Is Broadcast TV Dead?

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I really wanted to figure out a way to make FX turning 25 my biggest story of the week. Fox launched a cable channel that helped define the prestige TV era as much as any other twenty-five years ago tomorrow. (Decider had a good roll up of the top 25 that brought this to my attention.) That feels like it should be a bigger story.

Yet, birthdays aren’t really game changing news, even for the channel that brought us. It’s Always Sunny in Philadelphia, my favorite series on FX. My favorite episode for Hollywood in-jokes is “The Gang Tries to Win an Award” which utterly lampoons the Emmy voting process.

So let’s look bigger than one channel. Like at all of TV.

Most Important Story of the Week – TV Ratings Continue to Decline, in pictures

The TV ratings for the 2018-2019 season are in, so let’s summarize what happened. I have three takes that range from “this is bad” to “oh this is controversial ”.

Bad News/Uncontroversial Take – Broadcast Ratings are Down

Well, ratings are down again. And CBS is still on top. And NBC is on top with the key demo (18-45 year olds). On top, though, means just 8.9 million and 1.6 million people, respectively. Those numbers are pretty small compared to broadcast TV’s peak or even just fifteen years ago. Here’s my version of Deadline’s chart, showing this for the last three years:

1 Table Ratings Broadcast Season

Source: Nielsen, via Deadline

So ratings are down another 7% after falling 3% last year. This matches the annual declines I’ve been monitoring. Here’s the same measurements, but from January to December instead of the broadcast season. (I had pulled these last fall to make a point about CBS.)

2 Table Ratings End of Year

Source: Nielsen, via IndieWire

So two different ways to subtly measure the data, which both show declines. Also, I’ll bang on another point I made about CBS last fall. For the “old people network”, which is the stereotype, it has more young people watch it than ABC, and tied with Fox. So proportionally, yes it has more non-key demo viewers, but it has the same in total numbers. Does one of those things matter more than the other? Maybe, maybe not.

Learning Point – TV Series are declining, but winner still takes all

Every year Michael Schneider does a list of the top 100 shows on cable and broadcast. I love reading through this list. Here’s the top 14, for example:

3 Image Top 14

Source: Nielsen, via Variety

I love it even more as further proof of my favorite learning point, which is to show that TV is, like all entertainment, “winner take all”, meaning that most shows get hardly any ratings, while a few are monsters. Given that FX estimates that between basic cable and broadcast there were 300 scripted series, and that Schneider’s lowest rated series was Hell’s Kitchen with 4 million viewers, we could basically add 200 more scripted series that had under four million viewers. Doing that, here’s how the winner takes all economics look for the traditional TV bundle (with some assumptions for that extra 200 series.)

4 Table Count of Series by Viewership

Actually, since Schneider’s list includes reality and sports, who knows how many more reality shows were made last year? I looked and couldn’t find it. The point is it would make the winner-takes-all shape even sharper.

Potentially Good News/Controversial Take – Top TV Series May Be Getting Bigger

So the inspiration for this hot take comes from Axios’s (must read) media newsletter by Sara Fischer. Her take? Well, TV series finales are getting smaller. She called this TV’s moving goal posts. Here’s the image from her newsletter:

5 Image Axios Goal Posts

Source: Axios

Pretty damning stuff. But it seemed like it was really trying to tell a story about decline over time. To better visualize this, I took the data and put it in a scatter plot by year to see the story over time:

6 Table ratings by Year Live

Still pretty serious decline. Except something bothered me about it. I mean, I’ve been pretty deep into the Game of Thrones ratings lately. And everyone knows that a ton of people watch the series after it airs. With the latest data, Game of Thrones is getting 44 million viewers per episode. If you assume all those people watched within say a week of the final, then GoT is a top 6 show of this data set.

And this makes sense: with DVRs, multiple airings and digital, do we care about how many people watch a show, or how many happen to watch it live? This is always my thing about data: you have to know why you’re asking the question. And so I tried to update this table for all the series with DVR numbers. Along the way, I found this fun image showing DVR’s rise over time:

7 Image dvr-users-590x330

Clearly, the rise of DVRs killed the “live watch” of series finales. (Along with a stretch of not great broadcast series for finales.) But with the 2010 finales like Breaking Bad, Game of Thrones, How I Met Your Mother and The Big Bang Theory, a lot of people tuned in late. So I adjusted some of those series up if I could find the data, and dropped Will and Grace, which wasn’t a series finale, and had my own new data set. I also kicked up The Sopranos since it had delayed viewing and multiple airings too.

8 Table Ratings with DVRI’ll be honest, I had hoped with this table the trend line would be flat, or near to it. And it didn’t go quite that far. The trend for series finales is still…down.

So this take isn’t that hot. But look at the decline in the equation. Instead of series finales losing over a million viewers per year, now it is down to 700K viewers or so. If you pulled just the 2000s, the line would be flat. Yes, I had to make a ton of assumptions, but in the question of, “Is the monoculture dead?”, well I think Game of Thrones is a pretty good argument that one truly great show can still draw in a significant amount of viewers. I wouldn’t go so far as to say that the trend is reversing, but it’s flat. (The biggest shows on “TV” aren’t getting smaller anymore.)

Bonus Point: Eurovision Viewership Over Time

Since I mentioned Eurovision last week, how do their ratings look over time? Well, I found Eurovision ratings after I published last week. I’d say Eurovision ratings mimic Super Bowl ratings, if you read my weekly column on that back in February, in that they have some good variance year to year, but not the devastating decline of series ratings.

9 Eurovision Ratings

Source: EurovisionWorld

Other Contenders for Most Important Story of the Week

Hulu has 81 million viewers on 28 million accounts

Hulu has taken up Netflix’s PR strategy to drip out datecdotes selectively. The latest is that Hulu said 70% of its viewers watch via ad-supported plans, though that isn’t the same thing as saying 70% of their accounts are ad-supported. They use Comscore to separate viewers from accounts. If this data is true–always a question–then advertising will clearly have a role in our streaming/OTT futures.

CBS Airing The Good Fight on CBS

I forget some weeks to go to Josef Adalian’s writing and I usually regret it. So I was happy that last Friday I saw this article last week by him that CBS broadcast will air episodes of The Good Fight on Sundays this summer.

This frankly seems like a no brainer. You have multiple platforms (CBS broadcast, CBS All-Access) and a show that is a spinoff of a former CBS broadcast series airing on CBS All-Access…why not use all your platforms to maximize reach? I have two theories, neither of which speaks well of CBS, for why it took so long to happen:

Theory 1: CBS had infighting/disagreements between the broadcast team and the digital team. Not even necessarily vicious, but just people prioritizing their own businesses.

Theory 2: CBS saw that Netflix hasn’t distributed series on linear TV, so when in doubt copy the strategy of your competitors. Which means copying Netflix’s exclusivity for originals. In a bureaucracy, sometimes the safest course is to do what everyone else is doing.

I’m optimistic on this. This should be a great driver of customer acquisition for CBS All-Access. When you’re in growth mode, more eyeballs on great content is better.

Lots of News with No News

Let’s be honest. I enjoy writing this little section where I can snarkily dismiss a lot of big stories.

Viacom and CBS Prepare for Another Round of M&A talk. Again.

Viacom and CBS are the Ross and Rachel of M&A deals. They’ve been talking about talking about merging since at least 2016, so the news that they have a plan to discuss merging again in June is a lot of news without a lot of news. (By the way, if I were Amazon, I’d go after CBS aggressively, but that’s just me.) Also, to continue my analogy, the Lionsgate merger talk was the “Joey falls in love with Rachel” terrible plot from the last few Friends seasons.

Sprint and T-Mobile Deal Snag

The Justice Department seems to have made a bold antitrust call regarding cellular: having four companies control 90% of wireless communications is better for customers than having three controlling 90%. So with that determination, they’ve told Sprint/T-Mobile to spin off a new company. Of course, the DoJ hasn’t officially killed the deal–the DoJ is still advising and could always be overruled in court–and John Legere continues to stay at Trump’s hotel in Washington. Which may end up influencing the President. So again, some news without a lot of news.

Ent Strategy Guy Update – Obligatory Netflix Mention of the Week

Lucas Shaw at Bloomberg got a ton of great scoops on Netflix’s content library that will directly impact the streaming wars. Essentially, the question of the day–inspired by this Wall Street Journal article, this Hollywood Reporter survey, the ongoing Netflix/Office talk and dozens more articles–is how much the decline in Netflix’s content library will hurt them going forward. (And judging by the last quote in Shaw’s article, he thinks losing a lot of the library won’t hurt Netflix or slow subscriber growth.)

The key takeaway from Shaw’s reporting is that some of the most popular licensed shows on Netflix aren’t going anywhere soon. In many cases–like the current CW shows, which I mentioned two weeks ago–the series will be on Netflix for three seasons after their final season ends.

However, the key question hinges on how valuable the remaining licensed series are. As I’ve written before–actually, it’s just a few paragraphs up–the most valuable content isn’t just a little bit more valuable, but multiples more valuable. So the question for Netflix hinges on whether the CW shows are multiples more or less valuable than the Office/Friends TV duopoly (and other WB TV and Fox TV shows that left last year) or the Marvel/Pixar/Star Wars triopoly of Disney brands. Based on just Shaw’s data, well Friends and The Office accounted for as much viewership as the next four series combined.

(Also, if you like the biz of entertainment, Shaw’s weekly Hollywood Torrent newsletter is a must read.)

Long Reads of the Week

Dr. Steve Dittmore had a good piece in Athletic Director U unpacking some of the news about Sinclair buying Disney’s RSNs and the potential for those to be bundled into an OTT service, with other ramifications for the conferences. Particularly, he calls out some streaming channels in sports are also going FAST (free, ad-supported) as much as they are subscription, with examples like Stadium, which is part of Sinclair’s STIRR. Take a read.

The Entertainment Strategy Guy

The Entertainment Strategy Guy

Former strategy and business development guy at a major streaming company. But I like writing more than sending email, so I launched this website to share what I know.


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