As the major television networks prepare to unveil their new fall lineups in New York this week, they face threats from seemingly everywhere.
Prime time ratings for the big four broadcasters — ABC, CBS, NBC and FOX — together are dropping more precipitously than ever. Even their biggest hits, like “American Idol” and “Dancing With the Stars,” are fading fast.
Advertisers are moving more cash to cable, cutting into the networks’ quarterly profits. New technologies are making it easier to skip those ads, anyway.
That’s not all: There are more outlets for programming than ever, with Netflix and Amazon and dozens of cable channels competing for actors, producers and, most important, viewers. Government regulators want to take back some of the spectrum allotted to local television stations. And startups like Aereo are threatening to deprive the stations of subscription revenues, causing some broadcasters to talk of options that were unthinkable a few short years ago. Some have warned they might go off the airwaves entirely.
Goldman Sachs found last month that broadcast ratings in the critical 18-to-49-year-old demographic, the one most coveted by advertisers, fell by 17 percent in the winter months compared with last winter. Goldman Sachs called it “the sharpest pace on record.” While broadcast networks were setting record lows, cable channels were setting record highs; AMC’s “The Walking Dead” and the History mini-series “The Bible” regularly bested almost all the shows on network television while they were on.
At ABC, the lowest-rated of the four broadcasters, first-quarter profits fell 40 percent compared with the same quarter last year, but the network still made $138 million. NBC, on the other hand, lost $35 million in the quarter, because of lower advertising revenues. NBC’s parent, Comcast, said the network would have fared better if its biggest hit, “The Voice,” had been on in the quarter.
The CBS network is in some ways the exception to the rules, and a possible blueprint for its rivals. It is by far the highest-rated network, and this season it lost only 3 percent of its audience between the ages of 18 and 49. Last week the CBS chief executive, Leslie Moonves, predicted that the network would once again persuade advertisers to pay roughly 10 percent more for commercial time than they did this time last year. The reason, he said, was simple: “We pull together mass audiences like no one else can.”
To skeptics, CBS is merely winning a game of musical chairs that will end with no chairs left. Studio heads and series creators privately complain that the broadcasters have largely stuck with the same arcane production strategy they have employed for decades: commissioning dozens of pilots early in the year, rushing them to completion and then holding a bake-off that rarely results in new hits. Some predict that the networks will eventually start cutting back on the number of hours a week they program with new shows.