Broadband Cable Association of Pennsylvania

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May 13, 2013

How do you follow up a broadcast television season with no breakout hits? Try harder.

On Monday, Comcast Corp.'s NBC and News Corp.'s Fox will each rent out posh Manhattan theaters to unveil their prime-time schedules for next season, kicking off a week of presentations to advertisers by broadcast and some cable networks ahead of the annual "upfront" ad sales negotiations. Walt Disney Co.'s ABC and CBS Corp.'s namesake network hold their presentations on Tuesday and Wednesday, respectively. The new shows to be unveiled-from a Michael J. Fox-led comedy on NBC to a legal drama called "Rake" on Fox-were drawn from the biggest pool of pilots in several years, media buyers said. Pilots are made by TV studios that produce the shows but are partly financed by networks.Numbers vary, but media-buying firm Horizon Media estimates that 104 pilots were made this season.

Development of such a big group of potential new shows is an indication of broadcasters' scramble to find hits as aging giants like Fox's "American Idol" lose viewers and traditional TV faces new competition from online outlets like Netflix Inc., ad buyers say."A few years ago, it seemed like they were managing for margin, not audience," said Todd Gordon, U.S. director at media buyer Magna Global, a unit of Interpublic Group of Cos., pointing to the previous trend of networks putting on less expensive prime-time fare like newsmagazines, game shows and reality shows. "That's just not the case now. They are spending the money to find hits and grow audiences." With the 2012-13 season nearly over, all of the major English-language networks have so far lost prime-time viewers in the 18- to 49-year-old demographic that advertisers covet. Only top-rated CBS-which had the benefit of the Super Bowl this year-managed to add total viewers, and only by 1.5%. (Spanish-language networks Univision and Telemundo both added viewers in the key demographic.)

In this fracturing television landscape, the bar for what constitutes a hit is getting lower-and blurrier. Billie Gold, the vice president of research and programming at media buyer Carat, said shows with ratings that would have once brought cancellation are now being renewed. And even though this season had a handful of new shows that did reasonably well, such as "Revolution" on NBC, "Scandal" on ABC and "The Following" on Fox, "there was nothing that hit it out of the park," she said. With high ratings harder to come by, networks sometimes look to other measures, like how well a show does on DVR playback among young people, or how much buzz it garners on social media, to make their decisions about what shows to bring back, said Brad Adgate, director of research at Horizon Media. "If a low-rated show can attract a difficult-to-reach audience that advertisers would pay a premium for, that would help a show," he said. Measuring TV viewing is also getting trickier as consumers increasingly watch shows on-demand, on streaming Web services and on mobile devices. There is no single metric to track the popularity of a program across all platforms.

Nielsen is testing a tool to measure online TV viewing in the same format as its traditional TV ratings, and the company is working on ways to measure tablet and smartphone viewing. Many network executives say the current ratings system doesn't give advertisers an accurate picture of how popular their programming is. To respond to the growing popularity of online television viewing, networks are also expected to tout their digital video savvy during this week's presentations. ABC, for example, on Tuesday will launch a service that will allow viewers to stream live video from certain local ABC stations online and on mobile devices, but it will only be available for people who are pay-TV subscribers. The move comes as major broadcasters are suing Barry Diller's Aereo Inc., which streams local TV stations' signals online without the networks' permission, a model broadcasters fear could endanger the retransmission fees they now get from pay-TV providers. The ratings slide has accelerated a loss of prime-time viewership share to cable that has been under way for years, according to Nielsen. Highlighting that shift: AMC network's zombie thriller "The Walking Dead" averaged more viewers this season among adults 18 to 49 than anything else on TV-broadcast or cable-according to the company. The show's season finale in late March drew 12.4 million total viewers, according to Nielsen. "All the networks are bleeding viewers," said Carat's Ms. Gold. "People are changing their viewing habits. They are moving to cable."

To compete, broadcast networks have been increasingly taking their cues from cable, known for edgy programming. NBC Entertainment chief Robert Greenblatt, the former chief of CBS's premium cable channel Showtime, has ordered 10 episodes of "Dracula" for next season, a show media buyers described as similar in structure and tone to a cable series. The series will star Jonathan Rhys Meyers, who had previously starred in Showtime's "The Tudors," one of the blood-and-skin-filled shows that helped make Mr. Greenblatt's name at the cable channel. Looking to cable also can bring risks. Mr. Greenblatt brought the musical drama "Smash" with him from "Showtime," where he had been developing it, and launched it to great fanfare on NBC-only to have it canceled.

Cable channels once relied on broadcast reruns for much of their programming, and still do to some extent. NBCUniversal's USA Network, for instance, this fall will start to air reruns of "Modern Family," a fixture of ABC for the past few years. In upfront negotiations in coming weeks, NBCUniversal's advertising sales chief, Linda Yaccarino, is expected to promote the show heavily to advertisers considering buying time on the cable channel, according to media buyers. Some media executives believe that this increasingly competitive landscape means that broadcast networks should rethink the cycle of show development, arguing that the current system of all networks racing simultaneously to develop, test and order pilots at the same time every year is chaotic and inefficient.

Chase Carey, president of Fox parent News Corp., told Wall Street analysts last week that the broadcast industry may need to rethink its current model of networks collectively backing and developing some 100 TV pilots, only to pick a handful to actually go to air. He pointed to how cable networks have long operated. (News Corp. also owns The Wall Street Journal). "What the cable industry does is take fewer bets and invest deeper and bigger in those bets to create [a] series," he said. The broadcast networks, he said, had been a "bit more stuck in historical practices...do you need to break some of those rules?...I think the answer is clearly yes." Wall Street Journal

Business leaders say Gov. Corbett was right when he said Pennsylvania employers are having trouble finding prospective workers who can pass a drug test. That was the consensus among members of several business groups who held a conference call last week to discuss challenges facing companies with open positions, according to the York Dispatch. Taking part Thursday were the Pennsylvania Chamber of Business and Industry, the Pennsylvania Business Council, the Pennsylvania Manufacturers' Association and the National Federation of Independent Business. "What the governor said is absolutely valid," said chamber president Gene Barr. Federation state director Kevin Shivers said many employers are having trouble filling jobs despite the state's 8 percent unemployment rate. "They don't have the skills, and drug testing is a problem," Shivers said. David Taylor, executive director of the manufacturers' association, said the issue is of greatest concern in the manufacturing industry, where workers may deal with volatile chemicals, bladed instruments, extreme temperatures and other potentially hazardous conditions. Associated Press

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