The Myth of Cable Erosion

Broadcast Executives like to tell themselves a pretty fairy story. "Once upon a time in the magical kingdom of ABC, NBC, and CBS, all was right in the land. Until wicked, wicked, cable came along and destroyed viewership, fracturing it among a myriad of choices. Leaving the wise and good Network executives no choice but to offer Dancing the Stars and American Idol." This is of course, bunk. TVByTheNumbers.com (well worth your time), has excellent ratings data. Using Thursday, Sept. 23, 2010, the "Premier Night" for the broadcast networks, and the overnight ratings data supplied by TVByTheNumbers, I've put together the chart above. Now, its only one night. But it is premiere week, when most people watch, and clearly, cable does not matter. The "missing viewers" are not all strung out along a myriad of cable shows. They just aren't watching.


The relevant data (thanks TVByTheNumbers.com !) are here (for Broadcast Networks) and here (for cable). A few things stand out. MTV's Jersey Shore pulled 5.954 million viewers. College Football on ESPN had 3.52 million viewers (it started at 7:30 Eastern, 4:30 Pacific, I still put it in the 8 pm bucket), but othr than that, few shows pulled even 2 million viewers. "Its Always Sunny in Philadelphia," reputedly FX's big comedy "hit" (I use that term advisedly) did about the same as "the First 48" on AE or "Real Housewives of DC" on Bravo and less than Project Runway (3 million viewers) on Lifetime. Heck American Chopper on TLC had more viewers (2.225 million).

Methodology: shows on cable that ran long, I kept in the original East Coast time bucket (ala College Football on ESPN). I also average numbers, for the hour, in the case of half-hour comedies. So Big Bang Theory and Shit My Dad Says, for 8:00 and 8:30 PM, were averaged to get the hourly number. [Yes, it's called $#*! My Dad Says, CBS should have gone with the original title or another one, the fake-cursing is stupid.]

The biggest show of the night was "the Mentalist" with 15.33 million viewers, more than CSI at 14.57 or Grey's Anatomy at 14.04. After that it was Big Bang Theory and then Shit My Dad Says at 13.95 and 12.48 million viewers respectively. Vampire Diaries got 3.57 million viewers, Nikita only 3.22 million viewers, for the least amount of viewers, on what is supposedly the most watched TV night after Sunday. The Office got 8.4 million viewers, and Outsourced got 7.44 million right after it, nearly a million viewers less.

Again, Thursdays are the reportedly, second most watched night of TV after Sunday, and this was premiere week. The highest amount of viewers, between 9-10 PM, was only 54.381 million, including cable. That is less than the 60 million viewers the Beverly Hillbillies drew at their peak.

The CBS series starring Buddy Ebsen as the patriarch Jed drew up to 60 million viewers at its peak and ran until 1971.

Cable is not the problem. Indeed, the cancellation of Beverly Hillbillies and the "rural purge" conducted by CBS, more mindful of critics than profitability, in the early 1970's, seeking "young, hip, and urban" viewers even if it meant appreciably less of them, is the problem.

Click over on the source links at TVByTheNumbers.com. Hardly anyone really watches cable shows. Much of it, stuff not interesting to anyone. Jersey Shore is about the only show that actually draws any appreciable audience. The story of network Television is that of, really, American coffee roasters, or the Big Three Automakers. The coffee roasters, facing shortages of quality beans, substituted the low-quality robusta beans for high-quality Arabica. Result, generations of Americans ditched coffee, for sodas. Only the Starbucks revolution, using high-quality coffee and snob appeal, could partially reverse that trend. The Big Three, were even worse, offering cars of such poor quality that generations of Americans grew to prefer Toyota, or Honda, even though the quality gap has closed or even reversed (given Japanese over-expansion and poor quality on their own).

Bad TV drove away viewers. Yes, it is that simple.

Or to put it more elaborately, TV with little broad appeal pushed away older viewers, as youth was obsessively courted, in an aging nation with few youth having disposable income like the boom years of the postwar period. The baby boom of 1945-1965 was predicted to last forever. And it didn't. Further, men were pushed away, believing that women make 85% of all consumer purchases. Something that may have been true in 1955, but not today, with high rates of divorce, late forming families, chaotic cohabitation, and extended single-hood.

This was just stupid. There is a story at TVByTheNumbers.com (from the Hollywood Reporter) about an analyst valuing NBC at negative $600 million (-$600 million) and USA Network at $11.7 billion, SyFy at $6.3 billion, CNBC at $3.9 billion, MSNBC at $2.9 billion, Universal Studios at $4 billion, and finally Bravo at $2.6 billion.

It's just nuts. Think about it. What do the cable networks listed above do? How do they bring in cash? By viewers? Nope. The cable networks are in the business of extracting carriage fees, from satellite and cable providers. That's it. Even Jersey Shore is nowhere near say, the Mentalist, in numbers of viewers. The latter even outperformed 18-49 rating/share compared to Jersey Shore, 3.3/10 vs. 3.1/9. And that's the "class" of cable. The rest are eking out numbers in and around the one million viewer mark, or lower.

Making that business terribly vulnerable to people cutting the cord. No carriage fees, no revenue to NBC or now Comcast. Which is not putting more capital into faster cable networks, but rather, buying content and a broadcast network. The deal itself, to buy NBCU, is a massive vote of no confidence by Comcast itself in its core business.

Meanwhile, the business of broadcast networks is far less vulnerable. Viewers can get the signal for free (provided they have a converter box or a newer TV). Broadcast networks sell audiences to advertisers. That's a business model dating back to the 1920's and 1930's, and the old radio networks from which the television networks arose. Its pretty simple, like delivering good quality coffee at reasonable prices, or decent cars, both affordable and reliable. There is not anything mind-blowingly complex at stake.

IF Comcast can re-tool NBC's development system, and take the hits in making broadly appealing, all quadrant (young/old, male/female) oriented entertainment, creating a need for viewers to tune in, again and again and again, week after week, this might be a bet that pays off, not if but when cable fees collapse and people cut the cord. After all, it costs nothing to receive the broadcast signal. Comcast would have to endure several years of losses, though, in moving away from the highly segregated audience (basically younger women) that make up the, at most 54 million viewers at TV's broadcast/cable peak. In trying to attract more men, and older people, a goodly number of the current viewers will probably drift away, in the same way that remaking a restaurant chain known for high-end food into a broad middle market will have a period of losses, before the message is believed by the targets, and during which folks who liked it just fine without "them" hanging around, go elsewhere. Comcast may not have the stomach for it.

But its pretty clear that the valuations put on the cable networks are laughable. On the order of the $6.3 billion Guy Hands and Terra Firma paid for EMI. Like EMI, the business model (getting paid lots of money for being carried by cable/satellite providers) is falling to … consumer habits. In this case cutting the cord, in EMI's case, no longer buying much music (since so much of it was crap anyway). This makes the big bet that execs like Jeff Zucker put on cable as the winning hand, a losing proposition. Not even Comcast believes in cable anymore, otherwise they'd spend their money on it instead of NBCU.

Ironically, broadcast networks like NBC, or CBS, or ABC, or Fox, or even CW could be quite valuable. Why Warners has not simply dumped the Gossip Girl/Vampire Diaries dreck and used the network to run all DC superheroes, aimed at kids through adults, I'll never know. They own the characters. That's whole point of being a vertically integrated media company. Superman, Green Lantern, Power Girl, Hawkman, Dr. Fate, Captain Atom, Captain Marvel, W.I.L.D.C.A.T.S, Stormwatch, (and the rest of the Wildstorm characters), Icon, Static (and the rest of the Milestone universe) can be on TV, in movies, in games, on kids TV, in stores as toys, etc. Why wouldn't you do it? You own the characters! They don't make money for you sitting in moldy old comic books! Some are lame, some are classics, some are remembered still forty years on. Why not use them?

In the same way, with consumers under pressure, broadly appealing shows, creating "hooks" like the old radio and movie serials, can easily beat niche stuff. In terms of profitability. After all, the Superbowl hits 90-100 million viewers. Suppose you had a show that hit say, 75 million viewers per week. And other shows hitting around 40-50 million viewers, each week? How much money could you make? Lots. No, you can't have a Superbowl every week. But you can create emotionally hooking, broad based drama. Its been done before. Within living memory. On TV.

It's not as if cable is pulling in, even in aggregate, monster ratings. At best, cable takes off around 10% of people who might otherwise just watch network TV.

Broadcast TV is tremendously undervalued. Affiliate networks are not cheap, and providing entertainment that men and women, old and young, watch together, in the 40-75 million range is definitely possible, and very, very lucrative.

But, I think it is beyond the capacity of most creative people in Hollywood and definitely in TV. Supposedly, the best minds and most talented TV folks ever, have given us, Outsourced, the Event, and Undercovers. This is not even Supertrain or Pink Lady and Jeff level of bad. In some ways, it is far worse. At least Supertrain and Pink Lady and Jeff, along with Sheriff Lobo and BJ and the Bear, reflected an attempt to connect, however badly, with a broad spectrum of America, and entertain said spectrum. However badly it was done, it was still honest. This junk, and the rest, don't even bother to be broadly appealing. Its both elitist, and crap.

Elitist and crap. Its not cable erosion of audiences, or cheap reality shows, that make TV so bad. It is the writers, producers, and network execs who want both condescending moral lectures combined with niche appeal, all done badly.

The streaming revolution cannot get here soon enough.