There’s been some focus in the media recently on the quickly crashing ratings on television network stations. Even cable is seeing a bit of a decline. A recent article in The New York Times focused on free fall of viewers on the big four networks in just the last four weeks. The focus was on the 18-49 demographic, who don’t seem to be watching TV live as much anymore. Spring ratings have always declined in the past, but this year seems to be greater.
A few days ago, The Wall Street Journal came out with an article on The CW analyzing their new policy to offer their TV programs online the next day after airing on their TV stations. While this has definitely bumped up viewing online, CW live ratings continue to fall. Here’s some of the very interesting points mentioned in this article:
- “Average prime-time audience watching CW shows on regular television is down 14% to 1.8 million, according to Nielsen data.”
- “This shift is partly by the network's design. Conscious that its target audience of younger people is spending more time online than older viewers, the CW has moved more aggressively than many other networks to put all its shows on the Web, and has been pushing advertisers to buy its ads online and on TV in the same packages.”
- “TV stations that pay tens of millions of dollars per year between them to broadcast the CW network.”
- The number of people watching TV at any given time of the day in the 18-34 age group has declined 3.3% in a year and 6.4% since the 2008-2009 season.
- Since the 2008-2009 season, the number of 18-34 adults using videogame consoles has increased 49%, to 1.2 million. Research shows videogame consoles are often used to watch video.
- Some affiliates have supported the move to put shows online next day, but others aren’t happy. Such a shift is threatening the traditional TV business model that these stations rely on to survive, and the CW needs these viewers as well. TV networks earn income through a small portion of consumers‘ cable bills, and that revenue goes away if people sign up for online services like Netflix instead. It also threatens advertising revenue because of less viewers.
- CW executives say most of their viewers still watch traditional TV. “...they expect the network to remain a broadcast network for the "foreseeable future." "The bigger danger is not allowing the consumer to watch video where they want to," said Rick Haskins, the CW's head of marketing and digital programs. "There's no point in putting your head in the sand and saying we shouldn't be encouraging the Internet use. That's already happening."
- The CW is earning revenue on deals with Hulu and Netflix (as are their parent companies Warner Brothers and CBS). Recent losses for The CW have gone as high as $100 million a year. The network is using the new revenue to develop new shows and show less reruns.
- The Netflix deal caused one big worry for execs within the CW parent companies. It could train a new generation to live without traditional TV altogether. The big online “payday” was too tempting to pass up though. “Executives also liked the idea of using the CW as a testing ground for "moving audiences back and forth" between the Web and TV, one of the people familiar with the internal talks said.”
So, could it be we as CW viewers are part of a new TV revolution? Can a multiplatform, multiscreen network survive long term? Heck, short term? The CW has always lost money, but the parent companies have been making good money on these shows thanks to international distribution and DVDs. Bruce Rosenblum also said last week at the conference that all of Warner Brothers’ existing two dozen shows were offsetting production deficits thanks to international sales.
(Read Bruce Rosenblum’s comments at the NAB conference here: http://www.variety.com/article/VR1118052763?cmpid=NLC%7CDailyHeadlines).
Advertising online though doesn’t generate anywhere near the revenue from TV ads and fees paid by affiliates. However, if that’s where the demand is, The CW must cater. Piracy is a very common problem online, and making the shows quickly available with ad supported viewing helps cut down on piracy.
What do you do though if you’re a CW affiliate and know that viewership is going to continue to decline with the new model? Actually, that question applies to all networks, not just The CW. The issue is just impacting CW affiliates harder now. Is the only way local television will survive is through rebroadcast fees with cable, satellite and telco? What if online viewing causes cable and satellite subscriptions to steadily decline? Local stations don’t get any of that online pie. I'm wondering if affiliaties for the larger networks are watching carefully to see how this plays out with The CW.
Everything presented is evidence that a lot of the loss in viewership is because people are watching online. Is that true though? The CW recently signed a TV measurement contract with Rentrak, which uses larger sample data and “is the only fully integrated system of detailed satellite, telco and cable TV viewing data commercially available.” The CW knows how many people are watching shows on their site as well as Hulu and Netflix. The assumption is the new data with Rentrak will more accurately cover the increasing trend of watching on DVR as well, and not just those programs watched on the DVR within a week. That could give the network a whole new arsenal of data that perhaps will give them an edge in selling to advertisers. Either that or they're determined to prove that Nielsen has been wrong all those years. Or both.
With all these articles, one question I have still hasn’t been addressed though. Are CW programs gaining viewers, or are their viewer habits just merely shifting? That’s the question that has no clear answer yet, and perhaps all this “shifting” is just smoke and mirrors to cover up the fact that audiences are indeed declining. Based on the info shared though, it sounds like that The CW is not losing viewers in the droves that the Nielsen live ratings indicate.
In the end television is a business, and you can’t blame Warner Brothers and CBS for trying to cash in on new trends. If it means shows like “Supernatural” and “The Vampire Diaries” continue to be made, more power to them.
So what do you think? Is this revolutionary thinking, the sign of a desperate network, or both?