The Show Must Go On

January 15, 2010 World Screen

As 2009 was drawing to a close, it was a little hard to get a good handle on the state of broadcast-network television in the U.S.

Most of the attention and big headlines were concentrated on NBC, but questions about the company also suggested more widespread problems in the industry.
 
First, the network’s decision to turn five hours a week of prime time over to the former late-night star Jay Leno for a relatively low-budget comedy-variety show seemed to suggest that it was getting too difficult to make money on the scripted dramas that used to occupy many of the 10 o’clock time slots.
 
Then, in December, when control of NBC Universal was acquired by the dominant U.S. cable provider, Comcast Corp­oration, the real prize seemed to be the various NBC Universal-owned cable channels, with the studio coming in second and the TV network coming in a distant third. (It was pointed out in several places that the 2,742-word announcement of the long-anticipated deal didn’t mention the broadcast network until word 2,170.)
 
Lost in headlines like “An Unsteady Future for Broadcast” in the November 21 New York Times and “NBC-Comcast Deal Puts Broad­cast TV in Doubt” in the December 7 Times is the fact that the four top U.S. networks are, collectively, having a pretty good season—at least better than the 2008–09 season.
 
“It’s better than last year,” says Brad Adgate, the senior VP and director of research at Horizon Media. “There are some hits across the board. They had a full year of development this season. Last year there was a lot of discontinuity with shows not being on for months and months. But I think it’s a blip and a slight one at that. The long decline continues.”
 
Adgate sees much of the improvement so far coming from FOX, which normally has been a weak performer in the early part of the new season. “FOX is really doing well this year,” he says. “Typically they’re kind of in a hole by the end of December and then American Idol comes on. This year, they are stronger in fourth quarter. I would expect once American Idol starts that FOX will again be the top network in adults 18 to 49 when it’s all said and done in May.”
 
Marc Berman, the media critic for The Programming Insider, is more upbeat about this season. “I think this is a turnaround season for the broadcast networks. You still have huge successes in scripted and non-scripted. You still have the CSI franchise, Desperate House­wives, Grey’s Anatomy, House, the reality shows. A lot of those shows are working. Late in November, you had football on NBC and the 2009 American Music Awards. Combined, the two shows brought in over 30 million viewers. You’re not going to get that same reach anywhere else. I’m optimistic. The audience still wants to laugh, to watch good dramas. There’s been a lot of stuff this season that’s working successfully.”
 
Robert Thompson, a professor of television and popular culture at the Newhouse School of Public Communications at Syracuse Univer­sity, says more current series are of a high enough quality to attract healthy audiences.
 
“If you put good stuff on the air, it doesn’t always work, but generally people will find it and watch it,” Thompson says. “We’ve had a slight but significant resurgence in half-hour comedies. Modern Family, Cougar Town and three or four new comedies have done well. Scripted dramas are doing OK, but there aren’t many breakaway hits. In some ways it does seem back to normal.”
 
Speaking from a network perspective, Jeffrey Bader, the executive VP of planning, scheduling and distribution for the ABC Entertainment Group, also points to the quality and appeal of new shows. 
 
“There are good programs on now, and that’s what drives ratings,” he says. “HUT [households using TV] levels have been pretty consistent. More people are watching television than ever before. The fact that the broadcast networks have as many successful shows as they do is a testament to the programming. The new shows that people are watching are high quality, high concept for the most part. V and FlashForward for us, and Glee on FOX, which is kind of high concept. Modern Family is working well for us, but I think it’s the quality that’s making it work.”
 
At the UBS Global Media & Communications Conference in New York last month, CBS Corporation’s president and CEO, Leslie Moonves, was typically upbeat. “Life is so much better for us than it was a year ago,” he told the investors’ confab. “I’m tired of reading how network television is down,” he said. “Network television still is pretty darn strong.”
 
QUESTIONABLE MOVES
The UBS conference also focused sharply on the Comcast deal. There and elsewhere in early December, network and Comcast executives stressed that NBC remains a big player in the network business.
 
Steve Burke, the COO of Comcast, who is charged with running the new entity, has deep roots in broadcasting. His father, Dan Burke, ran the Capital Cities TV station group that acquired ABC and later sold the company to Disney. Steve spent 12 years in various top jobs at Disney before joining Comcast in 1998.
 
At the UBS conference, Burke said it was a top goal to get NBC out of the ratings cellar. He added that NBC had a valuable role since many of the most popular shows on its sister outlet USA Network, the top cable network, came from NBC. The company sees a much bigger use of NBC for promoting its cable assets. “There is tremendous financial leverage in having NBC go from fourth to third to second to first,” he said.
 
A few days earlier, Brian Roberts, Comcast’s chairman and CEO, said in an interview on the cable business channel CNBC that while the deal for NBC Universal was cable-driven, the broadcast network was a big part of it.
 
“The future of broadcast television continues to be a big part of NBC Universal,” Roberts said. “NBC Universal’s success in cable, I don’t think, would be quite as great [without promotion on NBC]. Being part of a family of content is better than stand-alone.”
 
But Roberts made it clear that it was cable that drove the deal: “We feel strategically complete. [NBC Universal has] about 50-percent margins on their cable channels…. We don’t have the scale. We have wonderful brands. You put that together, you end up with a company where 97 percent of the new Comcast will be either cable operations or cable content, and these two do work together. It gives us scale in cable programming.”
 
That being said, he reiterated that the broadcast network is a big part of the picture and that the traditional network structure would remain. “We want to keep the affiliate structure. It’s been robust and successful for many years. All businesses change, but we believe that NBC is just fine. There’s more upside than downside. A lot’s been written and said about what’s happened in broadcast, particularly at NBC, but coming in at this point means there is more opportunity.”
 
Much of what has been written and said about NBC involves its decision this season to launch The Jay Leno Show at 10 p.m. Monday through Friday, a move openly acknowledged to be based on the relatively low cost of the show when compared with conventional programming.
 
Most of the criticism, though, has been more about the quality of the show than about the strategy.
 
“It’s not a good show,” Marc Berman says. “I think it’s one of the worst moves in the history of television. It’s a colossal mistake. They took what he was doing in late night and put it in prime time. If there is a lesson to be learned, it’s that you can’t do that. Late night and prime time are two very different day parts. The comedy is juvenile and it isn’t funny. Five nights a week of sketch comedy is a lot and it’s very hard to do. People sampled it in the first week and they didn’t come back.”
 
Berman is critical too of the rationale for the show. “The message was sent out that NBC’s biggest concern was saving money,” he says.“They didn’t do it because it’s a great competitive move. They did it because it was the easiest way to save money and fill the airwaves. [NBC has] a lot of rebuilding to do. Even if you move Law & Order: SVU back to Tuesdays at 10, chances are you won’t have the same size audience. They’ve alienated some viewers.”
 
Thompson, who teaches broadcast history at Syracuse, finds it especially poignant that NBC would abandon a time slot it has used to launch some of the best dramas on television. “During the 1980s, NBC matured television into a place where serious, artistic, visual expression could be had,” he says. “This isn’t just any network. The 10 o’clock slot included L. A. Law, Homicide, Hill Street Blues and St. Elsewhere, some of the most extraordinary, groundbreaking stuff. On the other hand, before Leno those slots were being filled by some pretty weak stuff.”
 
Indeed, in response to low ratings and mounting pressure from affiliate stations, which were concerned about the poor lead-in for their 11 p.m. newscasts, NBC announced this month that The Jay Leno Show would move to 11:35 p.m. following coverage of the Winter Olympics.
 
SEIZING THE MOMENT
ABC’s Bader is reluctant to criticize the Leno show, but he does say that his own network sees it as an opportunity. “We’ve been trying to build up our 10 o’clock for years and it has been a struggle for us,” he says. “Now Private Practice is doing very well at 10. And Castle. Brothers & Sisters does very well. If NBC had a prime-time drama there, would we be doing lower numbers? Absolutely.”
 
Adgate is also reserved in his comments because NBC is a Horizon Media client, but he points out that 10 p.m. is a difficult time period because of cable competition at that hour and because many viewers with DVRs play back earlier shows at that time.
 
“Cable suddenly has been very aggressive putting original series on at 10 o’clock,” he says. “They can get a little more gritty with their content, especially FX.”
 
These days, about a third of the households in Nielsen’s national people-meter panel have DVRs, and many users are playing back shows the same day they are recorded. “The 10 o’clock shows are competing against the 8 and 9 o’clock shows as much as they are with other 10 o’clock shows,” Adgate says. “It’s a tough time period in which to launch a drama that’s going to cost two or three million dollars an episode.”
 
While DVRs may be making the 10 p.m. hour more difficult, they are helping a lot of the 8 p.m. and 9 p.m. shows build their ratings, especially with the most attractive demographic, adults 18 to 49.
In that demographic, FOX showed the biggest DVR bump earlier this season, from an average rating of 2.39 (or about 2.5 million viewers) for its initial airings to a 2.71 rating (about 3.1 million viewers) when the three-day DVR playback results are added in.
 
ABC went from a 2.5 rating (2.87 million viewers) to a 2.81 rating (3.27 million). CBS went from a 2.62 live rating (3 million) to a 2.79 rating (3.2 million). NBC’s 1.79 live rating (2 million) increased to a 1.91 rating (2.19 million) with the three-day results.
 
Last month a survey of DVR ratings found that Grey’s Anatomy posted the largest DVR boost, 1.4 ratings points in 18 to 49, or 28 percent. Other big gainers in the seven-day playback period after airing were The Office, House, Big Bang Theory, V, The Mentalist, Private Practice, Glee, CSI and FlashForward.
 
THE RATINGS GAME
Ratings are measured four ways now—live, live plus same-day playback, live plus three-day playback (known as C3) and live plus seven-day playback. Advertisers buy on the C3 rating, which can be frustrating for a network executive. “I was looking at the second week of V,” Bader says. “Live plus same day I think did a 3.6, and it was a 4.6 [for], live plus seven. There’s a pretty large jump for some of our shows. Live-plus-seven ratings are dramatically different from C3. It’s fantastic that viewers are watching the show, even if it’s over seven days, but it’s a frustration because we need to figure out a way to monetize that. Advertisers buy C3. They don’t buy days four through seven.”
 
But after all the analysis of why the broadcast networks are having a pretty good season, the bottom line is based on what they are putting on the air, and this season many returning shows are strong and new series are managing to survive well into the fall.
 
“Modern Family is a very funny show,” Adgate says. “Community is pretty good. FOX has Glee and The Cleveland Show, which are not only doing well but are bringing in younger viewers, which is harder and harder to do in broadcast television.”
 
Berman for the most part likes what he sees. “If you look at the 22 shows that were launched, I would predict eight or nine or ten of them coming back next season, and that’s pretty positive. There are still some problems, but the good news is that people are still watching network television. It’s still the best arena to get the most number of eyeballs. The icing on the cake is that a lot of the new shows are working.”
 
Berman cites such shows as ABC’s Modern Family and CBS’s The Good Wife and NCIS: Los Angeles as strong first-season performers. “NCIS: Los Angeles is doing very well out of NCIS. That’s no surprise. The Good Wife is working. The CW is getting some mileage out of The Vampire Diaries. Glee is working for FOX. The main strengths of the prime-time lineups are the established shows, the CSI franchise, Grey’s Anatomy, Desperate Housewives, shows like that.”
 
Berman also notes that the so-called second season holds a lot of promise. “We have at least 14 shows that are returning at midseason,” he says. “Shows like Chuck, Friday Night Lights, Celebrity Apprentice, The Bachelor, Lost, Scrubs, American Idol, Hell’s Kitchen, 24. The networks are saving more stuff for midseason. I think it’s paid off. It’s worked very well for 24, American Idol and Lost. It gives the viewers something to look forward to.”
 
BRAND MATTERS
Adgate notes that franchises seem to be working. “If you had called NCIS: Los Angeles something else I don’t think it would have resonated as much with viewers,” he says. “In an increasingly cluttered environment, it helps brand the show. It gives an identity to the show. For the most part the CSI franchise has worked pretty well. [In November] they pulled a stunt where they all were on everybody else’s show. They combined the three shows together.”
 
In December, Lisa de Moraes, The Washington Post’s TV writer, rated the 22 new series as follows:
• Safe for the season: NCIS: Los Angeles (CBS), The Good Wife (CBS), FlashForward (ABC), Glee (FOX), The Cleveland Show (Fox), Cougar Town (ABC), Modern Family (ABC), The Middle (ABC), V (ABC), Community (NBC), Mercy (NBC), The Jay Leno Show (NBC) and The Vampire Diaries (CW).
• Tepid endorsement (additional episodes/scripts ordered): Melrose Place (CW), The Forgotten (ABC), Accidentally on Purpose (CBS) and Trauma (NBC).
• Awaiting verdict: Brothers (Fox).
• Dead: The Beautiful Life: TBL (CW), Eastwick (ABC), Hank (ABC) and Three Rivers (CBS).
 
That more than half the new series seem likely to last the full season makes this an impressive fall for the networks. The real question remains, though, that if network audiences resume their downward trend after this year and program costs continue to rise, how do the networks stay solvent?
 
Bader is one of many network executives to have given the question considerable thought. “Every­one’s schedule is a balance of expensive shows and shows that aren’t that expensive,” he says. “We know people come to broadcast television for high-quality programming. The bar is higher than for cable, and our audiences are [larger], but advertisers actually pay premium CPMs to broadcast because of the quality of the shows.”
 
The balance these days is mostly between reality and scripted shows, but Bader doesn’t anticipate a major swing toward more reality in the belief that it is cheaper. “Some alternative series are just as expensive as scripted dramas,” Bader says. “CBS is very good about having these procedural self-contained hours that they can repeat, which makes them much more financially responsible. For our serialized dramas, the bar is higher because they are really one-run shows. We repeat them but they don’t repeat at the same level as the procedurals. Alternative series like Survivor, Dancing with the Stars, Idol, they don’t repeat. They’re less expensive for the hour, but you only get one run out of it.”
 
In Bader’s eyes, NBC has gone too far in seeking a lower cost balance. “What I will say about Leno is that it doesn’t help network television for them to be doing that poorly five nights of the week at 10 o’clock,” he says. “We need NBC to be a healthy network to keep broadcast television healthy. ”