recently got caught in some powerful machinery.
Sure, USA boasted it hit its ninth consecutive year as No. 1 in primetime among ad-supported cable entertainment network in overall audience (ESPN finished No. 1 overall, but it’s a sports network). And yes, Nickelodeon bragged that it’s finishing the year as the top basic cable network with kids, and overall audience, for the total day. And TBS crowed it is basic cable’s No. 1-ranked entertainment network in primetime in the demo for a third consecutive year, while TNT claimed six of basic cable’s top 15 original dramas among total viewers — more than any other network. Yup, Discovery noted it’s moved up three spots on the primetime total-viewer rankings, and Adult Swim gushed that it is basic cable’s No. 1 network in total day with younger viewers including 18-24, 18-34 and 18-49 and No. 1 in primetime among 18- to 24-year-olds. ESPN probably will contact us any minute now to point out that it climbed from last year’s 2.19 million viewers to 2.29 million in primetime. Among gainers, FXX had a lot to boast about, jumping 87% among adults 18-49 in its first full year as a rebranded, comedy-focused FX offshoot. It received a boost this fall from the arrival of The Simpsons reruns. Another cable network undergoing a revamp, TruTV, is struggling, down 31% from last year. Also posting a steep decline was A&E, down 33%, as its flagship series Duck Dynasty fell from its astronomical ratings highs.
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But the big story for cable TV, as 2014 draws to a close and ’15 gets rolling, is that, for the first time ever ratings have, for the most part, fallen significantly — potentially cooking the media industry’s cash cow. Primetime Live+7 numbers for the core 18-49 audience are down 8% vs. last year. And the damage is being felt virtually everywhere, with few exceptions, mostly among news and sports channels.
Bernstein Research’s Todd Juenger says it’s a “crisis” for U.S. media companies, and largely their own fault. By syndicating some of their most popular shows to online services, led by Netflix, they’ve encouraged viewers to leave the traditional TV ecosystem. “Audiences for ad-supported TV are moving, quickly, to non-ad-supported platforms; right at the time when brand-building advertising opportunities on the Internet are, rapidly, getting bigger and better, ” the analyst said this month. (The defection could begin to look like a jailbreak, as services including HBO, CBS, Showtime and Dish Network offer cable subscribers opportunities to entertain themselves without spending + per month for lots of channels they don’t watch.)
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Others, however, insist the outlook is far less bleak. Part of this year’s decline, optimists say, is due to Nielsen’s decision to include broadband-only homes in its ratings samples — which means we aren’t making apples-to-apples comparisons with last year. Network execs also criticize Nielsen for failing to count the growing number of people who watch TV on their smartphones and tablets.
And then there’s time-shifting, especially as people with DVRs watch shows beyond the three- and seven-day periods typically used to determine the ratings. Total viewing “has been largely stable during the past three years as lower live viewing has been mostly offset by the rise of time-shifted viewing, ” RBC Capital Markets’ David Bank says.
UBS Research’s Douglas Mitchelson also found that consumers “continue to leverage their DVRs and pay TV services such as Start Over and video-on-demand at greater levels every year. The Live+SD data stream does not capture the vast majority of this viewing.”
MoffettNathanson Research’s Michael Nathanson falls somewhere in between the two camps. Yes, there are short term issues at play, he noted in a widely read study in October titled “The Ship Be Sinking.” But there’s also an alarming long-term problem as digital media start to eat television’s lunch. “These issues will not likely be resolved overnight, ” he says.
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