NIELSENWAR: This Revolution Is Being “Televised”

• Tweet
• Email

• Tweet
• Email

Over the past few days, in the lead-up to the gala Upfront ceremonies that will begin with NBC’s presentation to advertisers and the world on Monday morning, there’s been a steady stream of announcements and leaks about which broadcast network shows are being cancelled, renewed or picked-up to series.  For decades, that news was the center of the home entertainment universe.  But for all the excitement (hey, Rob Lowe, John Stamos and The Muppets are back!  Surprise:  more superhero hours!), it’s clear that the more important news has been happening off those stages–the transformation of what we call “television” itself, even though its content is increasingly being watched on other devices.  Here’s some of what’s been going on:

• The Mindy Project, canceled by FOX, is in discussions with Hulu about a (potentially multi-year) transfer to digital media, which would put it on a list that includes The Killing, Longmire and Community, among others.
• Every one of the 6 dramas picked up by ABC is produced by its own in-house studio, and ABC Studios is at least a co-producer of each of the network’s 4 new comedies (FOX and CW are similarly packed with home-grown programming, while NBC and CBS have spread the wealth a bit more widely)
• NBC has announced that all 13 hours of its upcoming Aquarius will be posted online for binge-watching on the same night that the first 2 hours premiere on the network.
• CW renewed virtually every show on its air (and one of the few exceptions, Hart of Dixie, is dead mostly because star Rachel Bilson didn’t want to continue with it), at least part of the reason being that shows currently on its air are reportedly included automatically in the network’s Netflix streaming deal.
• This past week, the preliminary ratings for The Voice fell to 1.9 for the first time (the show later recovered a precious tenth in final numbers), and the season finale of The Big Bang Theory was down approximately 25% from last year’s finale.

The times, they’re not a-changing:  they’ve a-changed.  By this point, everyone knows that viewers are addicted to watching home entertainment how and when they want, as the sources of quality programming seem to multiply daily, and the watching of commercials has become more or less optional.

With a diminishing number of exceptions (among them Big Bang, Modern Family, the early episodes of each cycle of The Voice, and of course the phenom Empire), broadcast television series no longer regularly get 18-49 ratings over 2.5–and it was barely a surprise when this week, series like Galavant and American Crime that have been below 1.0 received renewals.  More and more, broadcast networks are serving as loss leaders for their in-house studios, providing a platform for shows that break even at best on network advertising revenue (speculation is that the networks may be lucky if ad rates stay steady at this year’s Upfronts, and since audience numbers are steadily decreasing, if the rates don’t climb, revenues will go straight down).  Even many of the shows that have reliable ratings, like NCIS, Castle, and SVU can’t be providing their networks with much in the way of profits, because they have expensive cast and writer/producer costs even as their ratings erode.

“Follow the money,” we’re always told, and the money now is in SVOD, an acronym that no one knew 5 years ago.  It means Subscription Video On Demand, which is to say Netflix.  And Hulu.  And Amazon Prime (although that one is a bit weird, since it’s “free” with an overall Prime membership to Amazon in general).  And now the term also applies to OTT (over the top) versions of pay-cable networks like HBO Now, where as with traditional SVOD sites, members can pay a monthly fee and watch whatever they want whenever they want it, on multiple devices.  (Yahoo Screen is virtually alone in trying to make a pure advertiser-supported model work in digital media.)  While HBO and the upcoming Showtime site will only include self-produced content and theatrical movies licensed via enormous output deals, the rest of these services are grab-bags of programming, licensing shows and movies from all over the world in addition to the services’ original productions.  We know very little about the viewership of any of these individual shows, since the digital programming services keep their numbers to themselves–and really, the numbers they care about are subscription rates, not viewership of one series over another–but we know the services are voracious for content.  The giant checks they’re currently willing to write are keeping shows and thus studios afloat, and no one knows what will happen if they decide to cut their own costs.

What used to be considered the cart (international sales, post-broadcast ancillary rights) is now pulling the horse.   But the broadcast networks aren’t going anywhere, for financial and political reasons.  For the foreseeable future, they’ll still be the places with the most original programming per week, even if the quality and format of that programming may vary over time.  We’ll be taking a look at where these dinosaurs stand in the days before they announce their new fall schedules, as they try to lumber for position in the tar pits where they now find themselves.