The Sternberg Report: Upfront

Upfront

03/08/2024

A Young Media Person's Guide to Evaluating Pilots (June 2023)

In a series of upfront presentations to advertisers, media agencies, and the press, the broadcast networks recently unveiled their respective primetime fall TV schedules. I’ve just started the process of reviewing the new series pilots for my annual predictions of hits and misses. The purpose here is to provide some insights into what to look for when evaluating the success potential of a new show. In the 40 years or so I’ve been analyzing the television landscape, the benchmark of success for a new broadcast series has continually shifted, with the bar gradually getting lower and lower.

Before discussing how to evaluate new series pilots, here’s some historical perspective.

In the 3- and 4-network world of the 1980s, as cable was just starting to impact the broadcasters, if a new show didn’t generate at least a 30 household share (something that is virtually impossible today for a regular series), it was considered borderline – even if it won its time period. Although back then, if a network believed in a show it would often be given time or moved to a new time period to see if it could find an audience. One network was usually so far ahead or behind the pack that giving a show a network head of programming (or his spouse) liked more time to grow had little downside.

With a couple of notable exceptions, this was the last decade of broadcast dominance, when a low-rated fall series could actually become a word-of-mouth hit over the summer (when the networks would typically air reruns of the entire season), or win an Emmy and the following season see its ratings surge. Miami Vice (1984-89) got low ratings during its first season, but became a hit over the summer, as its MTV-style soundtrack and fashion dominated entertainment TV shows and magazines. Hill St. Blues (1981-87) might have been canceled due to low viewership if it hadn’t won multiple Emmys and received a subsequent ratings boost. Cheers (1982-93) premiered as the lowest rated show of the week, but finished its 11-year run in the top 10 (had it debuted today, we might not have seen a second episode).

During the 1990s and early 2000s, as three networks grew to four, and then six, and cable began luring away broadcast viewers, a 20 share or a strong demographic performance was good enough for a show to be renewed. Fox had become a major force, appealing to younger viewers with shows like Married..With Children (1987-97), Living Single (1993-98), The X-Files (1993-2002), and The Simpsons (1989-present). While not doing nearly as well as the Big Three networks among households and total viewers, it did among viewers 18-34, and eventually started competing among adults 18-49.

The fledgling WB and UPN networks (since combined into the CW) had different and much lower metrics of success – they were all about the under-35 crowd, with UPN also focusing on Black viewers (whom research was showing watched significantly more network television than non-Black viewers). Referred to at the time as “emerging networks,” both had successes with shows like WB’s 7^th Heaven (1996-2006), Buffy the Vampire Slayer (1997-2001), and Dawson’s Creek (1998-2003), and UPN’s Malcolm & Eddie (1996-2000), Moesha (1996-2001), and Girlfriends (2000-06).. They were able to thrive with ratings that might have led to quick cancellation on the Big Four networks.

On the traditional broadcast networks, average ratings were no longer what they were during their heyday, but blockbuster hits were still possible. Shows like Roseanne (1988-97), Friends (1994-2004), ER (1994-2009), and NYPD Blue (1993-2005) were not only hits right out of the gate, but also buoyed other shows on their network airing on the same night – lead-ins were still important and created so-called “time-period hits” (such as anything on NBC Thursday at 8:30 or 9:30pm) or ABC on Tuesday..

During this time, it was still possible (although not as common as in previous years) for a low-rated show to build into a hit. Seinfeld (1989-98) was a modest mid-season entry for three seasons before finding a home on Thursday, while Everybody Loves Raymond (1996-2005) was a weak performer on Friday night before being moved and finding success on Monday. Neither would have lasted more than a single season today.

Throughout the late 1990s and 2000s, as cable started airing more original scripted series, ratings and shares became less significant as an indicator of success. Rankings became more telling. Finishing first or second in a given time period, ranking reasonably high among certain age groups, doing well relative to its network’s other programming, and holding onto a decent portion of its lead-in audience, all factored into whether a new show would make it to a second season or beyond. Whether a network owned the show also started to carry more weight when it came to deciding which shows to renew, since the networks made their real money when a show it owned accumulated enough episodes to be sold in the syndication after-market.

Ad-supported cable shows like The Shield (2002-08), The Closer (2005-12), and Sons of Anarchy (2008-14) and premium cable series like The Sopranos (1999-2007), Sex and the City (1998-2004), and The L Word (2004-09), drew many viewers away from the broadcast networks, and changed forever what was acceptable to show on series television – and what was considered a success on broadcast TV. Only a few broadcast shows, such as The Big Bang Theory (2007-19), were still given time to find an audience – it finished its first season in 68^th place but ended up being the longest running multi-camera comedy ever, with 12 seasons. But most shows that didn’t start out with decent ratings were quickly axed.

In the 2010s, more people started owning DVRs and multi-media devices, and streaming platforms started to grow, as definitions of success became even more nebulous – receiving a solid audience bump in delayed time-shifted viewing and having a strong social media following, became factors contributing to whether a new show was perceived as successful.

Glee (2009-15) became the first internet-driven success, premiering to modest ratings in May following the American Idol finale, but becoming a hit the following season after clips from the show, including its great musical sequences, went viral over the summer. In 2013, Netflix’s House of Cards became the first major streaming hit, as “binge viewing” entered the media lexicon – and foreshadowed further declines in ad-supported TV viewing (for both broadcast and cable).\

How to evaluate the success potential of a new series, however, has not changed all that much over the years. But how long a new show is given to reach that potential has. Today, the network races are closer than ever, with tenths of a rating point often separating first and fourth place. When broadcast networks care more about rankings than growing their audience, potential is sacrificed in favor of anything that might immediately do even slightly better.

The broadcast world today is much different and more splintered. There are no NBC Thursday night “Must See TV” lineups anymore, when they could throw anything in the 8:30 or 9:30 slot and get a solid rating. There are no 30+ share programs or time periods anymore. A strong lead-in, while still valuable, is not nearly as significant as it used to be. A good show can succeed anywhere and a bad show can flop anywhere. The concept of “least objectionable programming,” a phrase with which people under 40 are probably unfamiliar, no longer applies.

Being able to evaluate a new show’s success potential based solely on the pilot episode is more important than ever. Here are some guidelines:

Comedies should be funny because of the characters, not the plot. When I used to give new season presentations to clients and our media agency staff (when I was head of TV research at Bozell, TN Media, and MAGNA Global), I compared the differences between the two funniest pilots I ever saw – The Famous Teddy Z (1989) and Golden Girls (1985) – and why one was a long-running hit, with 180 episodes spanning seven seasons, while the other only aired 20 episodes before being canceled.

For those who don’t know the show, The Famous Teddy Z starred Jon Cryer as a lowly mailroom clerk at a talent agency. Through a bizarre sequence of events, he becomes the top talent agent at the company. The pilot was hilarious. The problem was that by the second episode it was a different show. The events that made the pilot so funny no longer existed, and the show couldn’t be maintained on a weekly basis.

I remember watching The Golden Girls at the NBC Upfront in the days when the networks showed a some full pilots during their upfront presentations. People were literally falling out of their seats laughing. But I don’t remember anything specific that happened. I think it was mostly just four women sitting around a table talking. It was funny because the characters gelled and were funny together, not because of anything that happened in the pilot. There were many other hit comedies since then that fit into the same category – from Roseanne, Murphy Brown, and Seinfeld in the late 1980s/90s, to Home Improvement, Frasier, Living Single, Friends, and Everybody Loves Raymond in the 1990s, to The Office, 30 Rock, The Big Bang Theory, Modern Family, and Parks and Recreation in the 2000s, to Abbott Elementary and Ghosts in the 2020s.

Viewers of these shows look forward to watching slight variations of the same situations week after week – because they like the characters, not the plots.

Questions worth asking when evaluating a comedy pilot – did some specific event happen in the pilot to make it funny? Is it a romantic comedy where the two main characters meet and fall in love during the pilot? Is it a “fish out of water” comedy where the main character returns to his or her small home town after years of having a career in the big city? Does some poor schlub somehow strike it rich or get some major promotion at work? Does someone not ready for a family inherit his or her sibling’s kids? You get the idea. By the second episode, these plot-driven comedy pilots often become substantially different shows. What made the first episode so funny, no longer exists. So, even if these pilots are hilarious, you need to look more deeply to determine whether you think it can be maintained on a weekly basis. Perhaps the most important question of all is do the supporting actors stand out and do they have chemistry with both the main star and one another?

What will a drama’s third episode look like? Does the pilot make a good one-time movie, or will it work as a weekly series? Some of the things you look at to predict comedy success apply to dramas as well. Are there specific guest stars or events in the pilot that drive the story but won’t be there by the second episode? Medical, police, or legal dramas can seem compelling based solely on the cases presented in the pilot episode. We need to consider the potential strengths and charisma of the lead and supporting characters, and ongoing themes of the series beyond the pilot’s script.

Sometimes it is considerably more complicated. For example, I pegged ABC’s The Good Doctor as one of the best medical drama pilots I had ever seen. The characters were strong, and the direction the show was headed seemed clear. It was able to maintain the quality of the pilot from week-to-week and became one of the highest rated shows on television. The same season, I said ABC’s For the People was one of the best legal drama pilots I had ever seen. The characters were strong, and the direction the show was headed seemed clear. It couldn’t find enough viewers and was canceled after its second season.

Most legal dramas focus on either the prosecutors or the defense lawyers, giving viewers a clear side to root for. For the People presented both the prosecution and defense lawyers as essentially equal sides, with some winning their cases one week and losing them the next. It just seemed to me that would not have as broad an appeal. One additional factor in my projections was that a legal drama like For the People typically appeals to an older audience. Many of these viewers prefer shows that focus primarily on the characters’ work lives (as most procedural dramas do). When a show centers just as much on the characters’ personal (i.e., sex) lives, older viewers tend to shy away.

Another important indicator is that ABC had other programming in the same genre as The Good Doctor, making it easier to promote the new show (given the ridiculous policy of not cross-promoting broadcast series on other broadcast networks). For the People did not have similar programming on ABC – it also debuted in March, which often makes a show harder to market, particularly if a network gives its promotion short-shrift.

Procedural dramas are a lot like sitcoms. They’re essentially situation dramas. Does the cast gel and will viewers want to tune in to slight variations of the same situation week after week? These can be telling when you compare successful procedurals and their spin-offs. The differences between the excellent Criminal Minds and the failed Criminal Minds: Suspect Behavior and Beyond Borders, or the original CSI and the short-lived CSI Cyber are dramatic (and demonstrate the importance of good casting – CSI: Miami and CSI: NY were both successful). All of the NCIS’s, on the other hand, managed both the casting chemistry and the mixing of drama and humor quite well (and all were hits). FBI, FBI: Most Wanted, and FBI: International are all succeeding. 911 and 911: Lone Star are both hits. Law & Order: Organized Crime successfully joined that franchise. In today’s splintered viewing environment, with linear TV on the decline, extending successful franchises is as close to a sure bet as you can get.

It typically takes three or four episodes before a drama settles into its regular audience level. New CBS dramas tend to get higher viewer sampling – its audience base is the most network-loyal, and they typically check out any new CBS procedural. So it sometimes takes a new CBS drama longer to hit its regular performance level.

Shows make stars, stars don’t make shows. The failed TV series with major stars attached are too numerous to list here. Who remembers Hugh Jackman in Viva Laughlin, Halle Berry in Extant, Octavia Spencer in Red Band Society, Katherine Heigl in Doubt, Kyra Sedgwick in Ten Days in the Valley, or Edie Falco in Tommy? Just a few examples.

In most cases it’s the show that makes the star, not the other way around. Hit shows, ranging from comedies such as, Cheers, Friends, Seinfeld, Married…With Children, Everybody Loves Raymond, Modern Family, The Big Bang Theory, and Abbott Elementary to broadcast dramas such as, E.R., The X-Files, CSI, Grey’s Anatomy, Empire, and This is Us, to cable dramas such as The Shield, The Closer, Mad Men, Breaking Bad, Sons of Anarchy, The Walking Dead, and Game of Thrones, were cast largely with actors who were not well known to the general public at the time.

Some stars, such as Tom Selleck (Blue Bloods) and James Spader (The Blacklist) can bring long-time fans to a new show (and usually appeal to an older audience), but they are the exception. Kathy Bates might fit into this category with CBS’s new legal drama, Matlock.

Broadcast TV series based on theatrical movies generally don’t work. There are a few major reasons for this. Movies are typically designed as a single two-hour contained event, not an ongoing series (unless it’s a Marvel, DC, or other action/sci-fi franchise). Successful movies bring high expectations, which the television version seldom meets. There are also lesser “stars” associated with the TV show than were in the movie.

Between 1971 and 2023, the broadcast networks aired 68 television series based on or adapted from theatrical movies. Only 12 lasted three seasons or more – M*A*S*H (1972-83), Alice (1976-85), House Calls (1979-82), Private Benjamin (1981-83), In the Heat of the Night (1988-94), Buffy the Vampire Slayer (1997-2003), Clueless (1996-99), Friday Night Lights (2006-11), Parenthood (2010-15), Nikita (2010-13), Hannibal (2013-16), and Lethal Weapon (2016-19). That’s an 18% success rate, significantly less than the 32% rate of the average network series.

During the 2016 and 2017 seasons, there were an unprecedented eight new series based on movies. Only one, Lethal Weapon, was even moderately successful (it was canceled due to on-set turmoil rather than low ratings). The others, Uncle Buck, The Exorcist, Rush Hour, Taken, Frequency, Time After Time, and Training Day did not last long. Since then, there has been only two, CBS’s Clarice, in the 2020/21 season and True Lies in 2022/23. Both were canceled after a single season.

Reboots typically don’t work – unless they do. There have been many reboots of successful and not so successful TV shows over the years (roughly one-third of them have succeeded – similar to the success rate of all primetime series). Both the positives and negatives are fairly obvious. On the plus side, reboots are pre-sold concepts that don’t require the same amount of promotional weight as a completely new series to generate awareness. They also tend to receive a fair amount of pre-season buzz. Most will get decent viewer sampling, so if they’re good, they have an above average chance to succeed. On the down side, they tend to carry high expectations, which are often hard to meet. Also, younger viewers are often unfamiliar with the series, and older viewers, who liked the original, are often disappointed with the new version.

Popular shows that come back with the original casts can do quite well (see Dallas, The X-Files, Will & Grace, The Conners, and Night Court). Murphy Brown, on the other hand, didn’t perform well and was canceled after a single season. Reboots with new casts (e.g., Bionic Woman, Ironside, Dragnet, Charlie’s Angels, Melrose Place, 90210, The Odd Couple) often can’t match the original (particularly if the original had iconic casts) and often don’t last long. There have been notable exceptions. Hawaii Five-0, Magnum P.I., and The Equalizer were all hits, while Charmed, Walker and Kung Fu (the latter two reboots in name only) did well by CW standards.

So how do you know if a reboot with a new cast will work? You don’t. You need to evaluate them just as you would any other series in that genre, at the same time realizing that it will probably get an above average viewer sampling.

Pilots often look better on your laptop than on your TV. Over the years I’ve watched pilots at the broadcast networks, in a conference room at work with media buyer and research colleagues, on VCRs and then DVDs at home, and these days online on my laptop. I watch them at my leisure with no commercials, no multitasking, and no distractions. Sometimes I stop in the middle and finish watching it later.

When the show premieres on television, of course, it will air following some other show, opposite some other showss, and most viewers will simultaneously be doing some other activity. Just because you like the pilot, doesn’t mean you (or other people) will watch it in a real-world setting. Despite the high degree of DVR and time-shifted viewing that currently exists, scheduling and the competitive landscape are still important to a new show’s success.

Don’t buy the buzz. For some time now, I’ve been releasing an annual issue The Sternberg Report titled, Does Pre-Season Buzz Really Matter? It examines new broadcast and ad-supported cable series over the past 25 years, and concludes there is virtually no correlation between how much pre-season buzz a new show generates and how successful it becomes once it premieres. Social media conversations often provides a good indication of whether a show is poised to grow or decline after it’s already on the air but has little impact before the show debuts.

If you are interested in getting the Pre-Season Buzz issue or any other issue of The Sternberg Report, contact me at [email protected].

Most big hits are accidental. My track record of predicting new series hits and misses is pretty good. Roughly 9 out of 10 shows I think will flop do (it’s much easier to pick a miss than a hit). I’m also not bad at projecting which shows will win their time periods. But the big-time hits almost always come out of nowhere (not counting spin-offs, reboots, or franchise extensions). Anyone who tells you they predicted E.R., NCIS, The Simpsons, Empire, Smallville, or The Big Bang Theory would be blockbuster, long-running hits, is simply lying. You just never know what is going to connect with a broad spectrum of viewers. The next This is Us is perpetually right around the corner. But we won’t see it until after it debuts. It’s one of those things that makes this business often exciting, sometimes frustrating, and always interesting.

Posted at 11:38 AM in Research, Television, TV Programming, Upfront | Permalink | Comments (0)

03/14/2023

Nielsen Alternative Audience Measurement Not Ready for Primetime (and may never be) 2/23

When it comes to national television measurement used for the buying and selling of commercial time, Nielsen is an industry-mandated monopoly. While potential competitors have periodically emerged, they failed to sustain enough support to survive – not necessarily because Nielsen did anything to impede them, but because advertisers and networks have been unwilling to pay for multiple sources to provide similar national TV audience data.

While there have been occasional calls for change, the industry’s unwillingness to support any real competition to Nielsen, along with networks and media agencies continuing to sign long-term Nielsen contracts, make the status quo is hard to budge.

Why Alternatives to Nielsen Have Failed to Sustain Support

There have been numerous unsuccessful attempts by other companies to compete with Nielsen, both on a national and local level. The most common result has been occasionally pressuring Nielsen to make improvements to its own methodology and increase its sample size.

Here’s a brief look at the most notable attempts to compete with Nielsen.

1985: After more than 30 years of being essentially unchallenged in the national TV audience measurement arena, British company AGB entered the game and posed the first real threat to Nielsen’s dominance. It had been using something called people meters in Europe, and saw an opportunity to expand into the U.S. market. AGB had the advantage of actually using a better methodology than Nielsen’s antiquated meter/diary approach.

AGB spent nearly two years testing its people meter in Boston before trying to roll it out nationally. Nielsen responded by launching its own people meter, and increased its sample from 1,200 to 2,000 homes (to match the size of AGB’s sample). The following year Nielsen increased its sample to 4,000. As a result, AGB failed to sustain industry support and ceased its U.S. operation in 1988. The main problem was that ad agencies were not willing to pay for two identical national measurement services, and most of the networks were not willing to support a new ratings system that did not report higher numbers than Nielsen (I believe at the time only CBS and MTV were willing to go forward).

1987: D. Percy & Co. developed a passive meter, which used a heat-sensitive, infrared device to detect when someone was in front of the television set and when someone left the room. But when people found out that the heat sensors could be thrown off by the presence of a large dog, jokes ensued, and any potential support fizzled. Nielsen announced its own plans to develop a passive meter, which never went beyond the testing phase.

1991: Arbitron’s ScanAmerica was way ahead of its time as it tried to marry TV viewing to product usage (sample participants were asked to run a “scanner wand” over the product code on each store-bought item). Single-source data was considered the holy grail at the time, and this approach seemed to be what advertisers had been seeking. But a lack of belief in the methodology, the limited number of “scannable” items, and an unwillingness to invest in an unproven system in a faltering economy, resulted in ScanAmerica shutting down only a year after being introduced. Had ScanAmerica come along a few years later, when the economy was back on track and other viewing sources were cutting into network ratings, it might have received more interest.

1993: Arbitron, which had been competing with Nielsen for four decades in collecting local TV ratings (in roughly 200 markets), canceled the service. Local stations, which had been forced to subscribe to both Nielsen and Arbitron to accommodate advertisers and their agencies, who were more or less equally divided among the two services, were under increasing economic pressure from cable and other competition. It no longer made financial sense for them to support two essentially identical rating systems. Nielsen, which already had a lock on national TV measurement, won the day. Nielsen acquired Arbitron (renamed Nielsen Audio) in 2013.

1993: The broadcast networks tried to develop a rival rating service, SMART (System for Measuring and Reporting Television), with a new people meter provided by Statistical Research, Inc. (SRI). But they couldn’t get the necessary ad-agency support and it never got beyond the “media lab” stage (I thought at the time SRI did great work and provided valuable insights). It folded in 1997.

2007: erinMedia’s plan to launch a new national ratings system to collect and process viewing data from set-top boxes was derailed when Nielsen announced it was forming a new unit called DigitalPlus to essentially do the same thing (which caused erinMedia’s funding to disappear). In 2005, erinMedia had filed an anti-trust lawsuit against Nielsen Media, which was confidentially settled in 2008.

ComScore, which merged with Rentrak in 2016, stands as the only real competition to Nielsen – primarily with local TV stations. Most major media agencies, networks, station groups, and streaming services subscribe to some level of ComScore data.

So, when it comes to national television audience measurement, Nielsen remains a virtual monopoly, albeit an industry-mandated one. Nielsen ensures its monopoly status, with its clients’ approval, by continually signing long-term staggered contracts with networks and media agencies. This means any fledgling measurement company cannot actually replace Nielsen, but must operate side-by-side (at least for several years). Since the industry has long been loath to support two essentially identical rating services, particularly for national currency measurement, Nielsen has continued to operate largely unopposed.

When Nielsen Has Been Forced to Improve TV Measurement

There have be only two instances, more than 20 years apart, when Nielsen was forced to overhaul how it reported television audiences – in 1987, when the switch was made from the antiquated household meter/diary system to national people meters, and in 2009, when DVRs and time-shifted viewing led to the shift from program ratings to average commercial-minute ratings (C3).

In 1985, when AGB, which had been people meters in the UK, tried to introduce them into the U.S. market, this represented the first time a real threat to Nielsen’s dominance emerged. Even Nielsen had to admit that this new electronic measurement system was far superior to its own meter/diary system, which had considerable human bias attached to it – the highest rated networks and programs, as well as shows airing multiple times per week (daytime, early morning, evening news, late night, syndication) benefited when people manually filled out diaries at the end of each week. Recall tends to favor the most popular and longer-duration programming. Nielsen was forced to develop its own people meter system.

In 2007, commercial avoidance through fast-forwarding had become one of the biggest advertiser concerns. DVR penetration among U.S. TV homes hit 20%, and measuring DVR playback and delayed viewing was now a priority. Virtually every study and survey ever done indicated that anywhere between 70% and 80% of VCR or DVR playback involved fast-forwarding through commercials. But there was no actual Nielsen data to prove it, and Nielsen’s national people-meter sample had just started including DVR homes. Nielsen was forced to report DVR playback (something it was never able to do with VCRs), which led to C3 (average commercial minute ratings up to three days after the original broadcast).

How these two fundamental changes were implemented shows how much the industry’s priorities have changed over time – the speed of change in the access to video content and in consumer behavior has caused good research to take a back seat to rushing new products to market.

There was a time when any changes to audience measurement needed to undergo extensive vetting before the industry would consider implementing them. People meters were evaluated by industry committees for nearly three years – including a full year of side-by-side data to compare it with the old meter/diary method – before agencies and networks decided to use it as marketplace currency.

Before switching from average program ratings to C3, however, little research was done into the methodology for measuring average commercial minutes. This was the first time that marketplace business concerns overrode the necessity for validating research methodology. It is also the moment that Nielsen shifted away from being a pure research company – at the following year’s national client meeting, Nielsen actually proclaimed that getting a product to market was now more important than validating the research beforehand.

Does Anyone Really Want More Accurate TV Audience Measurement?

The major impediment to improved audience measurement is that despite claims to the contrary, neither buyers nor sellers have traditionally wanted more accurate audience measurement. Sellers want higher ratings (so they can charge more for advertising) and buyers want stability (so they can project future performance). More accurate audience data is conducive to neither.

Sellers want higher ratings – you never hear any network complain that Nielsen is overcounting their audience (although for years it did). But every time I can recall reported television usage or network ratings declining suddenly, or for no reason anyone can pinpoint, they blame Nielsen and call for change. There’s a reason some networks pushed so hard for viewing in bars and restaurants to be included in currency measurement? Anyone who knows anything about viewing habits or audience measurement knows how absurd it is to think more than a small fraction of people in bars or restaurants watch and hear commercials. It’s all about higher reported ratings. When Nielsen was unable to report VCR playback, on the other hand, the networks were happy to continue using the artificially inflated numbers Nielsen reported (for about 20 years, until DVRs overrode the need to properly measure VCRs).

Any new measurement system does not provide higher broadcast network ratings than Nielsen, was not able to sustain major media company support. Today, however, with the major media companies owning linear and streaming platforms, losing broadcast viewers but gaining more viewers elsewhere may be more palatable.

Buyers want stability – accuracy is fine, but stability is required to be able to project future performance. Anyone who was in a media agency research group when the industry switched over to buying and selling based on C3 remembers the chaos that ensued during the upfront and for much of that year. There’s a reason that what was supposed to be a “one-year band-aid” is still being used 13 years later. Moving to more accurate commercial measurement would require not only additional staff, but would result in significantly less stable and projectable ratings.

Back in the days when there were relatively few viewing options, and most networks started and ended their seasons at the same time, there actually was a degree of stability to people’s viewing habits. Not so today. Traditional TV seasons, with new series debuting in the Fall and Spring, might still exist for the broadcast networks, but not for other platforms (or for viewers). Streaming services drop new seasons and new shows throughout the year, whenever they are ready, and not always at the same time as previous seasons.

Some streamers drop entire seasons at once, some two or three episodes before switching to weekly, and others use the broadcast network once-a-week model. When a new season of Stranger Things, or a new show like Squid Games or The Recruit premieres, for example, my viewing habits immediately change. I’ll binge a few episodes a night, and DVR my regular linear shows (which I’ll binge two or three weeks later). My viewing is not nearly as stable or predictable as it was 10 years ago, and much of my viewing would not be captured by Nielsen’s C3 (or C7) measurement.

And let’s not forget that agencies do not want to incur dramatically increased costs for improved ratings systems, or multiple currencies that would require significant spending for new or custom databases (and staff) without increasing their revenue.

Can Samples Still Adequately Measure the TV Universe?

The whole purpose of a sample is to be representative of the total U.S., with the idea that you and your demographic cohorts have similar viewing habits. Your cohorts are determined based on characteristics that Nielsen has determined impact viewing behavior – such as age, sex, race/ethnicity, presence of children, income, education, language spoken at home, etc. Also important is whether or not you have cable/satellite/telco (i.e., pay TV services) or DVRs.

In the past, broad platform mattered more than individual platform. In other words, whether or not you have cable does not require the sample being representative of every cable system, because that does not significantly affect viewing choices or behavior. Nor is it important to know what type of DVR you have, since that will not substantially impact your delayed viewing, or how much you fast-forward through commercials.

Whether or not you subscribe to streaming services, however, is not the same. If you only have Netflix, the programming available to you, and your actual viewing habits, will be dramatically different than if you only subscribe to Paramount+. Likewise, if you bundle Disney+, Hulu, and ESPN+, and add HBO Max, your viewing habits will be different than if you have Netflix, Prime Video, Peacock, and Apple TV+. And there won’t just be differences in what you stream, there will be significant differences in your linear TV viewing as well. The only way to have a meaningful television sample, is to accurately represent the total U.S. based on every possible combination of streaming service subscriptions and cable/satellite/telco. This means that the make-up of Nielsen’s national and local samples could need to change dramatically every year or two. The days when all Nielsen needed to worry about was cable and DVR penetration are gone forever.

But even if you are able to put together a sample that keeps up with the shifting combinations of platform usage, it won’t necessarily provide significantly more accurate data. This is primarily because as more and more niche programming becomes available on more and more platforms, it is quite likely that demographic cohorts no longer have similar viewing patterns.

Nielsen still can’t accurately measure streaming, and won’t be able to until its sample reflects individual streaming service penetration and until it can measure viewing on all platforms and devices. Netflix’s two minutes of viewing data is meaningless gibberish that tells us nothing about how many viewers are actually watching anything. The press should stop repeating (as opposed to reporting) these bogus numbers provided by streaming services. Is Squid Game really Netflix’s most popular series ever? Maybe. If ABC said 50 million people watched Grey’s Anatomy this month without any third-party verification, I doubt anyone would report it as a real number. In reality, no reported streaming data is anywhere near being comparable to linear ratings reported by Nielsen or ComScore.

The fact that Nielsen only reports on streaming titles from Netflix, Hulu, Prime Video, and Disney+ (it recently AppleTV+), and only measures streaming on a TV set, is an ongoing embarrassment. Netflix has repeatedly said that Nielsen’s limited reported streaming data is “not even close” to the actual numbers.

There are actually more high-quality shows on television than ever before. The most popular ones seem to be on streaming services. It seems that way because the press headlines, social media chatter, and industry “buzz” tell us so. Are Stranger Things or Squid Game really more popular than NCIS or Chicago Fire? Of course not. It’s just that we’re not used to evaluating linear TV shows based on time spent viewing or combining multiple sources of their viewing (because advertising isn’t bought and sold that way).

In reality, we have no idea how many people (or who) are watching any individual streaming show or platform. Whatever limited data is currently provided by streamers is not using the same metrics as Nielsen (or one another). So, we really do not have any valid ongoing comparisons between linear TV viewing and streaming using the same metrics or time frame. And any comparisons we do get compare minutes of total viewing among shows where some have eight episodes available to stream to others that have more than 100 episodes available. We do know that broadcast ratings tend to decline every season. Streaming series may as well, but we just don’t see the data.

Will New Vendors and a Joint Industry Committee Change Anything?

A number of advertisers, media agencies, and industry trade organizations joined NBCUniversal’s Measurement Innovation Forum, which is designed to evaluate current audience measurement methodology and come up with alternatives to Nielsen. NBCU sent out a request for proposal (RFP) to more than 50 companies (including Nielsen) to help “build a new measurement ecosystem for us that reflects the future.” Ironically, this was not in response to the basic flaws in current C3 measurement, but rather was spurred by the problems Nielsen encountered maintaining its national people meter sample during the pandemic – which resulted in reported network audience declines that seemed illogical to say the least. Again, media companies only seek action when they believe reported ratings are too low, not when they believe they are inaccurate.

Tests of potential alternatives to Nielsen (such as ComScore, iSpot.tv, Samba TV, VideoAmp, Xandr, and LiveRamp) have reportedly not yielded the results the industry is looking for. Different companies have been providing substantially different numbers from Nielsen and from one another. And even the same suppliers have sometimes produced widely different numbers from one week to the next. As I’ve already mentioned, in today’s media world, currently structured samples (and data modeling) are woefully inadequate in measuring the universe of TV viewers, so significant disparity in data produced by different samples should not surprise anyone.

If data provided by these different companies continue to dramatically diverge from one another, none is likely to be seen as a valid alternative to Nielsen as marketplace currency.

Obviously, a giant set-top sample in the range of tens of millions would be best, but it would still need to be representative of the country at large based on age, income, ethnicity, media device ownership, streaming subscriptions, etc. But even that would significantly under-report viewing sources with a large amount of over-the-air only homes, and would still need a Nielsen-type panel to ascribe demographic data to these homes. But if I had faith that the household sample was indeed representative of the country at large, I would have no problem with a panel for demos.

Now five major media companies (NBCUniversal, Paramount Global, Fox, TelevisaUnivision, and Warner Bros. Discovery) along with the Video Advertising Bureau (VAB) are forming a “joint industry” committee to create standards for audience measurement. Notably missing from this alliance (at the moment) is Disney (which owns ABC and ESPN as well as Disney+ and Hulu).

Since it can’t really be called a joint industry committee if it only consists of sellers, they recently announced that media agencies have been invited to join, or as they phrased it, “We believe that if we’re going to realize our collective ambitions of ensuring accurate cross-platform solutions for measuring premium video are available, we cannot do it alone. We want your feedback as we establish new standards for the future.” I find the use of the word “feedback” rather than “participation” interesting, to say the least.

There are just three times I can recall advertisers, media companies (sellers) and media agencies (buyers) in the same room discussing how to improve TV/video audience measurement. Even prior to the switchover to people meters, Nielsen held separate meetings among researchers from the networks and ad agencies – and neither the network salespeople or agency buyers were present.

In 2005, the Council For Research Excellence (CRE) was formed (I was privileged to be one of its founding members). The CRE initially consisted of around 40 top industry researchers, representing advertisers, networks, local station groups, syndicators, and media agencies. While the CRE did conduct some landmark research, it did not lead to any substantial changes in Nielsen’s measurement methodology – not really surprising, since the “independent” Council’s research was funded by Nielsen (roughly $3.5 million per year). For those who don’t remember or weren’t around at the time, the CRE was formed following Senate hearings on Nielsen’s purported measurement bias, so Nielsen could avoid the federal government becoming involved in overseeing national TV audience measurement. Lawyers were present at many of our early meetings because the potential for collusion between buyers and sellers was a major concern. Nielsen pulled its funding in 2017.

In 2009, television buyers, sellers, and researchers convened for a meeting with top Nielsen executives to discuss how to measure television viewing via DVRs. This was the first time top sales people and buyers were included in this type of meeting. Measuring delayed viewing had become a major concern among advertisers (Nielsen had just started including DVR homes in its national sample). There was urgency to arrive at a solution before the 2009 upfront. Advertisers and agencies, of course, only wanted live viewing reported as marketplace currency, while the networks wanted a full week of delayed viewing (C7) reported. C3 was the compromise.

A few years later, the ANA convened a select group of advertisers, sellers, buyers, and researchers to discuss replacing Nielsen’s C3 measurement with true commercial ratings. This meeting ended with Nielsen, in its typical arrogance, basically telling us they heard our concerns, but had no intentions of shifting away from C3 anytime soon (this was 10 years ago).

Only extremely urgent marketplace forces and advertiser concerns have led to any real audience measurement improvement. Measuring streaming may qualify as one of those times – particularly with Netflix and Disney+ joining other streamers in offering an advertiser-supported tier. Although given that the major media companies own several of the major streamers (Disney+, HBO Max, Paramount+, Peacock, Hulu), I don’t see why they can’t provide combined actual viewing data in the same format to advertisers – unless, of course, they realize the data will not be as big as they are currently able to lead people to believe they are by releasing nonsensical data such as billions of minutes viewed.

What the Industry Needs to Do to Improve TV Audience Measurement

It’s interesting that even with all the criticism leveled at Nielsen, the company is still used as the base to compare any new potential vendors to gauge the validity their reported ratings. So, if another company reports data that is 30% higher or lower then Nielsen’s, it is immediately thought to be “wrong.” But we really have no idea if this is the case.

In addition to re-thinking sample construction, the first thing that needs to be done is to get a handle on what current rating services can and cannot accurately measure. While this might sound logical and simple, I can’t remember this ever being done (outside of the old telephone coincidental days). Even when the industry took the major step of moving to average commercial minute measurement (C3) in 2009, there was precious little analysis done into the methodology Nielsen uses to calculate these ratings.

The only good attempt to get some of these answers was in the CRE’s landmark Video Consumer Mapping Study in 2007-08. I was co-Chair of the CRE’s Media Consumption and Engagement Committee, which commissioned the study. One of the lesser-known findings was that Nielsen’s overall usage levels of households and broad demographic segments, such as total viewers and adults 18-49 were remarkably similar to the observed viewing behavior in our sample. Once you started to look at narrower age groups, however, the reported Nielsen data started to stray significantly from the observed viewing data. And this was just overall TV usage levels, not individual program ratings (and was 15 years ago, when video viewing was not nearly as splintered as it is today). DVR penetration was barely 20% of the U.S., and there were no streaming services. At the time, I suggested we replicate the study every five years, but that never happened – primarily because it was so expensive, and the CRE (and Nielsen) had other priorities.

It is actually not that difficult to figure out how accurate current TV measurement is. I bring this up every time I write on this topic. When I was on the CRE, I proposed a methodology for gauging how accurate Nielsen was at measuring an increasingly fragmented video viewing environment. Nielsen didn’t want to have anything to do with it then, but the industry should consider it now.

Here’s all you need to do:

Develop a sample of 100 or so of the top researchers in the industry (buyers, sellers, advertisers), who are adept at detailed work and understand how audience measurement works. Nielsen, ComScore (and others) would meter their TVs, DVRs, smartphones, computers (desktops, laptops, tablets) and any other video viewing capable devices they own. They would also be given portable meters to measure their exposure to out-of-home video and audio. Let’s see how many actual people are actually watching the commercials in bars and restaurants compared to what the portable devices pick up as “exposure.”

Set up several different viewing scenarios for what and how each participant will view video content and commercials during a single day (6am-1am), which would include both live viewing and viewing via DVRs (with normal fast-forwarding, pausing, etc.).

Participants log in their video and commercial exposure and viewing (down to the second).

Compare their actual viewing to what the meters report. We would then be able to see and address weaknesses in audience measurement, see how much real-world viewing is not being captured by current methodology, and gauge the differences between such things as exposure (the opportunity to view) and actual viewing, and between individual commercial viewing and average commercia minutes.

Not only will this provide, for the first time, a look at how accurate reported ratings are, but it will also tell us exactly where improvements to audience measurement need to be made (which was the original but unfulfilled purpose of the CRE). The project could be overseen by a group of retired research executives or some well-respected company with no skin in the game.

Until something like this is done, all this talk will be little more than the sellers trying to get higher ratings, or moving away from just measuring eyeballs to the even more difficult to measure behavioral and attentiveness data (which everyone has been discussing for years). Most attentiveness data I’ve seen over the years have been gibberish. There has always been a tendency to start focusing on the next shiny object before actually fixing what is still the biggest piece of the pie – in-home viewing to television sets. But if we don’t get that right, measuring real cross-platform viewing will remain out of reach.

So Whats Next?

That’s a good question. I doubt whether the industry will follow my proposal to discover the actual weaknesses in current audience measurement techniques. That would require the expensive, time-consuming process of fixing them, and not necessarily supply the answers anyone wants to deal with. So, if past is prologue, we’ll probably see more talk and several new proposals on how to “better” measure video and cross-platform viewing. New companies will come in with innovative techniques for measuring the video landscape (or portions of it), but won’t get the funding they need to go through the extended scrutiny the industry will require. Nielsen will be forced to make some changes to how it operates. When the next upfront rolls around, most everyone will likely still be using Nielsen as their primary national marketplace currency.

If the media conglomerates sign long-term contracts with Nielsen during the next round, we’ll know most of this was just talk. If they sign one-year deals, making Nielsen (and others) continually prove themselves, then maybe real change will happen.

Posted at 09:38 AM in Commercial Measurement, Research, Television, Upfront | Permalink | Comments (0)

07/01/2022

The Law of Declining Ratings: Why Most New Shows Flop, and What Can Be Done to Prevent it

The mortality rate of new broadcast series is higher than ever. Only 21% of the primetime scripted series premiering over the past five years will still be on the air during the 2022-23 season (36 out of 169) – 23% of the fall series (17 out of 73) and 20% of the mid-season shows (19 out of 96). If we take out the spin-offs, reboots, and franchise extensions, the total percent still on the air becomes just 17% (24 out of 139).

I haven’t seen all of the new broadcast primetime TV series pilots yet, but I can predict with virtually 100% certainty that broadcast network audiences will decline next season and most new series will flop. But it doesn’t have to be that way.

We have the laws of physics, the law of gravity, the law of large numbers, the law of diminishing returns, the law of supply and demand, even the law of averages. But despite the fact that broadcast ratings decline virtually every season, there’s no actual law of declining ratings that I could find. So I’ll posit one. As more viewing options become available, most returning TV shows will lose viewers, and it will take longer for potential viewers to become aware of new shows. Corollary 1: The only way to stem the tide of network audience erosion is to promote both new and established series on TV shows that appeal to similar viewers – regardless of the network or platform. Corollary 2: The likelihood that network TV audiences will decline form one year to the next is directly related to how much that network prioritizes rankings over ratings.

It’s not that the networks aren’t capable of creating hits anymore, it’s just that there are so many choices out there, television viewers no longer have to watch the “least objectionable programming,” a term probably unfamiliar to anyone under 35.

There are actually more high-quality shows on television than ever before. The most popular ones seem to be on streaming services. It seems that way because the press headlines, social media chatter, industry “buzz” tell us so. Are Stranger Things or Squid Game really more popular than NCIS or Chicago Fire? Have more people seen The Flight Attendant this season than Young Sheldon? Of course not.

In reality, we have no idea how many people are watching any individual show on streaming platforms – Nielsen’s sample is not representative of streaming subscriptions, nor do they measure all streaming services, nor do they measure streaming beyond the television set. Whatever limited data is currently provided by streamers is not using the same metrics as Nielsen (or one another). So, we really do not have any valid ongoing comparisons between linear TV viewing and streaming using the same metrics or time frame. But we do know that broadcast ratings tend to decline every season. Streaming series may as well, but we just don’t see the data.

The New TV Season is Not as Relevant as It Used to Be

Prior to the early 2000s, the new fall TV season was one of the few entertainment topics discussed throughout the summer on syndicated TV shows such as Entertainment Tonight, Extra, and Access Hollywood, and print magazines such as People, Us, and Entertainment Weekly. The broadcast networks aired mostly repeats during the summer months, and cable networks contained mostly off-network reruns and reality. Except for the occasional movie blockbuster or celebrity scandal, there wasn’t much else for the entertainment press to focus on. That was before original scripted series started proliferating on cable networks during the summer months, and before the average TV home subscribed to at least three streaming services. With new original scripted series available to viewers on multiple platforms year-round, the new broadcast TV season simply doesn’t generate as much press or viewer excitement as it once did.

New Series Promotion is More Important but Less Effectve Than Ever

There are so many good shows on so many different venues and platforms, both ad-supported and not, even top-notch new shows can slip through the cracks if they aren’t effectively promoted. Part of the problem promoting a new season that begins in September is that shows that air in the summer tend to appeal to different audiences than those that air in the fall. It wasn’t a problem several years ago, when the summer consisted largely of broadcast repeats of regular series (which did generally appeal to the same viewers as in the fall, albeit fewer of them). Today, the broadcast network summer schedules are filled with game shows, reality, and limited-run series – not necessarily the audience for the new fall scripted series. While on-air promos are still the best way to create awareness for new shows such as Alaska (ABC), East New York (CBS), Lopez vs. Lopez (NBC), Monarch (FOX), and Gotham Knights (CW), they are not maximizing their potential target reach by being promoted in Celebrity Family Feud (ABC), Love Island (CBS), American Ninja Warrior (NBC), and Lego Masters (FOX).

My wife and I watch a significant amount of broadcast television during the fall and winter, but very little in the summer. For us, summer is the time to find new streaming shows to binge. Or, if we’ve heard good things about a linear TV series we haven’t seen, we’ll catch up with it on whatever on-demand platform it’s on. This is becoming the case for more and more people across the country, and not just younger viewers.

The broadcast networks still adhere to fall and spring seasons with program lineups, with weekly episodes targeted to largely similar audiences – unlike a streaming service, where shows that appeal to substantially different viewers can thrive side-by-side. Netflix, for example, can put on Stranger Things, Money Heist, BoJack Horsemen, The Crown, Grace & Frankie, The Umbrella Academy, and Bridgerton, at the same time without being concerned about audience flow or cohesive nightly lineups. Ad-supported cable networks do have seasons (or at least air weekly episodes), but are not as reliant as broadcast networks on premiere dates, lead-ins, or having similar programming across their schedules. They also often repeat primetime episodes either immediately following the first run or during late night.

The broadcast network structure makes promoting a new show that doesn’t fit in with that network’s typical audience much more difficult, particularly if it is restricted to its own air. A prime example is the upcoming Monarch, a multi-generational family drama about a country-music dynasty (with Susan Sarandon, Trace Adkins, and Anna Friel) set to debut on Fox this fall. The only problem is that it is not similar to any other current Fox show. But it should appeal to many regular CBS viewers. If the broadcast networks finally see the light and start cross-promoting one another’s programming, Monarch will advertise in shows such as CBS’s Bob Hearts Abishola, Young Sheldon, Blue Bloods, and NCIS, and most likely become a success (or at the very least get a strong viewer sampling). If the broadcasters continue to live in the 1980s, seeing only each other as competition, and stubbornly refuse to cross-promote one another’s shows, then a series like Monarch might not get the viewer sampling it needs to become successful.

Do Fall or Mid-Season Shows Have a Better Chance to Succeed?

Theoretically, a new mid-season series has an advantage over one that debuts in the fall when it comes to promotion. Shows that premiere in September are competing for awareness with several other new series debuting over the same two- or three-week period. And these shows are promoted during the summer, when program schedules and viewing habits are substantially different than in the fall. Of course, there is only an advantage for mid-season shows if thee broadcast networks start cross-promoting. Broadcast shows that debut mid-season (usually January – May) are able to advertise in established first-run series – a big plus if you take advantage of all the programming on all the networks that reach the precise audience your new show is targeting. Otherwise, as is often the case with ineffectively promoted broadcast shows, they will get lost in the shuffle – people are used to sampling new series in the fall, since so many debut at around the same time. By mid-season, viewing patterns are more established, so without cross-promotion it’s easy for a new show to slip through the cracks – unless it’s a brand extension of a successful franchise.

Of the current top-30 rated scripted shows among adults 18-49, for example, less than one-third (9) debuted in mid-season. More than half of those (5) were spin-offs or franchise extensions – which already had built-in audiences, and did not need extensive promotion to become hits.

Who remembers these excellent but short-lived mid-season series – For the People, Whiskey Cavalier, Tommy, Deputy, Debris, and Rebel – shows that most people probably never heard of. All victims of network stubbornness to not promote their product to the largest chunk of available target consumers – namely viewers who are watching similar programs, regardless of the network.

Keeping Viewers Tuned to Broadcast Television

Viewers don’t think in terms of ABC vs. CBS vs. NBC vs. FOX anymore. Only network executives still think that way. It is essential for the broadcast networks to finally understand that keeping viewers tuned to any broadcast network is the best way to keep them in the broadcast arena and get them to switch over to their programming. Once they go to other platforms, it’s much harder to lure them back. And while the broadcasters still refuse to take ads from each other, they gladly accept them from their real competitors, premium cable networks and streaming services.

Ad-supported cable networks long ago figured out the best way to increase viewership is to cross-promote one another’s programming. They also understand that it doesn’t really hurt them if other cable networks do the same. If everyone gains viewers, more advertising dollars shift from broadcast to cable, and everyone eventually benefits. Streaming services quickly realized that the best way to get viewers and new subscribers is to advertise where the most viewers still congregate – the broadcast networks. Yet while the broadcast networks constantly sell broadcast television to advertisers as the best place to reach large chunks of target viewers at one time, they still don’t seem to believe it when it comes to their own product.

Prioritizing Rankings Over Ratings: Short-Term Gain, Long-Term Decline

The networks and the press have long considered program rankings far more important than actual ratings. I still cringe when I see an article that talks about how well a program performed, winning its time period with a 0.4 rating among Adults 18-49. This low a first-place rating should be a cause for alarm, not celebration.

The upfront is designed to reward rankings over ratings, and enables the networks to continually raise prices for shrinking audiences. I’ve said it before and I’ll say it again, if you gave broadcast network executives a choice between growing their audience by 10% but slipping from first to second place, or losing 10% of their audience but moving up in the standings (because other networks declined by more), they would uniformly pick the latter. This is probably one of the main reasons the broadcast networks stubbornly refuse to cross-promote their shows. They’d rather hurt the other networks than see everyone improve (and potentially see another network gain more viewers). Why else would NBC schedule its new American Song Contest opposite ABC’s popular American Idol? They couldn’t possibly have thought it would attract more viewers. But they might have thought it could hurt one of ABC’s stronger shows, and maybe they could inch up in the standings.

I led research departments at major ad agency groups for more than 30 years, and while media buyers would often ask for program or network ranking reports, I can’t recall many instances where anyone asked if a show or network’s ratings were up or down from the previous season. If I was putting together a ranker chart for a presentation, I was never asked to include the actual ratings (in fact, I was usually asked not to).

For the larger cable networks, ranking among the top 10 matters more than growing their audience. I worked at a cable network where even though our average rating was up from the previous year, we slipped from 10^th to 11^th place among cable networks for adults 25-54. This was considered a disaster. The fact that only three-tenths of a rating point separated the 3^rd and 20^th place cable networks was not relevant. The following season, our average rating was unchanged, but we had managed to climb to 8^th place (because other networks declined). Celebration time.

Given how the marketplace has traditionally functioned, higher rankings do lead to short-term success and profitability. But focusing on rankings at the expense of audience growth also leads to long-term erosion and drives viewers to other platforms, many of whom may not return.

Networks Stop Promoting New Shows Too Soon

While the broadcast networks heavily promote their new fall shows over the summer and during premiere week, they tend to cut back on these efforts way too soon. It usually takes three to five weeks for a new show to settle into its final ratings range. And in the era of Peak TV+, it takes viewers longer than ever to even become aware of a new show much less start watching it. I’m still discovering shows to watch on Netflix and Amazon Prime Video that have been on for several seasons. While the networks rely on ad revenue, so don’t have that kind of time, they should be promoting new shows they believe in throughout the year and heavily promote the fact that viewers can catch up with recent episodes and previous seasons, which are available to stream on demand. Stop treating good shows as lost causes if viewers haven’t found them during their first few weeks on the air.

There’s no law that says broadcast ratings have to decline every year or that most new shows will fail. To paraphrase a famous playwright, “the fault lies not in their stars, but in themselves.”

Posted at 10:17 AM in Binge Viewing, Research, Streaming, Television, TV Programming, Upfront | Permalink | Comments (0)

Some Pre-Upfront Thoughts (5-22)

In a series of presentations to the advertising industry this week, the major media companies are announcing plans for their linear and streaming platforms during the next year or so, which includes their respective fall TV schedules. This marks the start of the “upfront” season, when advertisers willmj,spend upward of $20 billion buying commercial time on national television shows scheduled to air during the 2022-23 broadcast year.

As I do every year, I will be reporting on each company’s presentation, and once I watch all the new series pilots, evaluating their upcoming broadcast network programming. But first I have a few pre-upfront thoughts.

Do the Upfronts Still Matter?

In today’s video world, the very idea of a fall TV season seems old fashioned. The broadcast networks might still adhere to fall- and mid-season schedules for debuting new shows but their competitors do not. Ad-supported and premium cable networks premiere many new shows during the summer months, while streaming services drop new series whenever they happen to be ready. In a television landscape of 10-13 episode cable shows, and 6-10 episode streaming series, when you can binge entire seasons at one time, most viewers don’t think in terms of TV seasons anymore. Their favorite non-broadcast shows premiere, go on hiatus, and return at different times during the year.

The broadcast networks, however, still hold onto a schedule that starts in the fall. They have traditionally been locked into weekly schedules of first-run programming coinciding with their local affiliates’ sweep months of November, February, and May (which dates back to a time when local ratings were measured via paper diaries four times a year). Current audience measurement technology makes sweep months increasingly irrelevant, although the “official” broadcast season continues to end in May. It’s also easier to sell commercial time upfront if buyers know when every show will premiere. And let’s not forget they still make the most money from selling advertising in their linear network programming.

The once highly anticipated “upfront week” has become a much more subdued affair of late. Because of the pandemic, the last two years were exclusively virtual presentations, which simply don’t have the same energy as live events at Radio City, Carnegie Hall, or Lincoln Center, and the subsequent celebrity-filled after-parties. This year’s upfront events will be live, but those who don’t yet feel comfortable returning to crowded settings will still be able to live-stream the presentations.

Until recently, there was also a fair amount of anticipation among the general public during this period. After the upfront schedule announcements, pundits would proliferate on syndicated entertainment shows, and in print magazines, and newspapers, throughout the summer talking about the new fall TV shows. Online chatter and buzz would ensue. There used to be little else happening in the television arena, and aside from the latest theatrical release or celebrity scandal, the upcoming fall TV season was the one of the only big entertainment news items. Today, with so many high-profile streaming services with new programming premiering year-round, the broadcast fall TV season is no longer the only game in town, and new broadcast network shows simply don’t generate as much pre-season buzz as they did just a few years ago.

The upfront season has traditionally benefited sellers more than buyers, and have been seen as big branding events for the broadcast networks and the top tier ad-supported cable networks.

The upfronts have served as annual reminders to the ad industry and media press that the broadcast networks are still watched by significantly more viewers than any other video source and are still the best way to reach large chunks of viewers at one time. On this basis alone, the upfronts have been extremely valuable to the broadcast networks (as well as some of the larger ad-supported cable networks).

This will be the third consecutive year, when instead of individual events for broadcast and cable networks, we have presentations from competing media conglomerates, each of whom owns a broadcast network, ad-supported and premium cable networks, digital platforms, subscription and ad-supported streaming services, and sports and news operations.

The broadcast network schedule announcements have long been the foundation of these upfront presentations, but last year marked the first time they were not the main focus. The presentations were instead designed to tell us that these media companies are everywhere, can reach everyone, have high-tech analytic capabilities to optimize and better target any ad campaign, are diverse and inclusive, and are better equipped and have better scale to provide advertisers and viewers what they want than any other media company (they all made essentially the same claims). This year’s presentations are likely to be even more focused on the depth and breadth of scale, as well as streaming ads, and using alternate “currency” measurement to supplement (but not replace) Nielsen.

The upfront system enables the networks to continually raise prices for a shrinking product. By traditionally having the broadcast upfront first, the networks have created an artificial demand for what is essentially an unlimited supply of rating points. It also allows the sellers to force the buyers to purchase advertising in less desirable programming so they can get the more desirable inventory.

Keep in mind that 30 years ago, the average broadcast network rating was more than 10 times higher than the average of the top-10 cable networks. Twenty years ago, it was roughly 7 times higher. Today, it’s barely 3 times higher. The advantage broadcast had over the top ad-supported cable networks is not nearly what it used to be. But if more cable networks shift away from original scripted series, the broadcast networks will again have an advantage.

For advertisers, audience guarantees makes the process seem worthwhile. If the buy underperforms what a network promised (guaranteed), the network provides the advertiser with additional commercials to make up the shortfall. This was important at a time when there were wide disparities among network and individual program ratings, and future performance was less predictable.

As average ratings have declined, however, they have become easier to project from one season to the next. Blockbuster hits are few and far between – particularly in mid-season. It is much more likely you will under-estimate a show’s performance than over-estimate it, and far more likely you will not overestimate an entire buy. And if you’re not buying upfront, but rather going into the marketplace just a month or two before a show airs, if you can’t project the audience with a reasonable degree of accuracy, you should be doing something else.

The upfronts are basically a futures market, allowing media companies to provide Wall Street with the confidence that they are financially healthy.

For advertisers, the upfront contains a fair amount of uncertainty. When you buy inventory for an entire year upfront, you know going in that much of what you think you’re getting won’t be there later in the year.

For the networks and studios, spending tons of money on new programming and pilots also remains a risky proposition – only about 21% of all the new series that debuted over the past five years will still be on the air next season. Increasingly, partnerships and back-end deals (often with streaming services) are necessary to help offset these high costs.

Are Ads on Streaming Platforms More Valuable Than Ads on Linear TV?

Ad-supported tiers on streaming services are important to their media company owners who are looking for additional revenue streams to help offset the high cost of programming, to advertisers who are searching for ways to reach consumers at a time of declining linear TV ratings, and to the general public, many of whom are looking for ways to reduce their own costs.

HBO Max introduced an advertising tier in 2021. Netflix has indicated it might start accepting ads in a lower-priced tier by the end of 2022. Disney+ will do so even sooner. This is not only a game changer, but it is the best thing to happen for advertisers in many years.

From an advertiser perspective, one key advantage of linear TV is that you know in advance when viewers will watch the show (more or less), and that the audience will be fairly predictable and stable on a weekly basis – which means they are better suited to time-sensitive advertising campaigns. That’s because network programming is locked into weekly schedule grids. Not so with streaming series, where viewership is more likely to come in spurts, depending both on the platform and on how many episodes of a series are dropped at one time.

Nevertheless, the advantages of streaming commercials to advertisers far outweigh any potential downside. When you are streaming something, it is, along with DVR playback, typically the highest level of appointment TV (on demand). There is no commercial avoidance through channel switching, and unlike DVR playback, you can’t fast-forward through commercials. Streaming services also contain fewer ads per hour and significantly less commercial clutter than linear networks.

A “confirmed” commercial impression on a streaming platform is therefore far more valuable than a commercial minute impression on linear networks. By confirmed, I mean certified by the streaming service (which has access to the actual data), not third-party measurement done by Nielsen, ComScore, or some other research company. Current C3 ratings do not accurately account for commercial viewers on linear TV, and Nielsen’s sample is not representative of the streaming universe, nor does it measure all streaming services or devices.

While most streamers don’t reach nearly as many viewers as a broadcast network, Netflix does. Even if only 20% of current Netflix users opt for the lower-priced ad-supported tier, it would probably place Netflix above any linear cable network in terms of audience size, particularly for its most popular series – and there’s no question that a lower-priced version will attract more subscribers. Advertisers will know exactly how many viewers they are reaching and for how long (if they don’t rely on third-party measurement for streaming).

Many people, particularly younger folks, do not really want ads interrupting their streaming. They’ve grown accustomed to ad-free viewing. So we seem headed toward another situation (that we’ve already seen to a degree with DVRs) where the most desirable viewers, those with more disposable income, will be the greatest ad-avoiders. The demographic differences between those who opt for ad-supported streaming and those who can easily afford not to, bears watching. Will some people want the ad-supported tier for the more expensive Netflix and HBO Max but not for the less expensive Disney+, Paramount+ or Peacock? This, of course, requires good research into streaming, including who subscribes to which form of which service and why. Research which is now sorely lacking (non-existent?).

Posted at 10:12 AM in Binge Viewing, Commercial Measurement, Research, Streaming, Television, TV Programming, Upfront | Permalink | Comments (0)

04/12/2022

Some Pre-Upfront Questions (and maybe some answers) (3/22)

Until the early 2000s, changes to the media landscape – what was available to view and how it could be viewed – were gradual. The slow pace of change made predicting consumer television viewing habits relatively simple, and slow-to-change research companies didn’t have to pivot too quickly, nor innovate too often.

Over the past 20 years, however, the media environment has been in a constant state of change. How people use and relate to media, video, and individual television shows is largely dependent on the ever-expanding array of media devices and subscription video platforms they can access. While most people eventually got the same access to almost everything (pre-2005), this is no longer the case. Developing national television samples that adequately represent the country at large has become increasingly difficult.

The way broadcast networks, once the only national television presence, have dealt with threats to their dominance hasn’t really changed much over the years – they’ve traditionally tended to think of only one another as their real competition. As a result, their combined audiences have continued to erode at an unnecessarily rapid pace.

With all that said, here are some related questions I have leading into the upfront season.

Why do the broadcast networks promote their competitors but not one another?

Yes, I know I’ve been writing about this for years, but I’ve yet to receive an answer that makes sense. Whenever I ask network executives for their rationale, I get responses like, “Why would we ever help our competition?,” “Our affiliates wouldn’t like it” (a real 1980s response), “It’s an ego thing,” or “I don’t know.” The answer should be, “Because we’ve been committing promotional malpractice, we’ve decided to change this absurd policy immediately. We realize it’s the best way to maximize viewer sampling and improve our overall ratings.”

I do actually understand how this reasoning originated. In the beginning, there were only three broadcast networks competing for national advertising dollars. With no competitors other than themselves, they fought fiercely for every rating point, and would never think of helping one another. Then, in the late 1980s and early 1990s, as more and more people started to get various cable networks, the term “network erosion” entered the media lexicon. But it wasn’t until the early 2000s, when ad-supported cable networks started airing original scripted series, that cross-promotion became a key element in cable’s growth (at the expense of the broadcast networks).

Cable networks, never encumbered by the tradition of ruling the airwaves, quickly understood the best way to grow their audience was to appeal to those who were watching similar shows on other networks. They also realized that it didn’t really hurt them if other cable networks did the same. The more cable networks that grew viewers, the more advertising dollars would shift from broadcast to cable, and everyone would eventually benefit – which is exactly what happened.

There are several cable networks that air some of my favorite scripted series, but I don’t watch much of their other programming. I could name more than a dozen shows off the top of my head that I never would have started watching had I not seen it promoted on a different network. This is also true for when those shows return mid-year for a new season – I would not have realized, for example, that Killing Eve (one of my favorite shows) had recently returned for its final season had I not seen it promoted on another network.

There’s a reason streaming services are spending so much money advertising on linear television. They know that the best way to get viewers and new subscribers is to advertise where the most viewers still congregate. How else would I have known two of my favorite streaming series, Ozark (Netflix) and The Marvelous Mrs. Maisel (Prime Video) had recently returned? Yet while the broadcast networks constantly sell broadcast television to advertisers as the best place to reach large chunks of target viewers at one time, they still don’t act that way it when it comes to their own product.

Viewers don’t think in terms of ABC vs. CBS vs. NBC vs. FOX anymore. Only network executives still think that way.

The broadcast networks continue to stubbornly refuse to promote one another’s new shows, while gladly accepting ads from their real competitors – namely premium cable networks and streaming services. The idea that a new show produced by CBS can’t be promoted on CBS because it airs on ABC, is, to say the least, ludicrous. Another point that illustrates how absurd this all is – the broadcast networks accepted ads for most streaming services, but not for CBS All Access, for no reason I can find other than it had “CBS” in its name. As soon as it rebranded itself as Paramount+, the other broadcast networks started happily taking its ads (as I had predicted thy would).

In this year’s Super Bowl on NBC, there were 10 promos for NBC shows and 8 for its steaming service, Peacock. But there were also 2 ads for Disney+, 2 for Prime Video, 1 for Netflix, 1 for HBO Max, 1 for HBO, and 1 for AMC+. There were none for ABC, CBS, Fox, or CW.

In what other business does a company refuse to advertise its product to the largest group of readily available customers? These aren’t just random consumers the broadcast networks are choosing not to pursue. These are their prime prospects, whom the networks know are already watching similar programming, who are at that moment most receptive toward receiving a message about other TV shows. They are already watching and engaged with the exact type of program the networks are trying to promote. I’m not sure how to say it any more plainly.

It is essential for the broadcast networks to finally understand that keeping viewers tuned to any broadcast network is the best way to keep them in the broadcast arena and get them to switch over to their programming. A broadcast hit on one network actually does benefit all networks – it reminds the industry and the press that except for the occasional cable blockbuster (such as The Walking Dead or Yellowstone), nothing else is capable of delivering as large an audience at one time as a successful broadcast series. Yet the broadcast network seem perfectly willing to encourage their viewers to seek out other platforms.

Why are rankings more important than ratings?

The networks (and the press) have long considered program rankings far more important than actual ratings. This is likely another reason the broadcast networks still refuse to cross-promote one another – they’d rather they all decline and the other networks decline more, than they all grow, but the other networks grow more.

I still cringe when I see an article that talks about how well a program performed, winning its time period with a 0.5 rating among Adults 18-49 (it seldom mentions that the 4^th place network got a 0.35 rating). The headline here should be, “If a 0.5 rating is good enough to win the time slot, the broadcast networks have big problems,” or, “If less than two-tenths of a rating point separates first and fourth place, who cares who’s #1?”

The upfront is designed to reward rankings over ratings, and enables the networks to continually raise prices for shrinking audiences. I led research departments at major ad agency groups for more than 30 years, and while media buyers would often ask for program or network ranking reports, I can’t recall many instances where anyone asked if a show or network’s actual ratings were up or down from the previous season. If I was putting together a ranker chart for a presentation, I was never asked to include the actual ratings (in fact, I was usually asked not to).

For the larger cable networks, ranking among the top 10 matters more than growing their audience. I worked at a cable network where even though our average rating was up from the previous year, we slipped from 10^th to 11^th place among adults 25-54. This was considered a disaster. The fact that only three-tenths of a rating point separated the 3^rd and 20^th place cable networks was not relevant. The following season, our average rating was unchanged, but we had managed to climb to 8^th place (because other networks declined). Celebration time.

Focusing on rankings, and hurting other networks at the expense of your own audience growth, is short-term thinking that leads to long-term decline. Imagine how the industry (and press) would react if each broadcast network increased its audience next season. The only reason it won’t happen is because the networks don’t want it to.

What audience measurement currency should be used this upfront?

The Video Advertising Bureau (VAB), the industry trade group that represents both broadcast and cable networks, is demanding that Nielsen stop releasing its new “Big Data” monthly audience reports, which include set-top-box data and smart TV Automated Content Recognition (ACR) data to complement Nielsen’s traditional age/sex panel data. The VAB cites initial data provided to the industry as “rife with illogical audience patterns and contradictions, that render it currently unusable.” They want any new data that could be used in pricing advertising inventory held back until after the upfront, and want Nielsen to explain how the data was created. After the upfront, the industry can examine the data. The VAB also believes that offering two different measures leading into upfront negotiations will just serve to create confusion.

Nielsen responded that it was disappointed the VAB chose to raise its concerns in the press, and that Nielsen has been in regular contact with its clients to review the audience methodology. Nielsen went on to say “…a trade group associated with traditional TV channels is an incomplete and biased subset of the video marketplace. We prefer to work openly with the entire industry to get the best measurement solution. Furthermore, based on client feedback across buyers and sellers we made the decision to allow either data set to be used for trading in the fall.”

One key question should be, do industry expectations of what audience data “should” look like matter? The answer if you want accuracy is no. But since accuracy has never been as important to the buyers and sellers of commercial time as stability (without which the industry will have trouble functioning), the practical answer is yes.

This is one reason no new measurement service has been able to unseat Nielsen as national industry currency, nor is any likely to. The industry relies on trending data and a degree of stability, A new system that generates substantially different data from Nielsen is scary. Since virtually no one has ever really tried to understand how accurate Nielsen ratings are, no one wants to deal with trying to figure out if a new system that reports significantly different data is actually more accurate. And if it provides essentially the same data, what’s the point in switching away from the only company with 50 years of experience and some of the best researchers in the business?

While much of the industry pretends to want the most accurate measurement possible, the reality is that sellers want higher ratings and buyers want stability.

I’ve been saying for a few years now that so-called demographic cohorts, the foundation of Nielsen audience samples, no longer necessarily have similar viewing habits or even access to the same viewing options – particularly when it comes to streaming services, DVRs, and multi-media devices. This makes current sampling procedures woefully inadequate in projecting total U.S. television viewing.

I don’t know about you, but my viewing is not nearly as stable and predictable as it was 10 years ago. I have a DVR and subscribe to multiple streaming services. When Netflix recently dropped the 4^th season of Ozark, my linear TV viewing changed dramatically for a week or so as my wife and I watched all seven episodes and then caught up on the regular shows we missed via DVR (we forgot to record one HBO show, so we caught up with that one on HBO Max). This happens whenever a streaming services drops one of our favorite series – our viewing pattern changes, even if they drop just one episode a week rather than a full season. Often times we will wait until two or three episodes are available so we can watch more than one at a time.

Here’s my problem with both the VAB and Nielsen perspectives. There is no question that census-level “big data” is more accurate than a relatively small national sample used in Nielsen’s panel. There is also no question that the panel will provide more stable and “logical” data. But Nielsen always likes to have it both ways. It positions itself as the arbiter of good research when it suits its needs, and then as simply a data provider when it suits other needs. By saying it is merely providing data and it’s up to buyers and sellers to decide which to use, it is in fact putting its stamp of approval on both. In reality, one is better and should be used as marketplace currency. Until both buyers and sellers can agree on which is “best,” it is probably a good idea to hold off until after this year’s upfront, and then spend the next few months examining and validating the new data.

It should be noted that anytime you dramatically improve audience measurement, the previously highest rated networks will tend to decline and the lower rated ones will tend to increase. When Nielsen switched for the old meter/diary measurement to people meters, there were some significant changes in reported viewing patterns – no one thought they were “illogical” because we all understood it to be a vast improvement in measurement methodology. Of course, at the time, there were limited viewing options, and it had been long assumed that the old diary system resulted in human bias that cause the most popular TV shows, and those that aired multiple times a week in syndication to be overstated. In today’s much more splintered video environment, with many more cable networks, numerous streaming services, and multiple viewing platforms, no one knows how a vastly improved audience measurement methodology will or “should” impact reported viewing.

Should Disney+ and Netflix offer lower-priced advertising tiers?

Yes.

Is it better for a streaming service to drop an entire season at once

or on a weekly episode basis?

I’ve always felt as though companies that owned both linear TV networks and streaming services tended to drop streaming series episodes once-a-week because they don’t want their network audience to become dependent on bingeing, but rather continue to expect new weekly episodes, which has always been the ad-supported linear network model. This accounts for how Disney+, Hulu, HBO Max, Paramount+, and Peacock schedule most of their original series. Apple TV+ probably does the same because it does not have the extensive libraries or acquired programming the others have stockpiled, so it benefits them to give viewers a reason to come back every week. And I’m sure that all believe they will delay subscriber churn if viewers need to return every week for two or three months to watch one of their favorite shows (instead of watching 10-13 episodes in less than a week).

Netflix, of course, has always dropped entire seasons at once and couldn’t care less about the linear network model. It also has so much more original content than any other streaming service that it doesn’t need any individual show to keep viewers coming back. Amazon Prime Video used to drop entire seasons, but recently moved toward dropping a couple of episodes and then one per week. This could be because they are not producing the same quantity of programming as in the past, and are putting on more “big event” series such as The Wheel of Time and the upcoming The Lord of the Rings: The Rings of Power.

There are a number of ways Netflix benefits from dropping full seasons of series. When they drop an even moderately popular series, it will tend to show up on Nielsen’s weekly list of most viewed streaming shows. And with the streaming service and the press reporting meaningless data such as billions of minutes viewed, Netflix’s full seasons have a tremendous advantage over other streamers’ once-a-week episodes. Given the PR value of dropping entire seasons at once, which does lead to increased subscribers (who want to watch the “most popular” shows), I only see upside for everyone doing so – at least for some of their key shows.

I know with my own viewing habits, I never remember which day of the week a given streaming show debuts, so I tend to forget about a weekly show, and then wind up going back to it after two or three more episodes are available.

Posted at 10:45 AM in Commercial Measurement, Research, Television, TV Programming, Upfront | Permalink | Comments (0)

Here's What's Wrong With TV Measurement and How to Fix It (10/21)

When it comes to national television audience measurement used for the buying and selling of commercial time, Nielsen has long been an industry-mandated monopoly. While potential competitors have periodically emerged over the years, they have failed to sustain enough support to survive – not because Nielsen did anything to impede them, but rather because advertisers and networks have been unwilling to pay for multiple sources to provide similar national data.

There have been a number of times when various issues arose regarding how and what to measure (household meters/persons diaries, people meters, passive meters, portable meters, commercial minute ratings, out-of-home viewing), new technology and devices (VCRs, personal computers, DVRs, tablets, smartphones) or “unusual” fluctuations in reported data (such as sudden TV usage declines among households, kids, or young men). And most recently, problems maintaining a viable sample during the pandemic. But while there have been occasional calls for change, the industry’s unwillingness to support any real competition to Nielsen, along with networks and media agencies continuing to sign long-term Nielsen contracts, made the status quo is hard to budge.

There have been only two instances, more than 20 years apart, when Nielsen was forced to completely overhaul how it reported television audiences – in 1987, when the switch was made from the antiquated household meter/diary system to national people meters, and in 2009, when DVRs and time-shifted viewing led to the switch from program ratings to average commercial-minute ratings (C3).

How those two fundamental changes were implemented shows how much the industry’s priorities have changed over time – or really how the speed of change in the access to video content and in consumer behavior has caused good research to take a back seat to rushing new products to market.

There was a time when any change to audience measurement needed to undergo extensive vetting before the industry would consider implementing them. People meters, for example, were evaluated by industry committees for nearly three years – including a full year of side-by-side data with the old meter/diary method – before agencies and networks decided to use it as currency. AGB’s attempt to enter the U.S. market with people meters pressed Nielsen to develop its own system – and since AGB did not provide anything substantially different, there was no reason for the industry to pay for two essentially identical measurement services. Of course, back then there were no compelling forces at work to make us move fast.

VCRs had promised but never realized the idea of people programming their own viewing schedules. Even though by the late 1990s, roughly 90% of the country owned a VCR, its major use continued to be renting or buying movies. The average amount of actual time-shifted viewing in primetime never rose above 5%. But even more significant, Nielsen was never able to measure VCR playback among people (although it could measure recording and playback among households – it ascribed household playback to demos). While this did become a big deal among advertisers and agencies for a few years, the networks didn’t see it as a problem. Nielsen eventually just said sorry, nothing we can do, and the industry moved on.

DVRs actually changed viewer behavior and forced the industry to change. Unlike VCRs, the DVR allowed viewers to record television shows without having to use videotape, and both recording and playback was significantly more user-friendly. As a result, there was a substantial amount of time-shifted viewing. Also unlike VCRs, Nielsen was able to measure playback activity. But while VCRs had become the fastest growing electronic device since television itself, DVR ownership grew at a much slower pace. Having been introduced by ReplayTV and TiVo in 1999, it took a decade before DVRs were even in 25% of U.S. TV homes, and another decade before it reached half the country. Nielsen finally started including DVR households in it national people meter sample in January 2006, when the devices were in nearly 20% of homes.

Commercial avoidance through fast-forwarding had become one of the biggest advertiser concerns, and measuring DVR playback and commercial ratings was now a priority. Virtually every study and survey ever done indicated that anywhere between 70% and 80% of VCR or DVR playback involved fast-forwarding through commercials. But there was no actual Nielsen data to prove it.

Commercial Pod studies paved the way for C3. As the industry started to publicly grapple with how to deal with delayed DVR viewing and fast-forwarding, some media agency analyses were already underway. My Audience Analysis group at MAGNA Global conducted extensive commercial pod studies over four consecutive years (2005-2008), examining the dynamics of commercial pod versus program performance for broadcast, cable, and syndication. We recorded hundreds of television shows across seasons, dayparts, and genres. We separated program segments from commercial pods for each telecast, and matched it up with Nielsen’s NPower minute-by-minute ratings. We shared our reports with advertisers, networks, Nielsen, and the press. These studies gave the industry confidence that commercial-minute ratings were consistent enough from year-to-year to use as marketplace currency – which led to Nielsen implementing C3 in 2009.

Nielsen switched to C3 with virtually no research into the methodology, or whether it actually accounted for fast-forwarding. While an extensive amount of analysis went into determining whether “commercial-minute” ratings were viable to use as marketplace currency, virtually no research was done by Nielsen to determine the proper methodology for calculating them. Speed to market was considered more important than evaluating the measurement methodology. The MAGNA Global Commercial Pod Studies defined commercial minutes as minutes containing at least 30 seconds of commercials. Nielsen decided to define commercial minutes as those containing even one second of commercial time – and then weight averaging those minutes based on their commercial duration to arrive at the “average commercial-minute” rating.

In 2006 and 2007, Nielsen held a series of industry-wide meetings to figure out how to report DVR playback and commercial-minute ratings. The biggest debate at the time was not on methodology, but rather on what to report. Buyers (advertisers and their agencies) wanted only live viewing to be used as marketplace currency. Sellers (broadcast, cable syndication) obviously wanted a full seven days of delayed DVR viewing included in the reported ratings. The final meeting on the subject, in which the C3 compromise was established, was the first time that Nielsen had invited top research, buying, and sales executives in the same room to discuss audience measurement methodology and related business issues. It is also the moment that Nielsen shifted away from being a pure research company – at the following year’s national client meeting, Nielsen actually proclaimed that getting a product to market was now more important than validating the research beforehand.

Those of us who were involved in the discussions on how to best measure commercial-minute ratings, recall that C3 was designed as a one- or two-year band-aid. The industry’s major computerized pre- and post-buy analysis systems, Donovan Data and Media Bank (which have since merged to create Media Ocean), could not yet handle individual minute measurement. They still needed audience data in the format of Nielsen’s MIT tapes, which used average ratings data. Advertisers wanted individual commercial ratings as soon as they were feasible. I had been working with both Donovan and Media Bank, and both did have the capability of providing pre- and post-buys based on individual minutes the following year.

Even though research was starting to clearly demonstrate fundamental flaws in C3 measurement, we were told it didn’t really matter individual commercial measurement would soon be the marketplace currency. I recall telling whoever would listen at the time that given the chaos that ensued with the switch to C3, and the additional expense and staffing required to handle moving to actual commercial measurement, that C3 would likely be the end point. That was 12 years ago.

It should also be noted that the vast majority (if not all) of Nielsen executives did not (and probably still do not) know exactly how C3 is calculated. Many have probably forgotten, that when the “C” streams of ratings data were first made available, Nielsen sent an advisory to clients saying that you couldn’t simply subtract Live viewers from Live + 7 Days to calculate time-shifted viewing. Since that’s what everyone was doing, and it made logical sense to do so, many of us research types started to wonder why. It raised some uncomfortable questions about exactly how these calculations were done, because Nielsen quickly stopped saying it. If you specifically asked them they would tell you, but otherwise they never brought it up again.

While many people think the methodology for calculating C3 takes fast-forwarding through commercials into account, and only measures exposure to the commercial minute, this is actually not entirely correct. It has to do with the way Nielsen measures viewing to the average minute. Rather than counting the majority of viewing to the average minute, it takes the plurality of viewing. In other words, the channel viewers tuned to the longest during the minute. If, for example, in a given clock minute, you are watching 20 seconds of ABC, and 10 seconds each of four other networks, you are counted as watching ABC for the entire minute. If there is no plurality for that minute, Nielsen goes back to the previous minute and uses that plurality for both minutes.

Nielsen’s rules for allocating minute-by-minute viewing were designed for a time when virtually no one had remote control and it actually took a minute or more to get up and change the channel. In the 1960s and 70s, plurality of viewing to a given minute was pretty much the same as viewing to the entire minute. Individual minutes were not reported, so it didn’t matter how Nielsen measured them. They were simply aggregated up to average program ratings. No one ever thought about how viewing to a single minute was derived.

When it comes to time-shifted viewing, however, the flaws in C3 methodology become apparent. With live viewing, there are multiple channels. During a commercial break, you can stay on that channel for 20 seconds and then scan several other channels during a given clock minute. When you DVR a program and play it back, however, there is only one channel. The majority and plurality of viewing are therefore the same. If you are playing back a program, watch 20 seconds of a commercial minute and fast-forward the remaining 40 seconds, your viewing falls into something Nielsen calls AOT (“all other tuning”), and the commercial minute will receive no credit for your viewing (because both the majority and plurality of tuning is not to the commercial minute). You would need to be tuned to the majority of a clock minute to be counted in delayed DVR viewing. So, Nielsen’s methodology for counting live commercial minutes and delayed commercial minutes are not only different, they are both fundamentally flawed.

Nielsen still can’t accurately measure streaming, and won’t be able to until its sample reflects individual streaming service penetration and until it can measure viewing on all platforms and devices. Netflix’s two minutes of viewing data is meaningless gibberish that tells us nothing about how many viewers are actually watching anything. The press should stop repeating (as opposed to reporting) these bogus numbers provided by streaming services. Is Squid Game really Netflix’s most popular series ever? Maybe. If ABC said 50 million people watched Grey’s Anatomy this month without any third-party verification, I doubt anyone would report it as a real number. In reality, there are no streaming data that is anywhere near being comparable to linear ratings reported by Nielsen or ComScore. The fact that Nielsen only reports on titles from Netflix, Hulu, Prime Video, and Disney+ (it just added AppleTV+), and only measures streaming on a TV set, is an ongoing embarrassment. Netflix has repeatedly said that Nielsen’s limited reported streaming data is “not even close” to the actual numbers.

A number of advertisers, media agencies, and industry trade organizations have joined NBCUniversal’s Measurement Innovation Forum, which is designed to evaluate current audience measurement methodology and come up with alternatives to Nielsen. In August, NBCU sent out a request for proposal (RFP) to more than 50 companies (including Nielsen) to help “build a new measurement ecosystem for us that reflects the future.” Ironically, this is not in response to the basic flaws in current C3 measurement, but rather was spurred by the problems Nielsen encountered maintaining its national people meter sample during the pandemic – which resulted in reported network audience declines that seemed illogical to say the least.

This seems somewhat similar to the Council for Research Excellence (CRE). I was one of the founding members of this group, formed in 2005, which consisted of 40 top research executives from major Nielsen clients – representing advertisers, media agencies, broadcast and cable networks, syndication companies, local television stations, and industry trade associations. There are obviously some significant differences.

The CRE was designed as an independently operated group, which was basically set up so Nielsen could avoid government intervention into how it measures media audiences. It’s stated goal was to evaluate Nielsen measurement methodology and recommend ways to improve. Nielsen funded the research at a cost of about $3.5 million per year (although having no say in the projects we undertook). The CRE’s first major effort was the landmark Video Consumer Mapping Study, which still stands as the best original research into consumer media habits I’ve ever seen. The study was conducted in 2008 by the Ball State University Center for Media Design and Sequent Partners. This study cost about $2.5 million, a number simply out of the ballpark for any agency or network to conduct on its own. At the time, it seemed as though the CRE was the only industry entity capable of doing real good independent research, designed solely to advance how audiences are measured, without any sales-related agenda or bias – in retrospect, perhaps a naïve notion. While there were several more interesting analyses produced by the CRE over the years, it never lived up to its initial promise and Nielsen pulled funding at the end of 2017.

The NBCU-led effort is obviously not funded by Nielsen, and it remains unclear how much any accepted proposal will cost and who will fund it. Also unclear is whether this is designed to find an alternative to Nielsen or a supplement to Nielsen.

So, how do we “fix” TV/video audience measurement? If the real (as opposed to PR) goal is to actually build a better system, there are three basic steps that need to be taken. Here is my proposal to NBCUniversal’s Measurement Innovation Forum:

The first step should be to determine what current Nielsen measurement is doing right and wrong.

Develop a sample of 300 or so industry researchers, people who are adept at detailed work and understand how audience measurement works. Nielsen (and others) would meter their TVs, DVRs, and any other video viewing capable devices they own. They would also be given portable meters to measure their exposure to out-of-home video and audio.

Set up several different scenarios, from the simplest to the most complex viewing environments, for what and how each participant will view video content and commercials, in-home and out-of-home during a single day.

Participants would then log in their video and advertising viewing (down to the second). They should write down their media behavior in minute detail, what they are watching, what platforms they are using, whether they are time-shifting, when they are fast-forwarding through commercials, when they switch channels, which commercials they are seeing (and hearing), etc.

Compare their actual viewing to what the meters report. We would then be able to address weaknesses in audience measurement, see how much real-world viewing is not being captured by current methodology, and gauge the differences between such things as commercial exposure (the opportunity to view) and actual viewing, and between individual commercial viewing and C3.

Not only will this provide, for the first time, a look at how accurate reported ratings are, but it will also tell us exactly where improvements to audience measurement need to be made (which was the original but unfulfilled purpose of the CRE).

The second step is to determine whether samples or panels are even adequate to measure national video viewing in today’s increasingly splintered media environment. I would argue as currently structured they are not.

The whole purpose of a TV sample is to be representative of the total U.S., with the idea that you and your demographic cohorts have similar viewing habits. Your cohorts are determined based on characteristics that Nielsen has determined impact viewing behavior – such as age, sex, race/ethnicity, presence of children, income, education, language spoken at home, etc. Also important is whether or not you have cable/satellite/telco (i.e., pay TV services) or DVRs. On occasion, Nielsen has added certain things to the list, but even then, it was always with the impact on linear TV viewing in mind.

In the past, broad platform mattered more than individual platform. In other words, whether or not you have cable does not require the sample being representative of every cable system, because that does not significantly affect viewing choices or behavior. Nor is it important to know what type of DVR you have, since that will not really impact your viewing behavior and how much you fast-forward through commercials. Whether or not you subscribe to streaming services, however, is not the same. If you only have Netflix, the programming available to you, and your actual viewing habits, will be dramatically different than if you only subscribe to Paramount+. Likewise, if you bundle Disney+, Hulu, and ESPN+, and add HBO Max, your viewing habits will be substantially different than if you have Netflix, Amazon Prime Video, Peacock, and Apple TV+. And there won’t just be differences in what you stream, there will be significant differences in your linear TV viewing as well. The only way to have a meaningful television sample, is to accurately represent the total U.S. based on every possible combination of streaming service and cable/satellite/telco subscriptions. This means that the make-up of Nielsen’s national and local samples could need to change dramatically every year. The days when all Nielsen needed to worry about was cable and DVR penetration are gone forever.

The third step is to decide if a single source or multiple sources are preferable for measuring multiple current and future platforms. I used to be firmly on the side of believing single-source measurement was the way to go. I’m no longer so sure that any one company is capable of measuring all video viewing on all platforms.

A final note in the category of “be careful what you wish for” - understand that having more accurate video viewing data is likely to make few people happy. Although advertisers do want the most accurate data, they and their agency representatives need stable (i.e., projectable) audience data in order to effectively plan and buy commercial time. Networks, on the other hand are interested primarily in higher ratings. While the high cost of supporting a competing national measurement service to Nielsen is one factor in continuing to only have a single currency, the main reason is that none have demonstrated they would produce higher ratings.

The only real way to put pressure on Nielsen to make fundamental changes or to actually go with an alternate measurement system is to move toward one-year contracts. As long as all the media conglomerates continue to sign long-term 5-to-7-year deals, not much is going to change.

Posted at 10:36 AM in Commercial Measurement, Research, Streaming, Television, TV Programming, Upfront | Permalink | Comments (0)

Does the Media Industry Really Want More Accurate Ratings? A Brief History of TV Audience Measurement (9/21)

The advertising and media industries have traditionally relied on Nielsen for national and local television audience measurement as currency for the buying and selling of commercial time (and for evaluating the video landscape). Now it seems that several forces are at work conspiring to have this tradition come to an end – most notably, Comcast-owned NBC Universal, a long-time Nielsen critic, which recently issued a request for proposals to more than 50 companies (including Nielsen) to “build a new measurement ecosystem for us that reflects the future.” They believe, as do many others, that current research methodologies are not able to fully measure viewers in an increasingly splintered video environment, and a single source or single metric is no longer viable.

Whether NBCU or the other media conglomerates want to actually replace Nielsen, or develop systems to operate alongside Nielsen is unclear. But it should be clear that no advertiser or media agency in their right mind is going to accept a measurement service where the sellers have oversight into how their own audiences are measured. There will still need be a third-party independent measurement, and Nielsen will likely continue to be a major (if not the only) player.

Before I get into a brief history of TV audience measurement and some of the issues involved, here are some basic points worth noting.

There have been more changes to the video viewing landscape in the past 15 years than in the previous 50. Since 2005, there has been a sea change in what, where, how, and when consumers could access video content – from the introduction of Apple’s first video iPod, to the widespread use of DVRs, to the rise of social media, to the first smartphones, to the availability of multi-media devices, to the launch of multiple streaming services. It’s hard to believe Netflix’s first hit series debuted just eight years ago. These changes have been rapid and constant, and are making measuring video viewing and audience behavior more complex.

Research is traditionally slow to change and adapt to shifting marketplace conditions. Before people meters brought the first major change to TV audience measurement in 30 years, the 3-network, 15-channel, one-screen, live-viewing TV world did not require much change in how viewers were counted. This enabled Nielsen to continue trudging along without needing to innovate too much or pivot too quickly. More than 20 years separated the two fundamental changes in national TV audience measurement (aside from sample-size increases) – the introduction of people meters in 1987 and the shift from program ratings to average commercial minute ratings (C3) in 2009.

Nielsen is an industry-mandated monopoly. There have been several attempts by various companies to compete with Nielsen (which I discuss later in this report). Except for ComScore, none have managed to pose any real threat to Nielsen’s dominance. While they have served to pressure Nielsen to make improvements to its own service, the industry (both buyers and sellers) has balked at funding two audience measurement companies that would essentially provide the same thing. While everyone likes to complain about Nielsen, so far few have wanted to spend the money required to really do much about it or foster any real competition.

Does anyone really want the most accurate ratings possible? Advertisers obviously should, but I would argue that neither buyers nor sellers do. Sellers want higher ratings, buyers want stability – accuracy is conducive to neither.

Sellers want higher ratings – you never hear any network complain that Nielsen is overcounting their audience (although for years it did). Back when we were evaluating AGB, as soon as I saw that they were not producing higher ratings than Nielsen, I knew that network support would fade. And why have some networks pushed so hard for viewing in bars and restaurants to be included in currency measurement? Certainly not because they provide an accurate portrayal of commercial exposure. Higher reported ratings.

Buyers want stability – accuracy is fine, but stability is required to be able to project future performance. Anyone who was in a media agency research group when the industry switched over to buying and selling based on C3 remembers the chaos that ensued during the upfront and for much of that year. There’s a reason that what was supposed to be a “one-year band-aid” is still being used 12 years later. Moving to more accurate commercial measurement would require not only additional staff, but would result in significantly less stable and projectable ratings.

Here’s a brief look at some of the issues the industry has been grappling with for years…

Current Measurement is Not Nimble Enough to Handle Rapid Change

Until the early 2000s, the pace of change to how and where viewers received content was relatively slow, enabling cumbersome media measurement conglomerates to trudge along with serviceable audience measurement.

It’s hard to imagine now, but before people meters debuted in 1987, the national Nielsen television sample was only 1,200 homes, and demographic data was only available 36 weeks of the year. In a three-network, one-screen, single platform, 15-channel, live-viewing world, this was acceptable. People generally had the same access to the same channels and devices, and as cohesive groups of people aged, their media habits were largely predictable.

Here’s a brief look at how the video media landscape has evolved since then:

During the late 1980s, VCRs started to become prevalent, eventually being owned by 90% of U.S. TV households. Watching pre-recorded videocassettes became the first major new use of the television set since videogames. This contributed to the broadcast networks giving up on original scripted series on Saturday nights (which was now the biggest movie rental night). They subsequently cut back on airing made-for-tv and theatrical movies as well. Time-shifted viewing, now possible for the first time, remained relatively minor (about 5% of overall primetime viewing).

The home VCR became the fastest growing electronic device since television itself, and caused real problems for audience measurement. It marked the first time Nielsen had to admit it couldn’t measure an element of television viewing. It was able to capture VCR recording, but playback among individual people remained beyond its scope.

In 1990, the average home could still only receive 33 channels. Viewing habits remained relatively stable, and aside from VCR usage, there weren’t many major challenges to audience measurement. During the early-to-mid 1990s, as cable and satellite television expanded, and phone companies were allowed into the TV business, the number of channels available to the average home began to rise sharply.

In the late 1990s, DVRs became a reality, but growth was considerably slower than it had been for VCRs. It would take another decade before DVRs were even in 20 percent of the country and needed to be addressed in developing television samples for audience measurement.

Prior to 2005, changes to the media landscape – what was available to view and how it could be viewed – were gradual. Most people wound up getting the same access to almost everything. The slow pace of change made predicting consumer television viewing habits relatively simple, and slow-to-change research companies didn’t have to pivot too quickly, nor innovate too often.

Since then, rapid change has been the norm – from the introduction of Apple’s first video iPod in 2005, to social media led by Facebook and Twitter in 2006, to the first iPhone in 2007, to the launch of Netflix and Hulu in 2008/2009, to the first iPad in 2010.

Netflix’s first original scripted hit (House of Cards) debuted just over eight years ago, in 2013. Prime Video released its first original scripted series the same year (Alpha House and Betas). Hulu debuted its first successful original scripted series in 2013 as well, with the teen drama, East Los High. Other subscription video on demand services followed. CBS All Access (now Paramount+) debuted in 2015. In late 2019, Disney+ and Apple TV+ joined the mix, followed by HBO Max and Peacock in mid-2020. The eight major streaming services are now spending at least as much on original programming each year as the five broadcast networks combined. There are also several niche streaming services available to viewers. Today the average home can receive more than 200 channels and subscribes to three or four streaming services.

Can Samples Even Measure the TV Universe Anymore?

Unless they are representative of the total U.S. population based on subscriptions to individual streaming services, and combinations of streaming services, Nielsen samples can’t accurately measure TV viewing anymore.

The whole purpose of a TV sample is to be representative of the total U.S., with the idea that you and your demographic cohorts have similar viewing habits. Your cohorts are determined based on characteristics that Nielsen has determined impact viewing behavior – such as age, sex, race/ethnicity, presence of children, income, education, language spoken at home, etc. Also important is whether or not you have cable/satellite/telco (i.e., pay TV services) or DVRs.

In the past, broad platform mattered more than individual platform. In other words, whether or not you have cable does not require the sample being representative of every cable system, because that does not significantly affect viewing choices or behavior. Nor is it important to know what type of DVR you have, since that will not substantially impact your viewing behavior and how much you fast-forward through commercials.

Whether or not you subscribe to streaming services, however, is not the same. If you only have Netflix, the programming available to you, and your actual viewing habits, will be dramatically different than if you only subscribe to Paramount+. Likewise, if you bundle Disney+, Hulu, and ESPN+, and add HBO Max, your viewing habits will be different than if you have Netflix, Amazon Prime Video, Peacock, and Apple TV+. And there won’t just be differences in what you stream, there will be significant differences in your linear TV viewing as well. The only way to have a meaningful television sample, is to accurately represent the total U.S. based on every possible combination of streaming service and cable/satellite/telco subscriptions. This means that the make-up of Nielsen’s national and local samples could need to change dramatically every year. The days when all Nielsen needed to worry about was cable and DVR penetration are gone forever.

Why Virtually All Attempts to Compete with Nielsen Fail

Over the years, there have been a number of unsuccessful attempts by other companies to compete – both on a national and local basis – not because Nielsen did anything in particular to impede them, but rather because the industry didn’t provide support long enough for them to be viable. The most common result has been to pressure Nielsen into making improvements to its own methodology and increase its sample size.

Here’s a brief look at the most notable previous attempts to compete with Nielsen.

In 1985, after more than 30 years of being essentially unchallenged in the national TV audience measurement arena, British company AGB entered the game and posed the first real threat to Nielsen’s dominance. It had been using something called people meters in Europe, and saw an opportunity to expand into the U.S. market. AGB had the advantage of actually using a better methodology than Nielsen’s antiquated meter/diary approach.

AGB spent nearly two years testing its people meter in Boston before trying to roll it out nationally. Nielsen responded by launching its own people meter, and increased its sample from 1,200 to 2,000 homes (to match the size of AGB’s sample). The following year Nielsen increased its sample to 4,000. As a result, AGB was only able to sign up one broadcast network (CBS, which had long been a Nielsen critic) and a few ad agencies. I remember one of my first major decisions as Manager of Broadcast Research at a major ad agency was whether to continue supporting AGB (we had paid the first-round ask of $25,000, but balked at the second-round request). Without widespread industry support, AGB ceased its U.S. operation in 1988. The main problem was that ad agencies were not willing to pay for two identical national measurement services, and the networks were not willing to support a new ratings system that did not report higher numbers than Nielsen.

In 1987, D. Percy & Co. developed a passive meter, which used a heat-sensitive, infrared device to detect when someone was in front of the television set and when someone left the room. But when people found out that the heat sensors could be thrown off by the presence of a large dog, jokes ensued, and any potential support fizzled. Nielsen announced its own plans to develop a passive meter, which never came to fruition.

In 1991, Arbitron’s ScanAmerica was way ahead of its time as it tried to marry TV viewing to product usage (sample participants were asked to run a “scanner wand” over the product code on each store-bought item). This single-source approache seemed to be what advertisers had been seeking. Once again, CBS was the first broadcast network to support an attempt to compete with Nielsen. Unfortunately, no other network, only one ad agency, and just a handful of advertisers, were willing to provide funding – a lack of belief in the methodology, the limited number of “scannable” items, and an unwillingness to invest in an unproven system, were cited as the main reasons. Without industry support, Arbitron could no longer afford to continue with the system, and ScanAmerica shut down in late 1992, only a year after being introduced. Had ScanAmerica come along a few years later, when the economy was back on track and other viewing sources were cutting into network ratings, it might have received more interest.

Arbitron, which had been competing with Nielsen for four decades in collecting local TV ratings (in roughly 200 markets) canceled the service in 1993. Local stations, which had been forced to subscribe to both Nielsen and Arbitron to accommodate advertisers and their agencies, who were more or less equally divided among the two services, were under increasing economic pressure from cable and other competition. It no longer made financial sense for them to support two essentially identical rating systems. Nielsen, which already had a lock on national TV measurement, won the day. Nielsen acquired Arbitron (renamed Nielsen Audio) in 2013.

In 1993, the broadcast networks tried to develop a rival rating service, SMART (System for Measuring and Reporting Television), with a new people meter provided by Statistical Research, Inc. (SRI). But they couldn’t get the necessary ad-agency support and it never got beyond the “media lab” stage (I thought at the time SRI did great work and provided valuable insights). It folded in 1997.

erinMedia’s plan to launch a new national ratings system to collect and process viewing data from set-top boxes was derailed in 2005 when Nielsen announced it was forming a new unit to essentially do the same thing (which caused erinMedia’s funding to disappear). erinMedia filed an anti-trust lawsuit against Nielsen Media in 2005, which was confidentially settled in 2008.

In 2009, NBC was the driving force behind a consortium of companies, which included the four major broadcast networks, some large cable companies, along with several big advertisers and media agencies, in an effort to back a potential new competitor to Nielsen. I don’t recall specifically what happened with this effort, but no new Nielsen rival emerged – although it did contribute to Nielsen finally measuring DVR homes, more screens, and commercial minute ratings (C3).

Today, ComScore, which merged with Rentrak in 2016, stands as the only real competition to Nielsen – primarily with local TV stations. Most major media agencies, networks, station groups, and streaming services subscribe to some level of ComScore data. And given the current situation (outlined below), the company is probably feeling good about the possibility of expanding its footprint.

The MRC Suspends Nielsen Accreditation: So?

This should be a very big deal, but so far the industry isn’t acting that way. While researchers are familiar with the Media Rating Council (MRC), until fairly recently, most of the folks who actually buy and sell media had little contact with or knowledge about the company. The MRC was formed at the behest of the U.S. government following the 1950s quiz-show scandals. It conducts audits of companies that measure media to basically determine whether they do what they claim to do and are in compliance with industry standards.

Even before the pandemic, and the VAB’s (the TV network industry trade group) claim that Nielsen was dramatically undercounting television usage, I had written about how the rise of multiple streaming platforms and the fact that the average home subscribes to at least three streaming services, resulted in Nielsen no longer being able to capture the full scope of television viewing.

Combine this with clear examples of problems related to the COVID-19 pandemic, when Nielsen field agents could not enter its 40,000 national television homes to conduct regular maintenance of its sample. The VAB claims this resulted in significantly lower reported total weekly reach levels than pre-pandemic (from 92% to 87% - which is an unprecedented single-season drop when not changing measurement methodology), and major viewing declines among the TV networks, (in the neighborhood of 20%). Neither seems reasonable at a time when virtually everyone was confined to their homes.

The VAB asked the Media Rating Council (MRC) to suspend its accreditation of Nielsen’s TV data. Nielsen, in a curious move, said it wanted a temporary “hiatus” from MRC accreditation so it can better “focus on innovating our core products, continuing to deliver data that the industry can rely on and ultimately creating a better media future for the entire industry.” This seemed designed to avoid getting bogged down in a process that could only provide negative publicity for Nielsen, which hoped to distract the industry into focusing more on such things as wearable portable meters, as well as its new Nielsen One service, which promises total cross-platform measurement.

It would be far worse for the MRC to independently revoke accreditation than for Nielsen to voluntarily suspend it on its own. The MRC responded saying that a company needed its approval to suspend accreditation, and that this issue was so serious that it “requires further consideration by the full MRC board.” It also noted that Nielsen’s National Television Service had some “deep-rooted ongoing performance issues” that threatened it accreditation status even before the pandemic. As I was writing this, the MRC announced that it was indeed suspending Nielsen’s accreditation.

This won’t necessarily have much impact on whether the industry continues to use Nielsen data, but it does open the door to other companies, such as ComScore, to argue that Nielsen is no longer the “gold standard.” ComScore has reportedly asked the MRC to move its own upcoming audit for its service from early 2022 to October 2021.

More importantly, it lends credence to the idea that transparency, innovation, and new measurement yardsticks are urgently needed in an industry that has been traditionally slow to make any substantial change. The switch from meter/diary to people meters and the shift from program ratings to C3 were more than 20 years apart. The next five years could see more innovation in TV/video currency measurement than the past 50 years. Nielsen will certainly have a major role in this, but not the only role. On the other hand, we’ve heard talk like this before. Let’s see what happens when buyers and sellers have to agree on not only what needs to be changed, but how it’s going to be funded.

What the Industry Needs to Do to Improve Audience Measurement

The first thing that needs to be done is to get a handle on what current rating services can and cannot accurately measure. While this might sound logical and simple, I can’t remember this ever being done (outside of the old telephone coincidental days). Even when the industry took the major step of moving to commercial minute measurement (C3) in 2009, there was precious little analysis done into the methodology Nielsen uses to calculate these ratings.

The only good attempt to get some of these answers was in the Council for Research Excellence’s (CRE) landmark Video Consumer Mapping Study in 2007-08. I was co-Chair of the CRE’s Media Consumption and Engagement Committee, which commissioned the study. One of the lesser-known findings was that Nielsen’s overall usage levels of households and broad demographic segments, such as total viewers and adults 18-49 were remarkably similar to the observed viewing behavior in our sample. Once you started to look at narrower age groups, however, the reported Nielsen data started to stray significantly from the observed viewing data. And this was just overall TV usage levels, not individual program ratings (and was 13 years ago, before video viewing was nearly as splintered as it is today). DVR penetration was barely 20% of the U.S., and there were no streaming services. At the time, I suggested we replicate the study every five years, but that never happened – primarily because it was so expensive, and the CRE had other priorities.

It is actually not that difficult to figure out how accurate current TV measurement is. When I was on the CRE, I proposed a methodology for gauging how accurate Nielsen was at measuring an increasingly fragmented video viewing environment. Nielsen didn’t want to have anything to do with it then, but the industry should consider it now.

Here’s what you need to do:

Develop a sample of 100 or so of the top researchers in the industry (buyers, sellers, advertisers), who are adept at detailed work and understand how audience measurement works. Nielsen (and others) would meter their TVs, DVRs, smartphones, and any other video viewing capable devices they own. They would also be given portable meters to measure their exposure to out-of-home video and audio.

Set up several different viewing scenarios for what and how each participant will view video content and commercials during a single day.

Participants would then log in their video and advertising viewing (down to the second).

Compare their actual viewing to what the meters report. We would then be able to see and address weaknesses in audience measurement, see how much real-world viewing is not being captured by current methodology, and gauge the differences between such things as exposure (the opportunity to view) and actual viewing, and between individual commercial viewing and C3.

This will tell us what the industry needs to do next. It would be a good idea to have Nielsen, ComScore, and a few other companies involved. The project could be overseen by a group of retired research executives or some well-respected company with no current skin in the game.

Until something like this is done, all this talk will be little more than the sellers trying to get higher ratings, or moving away from just measuring eyeballs to the even more difficult to measure behavioral and attentiveness data (which everyone has been discussing for years). There has always been a tendency to start focusing on the next shiny object before actually fixing what is still the biggest piece of the pie – in-home viewing to video screens. But if we don’t get that right, measuring real cross-platform viewing will remain out of reach.

We should be clear about one thing, however. Despite claims to the contrary, neither buyers nor sellers have traditionally wanted accurate audience measurement. Sellers want higher ratings and buyers want stability (so they can project future performance). Accurate ratings are conducive to neither. Anytime you really improve audience measurement, the highest rated vehicles tend to decline and the lowest rate tend to increase. And when you get more granular data, it will tend to be less stable from day to day or week to week. Individual commercial ratings will almost certainly be less stable and projectable than C3.

You only need to look at what happened with C3 ratings to understand what’s going on. The stated goal of advertisers and agencies has always been drilling down to actual commercial audiences. The reason why average commercial minutes were used as a surrogate was ostensibly because the computer systems that processed Nielsen ratings for pre- and post-buys (at the time, Donovan Data Systems and Datatech) were unable to report actual minute-by-minute ratings.

Implementing C3 instead of actual commercial or commercial pod ratings was a good excuse for agencies, which would have needed to hire extensive additional staff to deal with reams of more granular data, with little stability in reported numbers (making projections of future performance much more complex). It was a good excuse for advertisers, who otherwise might have the creative execution blamed for poor individual commercial ratings. It was also a good excuse for sellers, since we all did extensive research that indicated C3 ratings, as measured by Nielsen, would not be far off from the live program ratings it had previously reported (which, of course, is logical hooey – there is no way you can tell me that viewers are watching just commercial minutes, even over three days, at the same degree as those watching the actual program at the time it airs – that would mean most DVR users are not fast-forwarding through commercials, which is ridiculous).

C3 was planned as a one- or two-year band-aid until the industry’s pre- and post-buy systems were able to process more granular data. I worked with both Donovan and Datatech, and they had this capability the following year. That was 11 years ago.

So What Happens Next?

That’s a good question. I doubt whether the industry will follow my proposal to discover the actual weaknesses in current audience measurement techniques. That would require fixing them, which would be expensive, time-consuming, and not necessarily supply the answers anyone wants to deal with. So, if past is prologue, we’ll probably see more talk and several new proposals on how to “better” measure video and cross-platform viewing. New companies will come in with innovative techniques for measuring the video landscape (or portions of it), but won’t get the funding they need to go through the year-long (or more) scrutiny the industry will require. Nielsen will make some changes to how it operates – and possibly re-submit for MRC accreditation (unless the advertisers strangely continue to not be bothered by any of this). If the media conglomerates sign long-term contracts with Nielsen during the next round, we’ll know most of this was just talk. If they take a page out of the NFL’s playbook, and sign a one-year deal, making a measurement service prove itself, then maybe real change will happen.

Posted at 10:33 AM in Commercial Measurement, Research, Streaming, Television, TV Programming, Upfront | Permalink | Comments (0)

A Young Media Person's Guide to Evaluating Pilots (7/21)

The broadcast networks recently announced their respective fall schedules in a series of virtual upfront presentations to the advertising industry. Because of the pandemic, last year was the first time since I’ve been in this business that I didn’t see any pilots before the fall season began. This year, as the world is inching back to normal, COVID production schedules are delaying several pilots until later this summer (although I have seen a few).

So, while I had planned to include my predictions of new series hits and misses in this report, that will have to wait until more pilots are available. This report will focus exclusively on how to evaluate the success potential of new series pilots.

In the 40 years or so I’ve been analyzing the television landscape, the benchmark of success for a new broadcast series has continually shifted, with the bar gradually getting lower and lower.

In the 3-network world of the 1980s, as cable was just starting to impact the broadcasters, if a new show didn’t generate at least a 30 household share (something that simply could not happen today for a regular series), it was considered borderline – even if it won its time period. Although back then, if a network believed in a show it would often be given time or moved to a new time period to see if it could gain an audience. One network was usually so far ahead or behind the pack that giving a show a network head of programming (or his spouse) liked more time had little downside.

During the 1990s, as three networks grew to four, and then six, and cable began luring away broadcast viewers, a 20 share or a strong demographic performance was good enough for a show to be renewed. The fledgling WB and UPN networks (since combined into CW) had different and much lower metrics of success – they were all about the under 35 crowd.

Throughout the 2000s, as cable started airing more original scripted series, ratings and shares became less significant as an indicator of success. Rankings became more telling. Finishing first or second in a given time period, ranking reasonably high among certain age groups, doing well relative to your network’s other programming, and holding onto a decent portion of your lead-in audience, all factored into whether a new show would make it to a second season or beyond.

In the 2010s, as more people started owning DVRs and multi-media devices, and streaming services started to grow, definitions of success became even more nebulous – finishing first or second in a time period, holding a good portion of your lead-in audience, performing well among certain demographic segments, doing well relative to the network’s other programming, receiving a solid audience bump in delayed time-shifted viewing, and having a strong social media following, all contributed to whether a new show was perceived as successful.

How to evaluate the success potential of a pilot episode, however, has not changed all that much over the years. But how long a new show is given to reach that potential has. Today, the network races are closer than ever, with tenths of a rating point often separating first and fourth place. When broadcast networks care more about rankings than growing their audience, potential is sacrificed in favor of anything that might immediately do even slightly better. Gone are the days when a Cheers could debut as the lowest rated show on television, but end its 11-year run in the top-10. Or a low-rated Hill Street Blues could sweep the Emmys and become a hit. Or a Seinfeld can air for three years in mid-season before gaining enough viewers to make the fall schedule. Or a low-rated Miami Vice can become a word-of-mouth hit during summer reruns. Or an Everybody Loves Raymond can debut with low ratings on Friday, move to Monday, and become a hit. Or a show like The Big Bang Theory can finish its first season in 68^th place and finish its 12^th season as the longest running multi-camera comedy ever.

Traditionally, where a new series is placed on the schedule has been just as important, maybe more so, than the quality of the show. It is still a consideration, but much less so than in years past. At one time, scheduling a new show opposite E.R., CSI, or Grey’s Anatomy, was virtually guaranteed to fail. A new show following Seinfeld, Roseanne, or NCIS, on the other hand, was a good bet to draw a sizable audience. The broadcast world today is much different and more splintered. There is no NBC Thursday night “Must See TV” lineup anymore, when they could throw anything in the 8:30 or 9:30 slot and get a solid rating. There are no 30+ share programs or time periods anymore. A strong lead-in, while still valuable, is not nearly as significant as it used to be. A good show can succeed anywhere and a bad show can flop anywhere. In the era of Peak TV+, the concept of “least objectionable programming,” a phrase with which people under 40 are probably unfamiliar, no longer applies.

So being able to evaluate a new show’s success potential based solely on the pilot episode is more important than ever. Here are some guidelines:

Comedies should be funny because of the characters, not the plot. Questions worth asking when evaluating a comedy pilot – did some specific event happen in the pilot to make it funny? Is it a romantic comedy where the two main characters meet in the pilot? Is it a “fish out of water” comedy where the main character returns to his or her small home town after years of having a career in the big city? Does some poor schlub somehow strike it rich or get some major promotion at work? Does someone not ready for a family inherit his or her sibling’s kids? You get the idea. By the second episode, these plot-driven comedies often become substantially different shows. So even if these pilots are hilarious, you need to look more deeply to determine whether you think it can be maintained on a weekly basis.

In more my 30+ years evaluating television, the two funniest pilots I’ve seen were, The Famous Teddy Z (1989) and The Golden Girls (1985). The former lasted one season, the latter ran for seven.

The Famous Teddy Z starred Jon Cryer as a lowly mailroom clerk at a talent agency, who, through a bizarre sequence of events, becomes the top talent agent at the company. The problem was that by the second episode it was a different show. The events that made the pilot so hilarious no longer existed, and the funny couldn’t be maintained on a weekly basis – and there wasn’t much chemistry among the cast members.

I remember watching The Golden Girls at the NBC Upfront in the days when the networks showed a number of full pilots during their upfront presentations or immediately after. People were literally falling out of their seats laughing. But I don’t remember anything specific about the pilot. I think it was mostly just the four women sitting around a table talking. It was funny because the characters were funny together, not because of anything that happened in the pilot.

In 2017, I cited ABC’s new show, The Mayor (which co-starred Lea Michele, who had become a star on Glee), as one of the best comedy pilots. But I also pointed out that while the events that led up to an aspiring rap singer becoming mayor was both timely and funny, by episode two it would be a different show, and its success would hinge on whether they could maintain the comedy in this new situation (they couldn’t). It lasted just one season. There are many similar examples over the years.

Most of the funniest and longest-running network comedies, from All in the Family, M*A*S*H, and The Mary Tyler Moore Show, to Cheers, Seinfeld, and Friends, to Roseanne, Home Improvement, and Full House, to Everybody Loves Raymond, Modern Family, and The Big Bang Theory, lasted because they had casts that gelled and fit well together. Viewers looked forward to watching slight variations of the same situations week after week – because of the characters, not the plots.

Medical, police, or legal dramas can seem compelling based on the cases presented in the pilot episode. We need to consider the potential strengths and charisma of the lead characters, and ongoing themes of the series beyond the pilot’s script.

I used to also say that sometimes the pilot might miss the mark but the series could get better over time. Of course, if the pilot misses the mark these days, it usually isn’t given enough time to get better.

I pegged ABC’s The Good Doctor as one of the best medical drama pilots I had ever seen. The characters were strong, and the direction the show was headed seemed clear. It was able to maintain the quality of the pilot from week-to-week and became one of the highest rated shows on television. The same season, I said ABC’s For the People was one of the best legal drama pilots I had ever seen. The characters were strong, and the direction the show was headed seemed clear. It couldn’t find enough viewers and was canceled after its second season.

So why did I think The Good Doctor would appeal to a broader audience, and have a better chance to succeed? It’s not always easy to describe what makes me think one show will work, while an equally good show might not. You often need to look beyond the things that make you like the pilot. I think in this case it came down this – people like to root for a person or a side. With The Good Doctor, the main character is someone people could empathize with or at least root for as he faces the many obstacles that an autistic savant surgical resident might face. Most legal dramas focus on either the prosecutors or the defense lawyers, giving viewers a clear side to root for. For the People presented both the prosecution and defense lawyers as essentially equal sides, with some winning their cases one week and losing them the next. It just seemed to me that would not have as broad an appeal. Another important indicator is that ABC had other programming in the same genre as The Good Doctor, making it easier to promote the new show (given the ridiculous policy of not cross-promoting broadcast series on other broadcast networks). For the People did not have similar programming on its host network – it also debuted in mid-season, which often makes a show harder to market, particularly if a network gives its promotion short-shrift.

Procedural dramas are a lot like sitcoms. They’re essentially situation dramas. Does the cast gel and will viewers want to tune in to slight variations of the same situation week after week? These can be telling when you compare successful procedurals and their spin-offs. The differences between the excellent Criminal Minds and the failed Criminal Minds: Suspect Behavior and Beyond Borders, or the original CSI and the short-lived CSI Cyber are dramatic (and demonstrate the importance of good casting – CSI: Miami and CSI: NY were both successful). All of the NCIS’s, on the other hand, managed both the casting chemistry and the mixing of drama and humor quite well (and all were hits). A new entry in the franchise, NCIS: Hawaii, debuts next season. FBI and FBI: Most Wanted are both succeeding, and we’ll soon see if the upcoming FBI: International can follow suit. 911 and 911: Lone Star are both hits. I’m wondering if the new Law & Order: For the Defense will have the same obstacles as For the People (showing the prosecution and defense in equal light), although it has the power of the Law & Order franchise name. In today’s splintered viewing environment, with linear TV on the decline, extending successful franchises is as close to a sure bet as you can get.

Dramas that focus almost exclusively on the characters’ work lives (most procedurals) tend to appeal to older viewers, while those that include just as much emphasis on the characters’ personal lives (i.e., sex lives) tend to appeal to a younger audience.

It typically takes three or four episodes before a drama settles into its regular audience level. New CBS dramas tend to get high viewer sampling – its audience base is the most network-loyal, and they typically check out any new CBS procedural. So it sometimes takes a new CBS drama longer to hit its regular performance level.

For certain types of action series such as The Equalizer, FBI, S.W.A.T., 911, and Seal Team, viewers know exactly what to expect from the get go, and it’s fairly easy to predict how they will perform.

Shows make stars, stars don’t make shows. The failed TV series with major stars attached are too numerous to list here. Who remembers Hugh Jackman in Viva Laughlin, Halle Berry in Extant, Octavia Spencer in Red Band Society, Katherine Heigl in Doubt, Kyra Sedgwick in Ten Days in the Valley, or Edie Falco in Tommy? Just a few examples.

In most cases it’s the show that makes the star, not the other way around. Hit shows, ranging from comedies such as, Cheers, Friends, Seinfeld, Married…With Children, Everybody Loves Raymond, Modern Family, and The Big Bang Theory, to broadcast dramas such as, E.R., The X-Files, CSI, Lost, Grey’s Anatomy, Empire, and This is Us, to cable dramas such as The Shield, The Closer, Mad Men, Breaking Bad, Sons of Anarchy, The Walking Dead, and Game of Thrones, were cast largely with actors who were not well known to the general public at the time.

Some stars, such as Tom Selleck (Blue Bloods) and James Spader (The Blacklist) can bring long-time fans to a new show (and usually appeal to an older audience), but they are the exception.

Established stars (more commonly TV personalities) bring high viewer expectations to a new project, based on previous popular roles, which are often hard to live up to. There are countless people who have starred in one series, but failed in subsequent efforts (and I’m not talking about spin-offs). But some have made the transition from one successful show to another. While both Julia Louis-Dreyfus and Kiefer Sutherland had a failure immediately following their iconic runs in Seinfeld and 24, respectively, she found major success in HBO’s comedy, Veep, and he hit in ABC/Netflix’s Designated Survivor. Michael Weatherly successfully jumped from his role in CBS’s mega-hit, NCIS, to a starring turn in Bull. Likewise, Shemar Moore, who was the most popular character on CBS’s Criminal Minds, successfully left that show to star in S.W.A.T. on the same network.

Between 1971 and 2021, the broadcast networks aired 72 television series based on or adapted from theatrical movies. Only 17 lasted three seasons or more – McCloud (1970-77), M*A*S*H (1972-83), Alice (1976-85), What’s Happening!! (1976-79), The Dukes of Hazzard (1979-85), House Calls (1979-82), Private Benjamin (1981-83), Hotel (1983-88), Mr. Belvedere (1985-90), In the Heat of the Night (1988-94), Buffy the Vampire Slayer (1997-2003), Clueless (1996-99), Friday Night Lights (2006-11), Parenthood (2010-15), Nikita (2010-13), Hannibal (2013-16), and Lethal Weapon (2016-19). That’s a 24% success rate, significantly less than the 32% rate of the average network series.

During the 2016 and 2017 seasons, there were an unprecedented eight new series based on movies. Only one, Lethal Weapon, was even moderately successful (it was canceled due to on-set turmoil rather than low ratings). The others, Uncle Buck, The Exorcist, Rush Hour, Taken, Frequency, Time After Time, and Training Day did not last long. Since then, there has been only one, CBS’s Clarice, in the 2020/21 season. It won’t be back on broadcast, although it might wind up on Paramount+.

Reboots typically don’t work – unless they do. There have been many reboots of successful and not so successful TV shows over the years. Both the positives and negatives are fairly obvious. On the plus side, reboots are pre-sold concepts that don’t require the same amount of promotional weight as a completely new series to generate awareness. They also tend to receive a fair amount of pre-season buzz. Most will get decent viewer sampling, so if they’re good, they have an above average chance to succeed. On the down side, they tend to carry high expectations, which are often hard to meet. Also, younger viewers are often unfamiliar with the series, and older viewers, who liked the original, are often disappointed with the new version.

Popular shows that come back with the original casts can do quite well (see Dallas, The X-Files, Will & Grace, and The Conners). Murphy Brown, on the other hand, didn’t perform well and was canceled after a single season. Reboots with new casts (e.g., Bionic Woman, Ironside, Dragnet, Charlie’s Angels, Melrose Place, 90210, The Odd Couple) often can’t match the original (particularly if the original had iconic casts) and often don’t last long. There have been notable exceptions. Battlestar Galactica became iconic in its own right, far surpassing the impact of the original series. Hawaii Five-0, MacGyver, and Magnum P.I., did just fine, while Walker and Kung Fu (both reboots in name only) are doing well by CW standards.

Pilots often look better watched at your leisure than in your regular viewing environment. Over the years I’ve watched pilots at the broadcast networks with other advertising executives, in a conference room at work with media buyer and research colleagues, on VCRs and then DVDs at home, and these days online on my laptop. I watch them at my leisure with no commercials and no distractions.

When the show premieres on television, of course, it will air following some other program, opposite some other programs, and most viewers will simultaneously be doing some other activity. Just because you like the pilot, doesn’t mean you (or other people) will watch it in a real-world setting. Despite the high degree of DVR and time-shifted viewing that currently exists, scheduling and the competitive landscape are still important to a new show’s success.

Don’t buy the buzz. A recent issue of The Sternberg Report was titled, Does Pre-Season Buzz Really Matter? I examined new broadcast and ad-supported cable series over the past 20 years, and found there is virtually no correlation between how much pre-season buzz a new show generates and how successful it becomes once it premieres.

Social media conversations often provides a good indication of whether a show is poised to grow or decline after it’s already on the air but has little impact before the show debuts.

If you are interested in getting the Pre-Season Buzz issue or any other issue of The Sternberg Report, contact me at [email protected].

Most big hits are accidental. My track record of predicting new series hits and misses is pretty good. Roughly 9 out of 10 shows I think will flop do (it’s much easier to pick a miss than a hit). I’m also not bad at projecting which shows will win their time periods. But the big-time hits almost always come out of nowhere (not counting spin-offs). Anyone who says they predicted E.R., Friends, Law & Order, CSI, NCIS, American Idol, Survivor, Lost, Grey’s Anatomy, Blue Bloods, How to Get Away With Murder, Modern Family, The Blacklist, Empire, 911, This is Us, The Good Doctor, or The Equalizer, would be instant hits is lying. You just never know what is going to connect with a broad spectrum of viewers. The next This is Us is right around the corner. But we won’t know it until after it debuts.

Posted at 10:05 AM in Research, Streaming, Television, TV Programming, Upfront | Permalink | Comments (0)

11/30/2020

New Television Season Things to Ponder

As the pandemic continues to wreaks havoc with life in general, television programming is no exception. Here are a few things worth pondering (or, at least some things I’ve been thinking about) as the new primetime television season gets underway.

Another issue with TV audience measurement
Network promotional follies
Why ratings don’t matter
How network shows are dealing with COVID-19 and police brutality
Netflix goes linear (in France)

Can Nielsen (or anyone) accurately measure TV viewing? I’ve written many columns on various issues I have with TV audience measurement, including the absurdity of advertisers and agencies allowing Nielsen to measure “viewing” in bars and restaurants. But there’s another issue that seldom comes up, which in today’s video landscape is more important than ever – the composition of Nielsen’s sample.

Central to a well-drawn sample, is the idea that you and your cohorts have similar viewing habits. There are generally more than a dozen categories that Nielsen uses, which research has shown are significant factors in what and how much television people view. These include such things as age, sex, income, education, race, language spoken at home, presence of children, etc. Also important, is access to programming. It has been essential that cable and satellite penetration, as well as media device ownership in the sample match the country at large. It didn’t really matter what cable, satellite, or telco system people in the sample subscribed to. They don’t typically have much impact in channel or program availability or usage. Likewise, VCR and subsequently DVR ownership are important, but again, which particular type or brand is not relevant, as it has virtually no impact on which programs are time-shifted.

Streaming, on the other hand, is a different animal entirely. Knowing that 70% of the country has at least one streaming service and 40% have three, and constructing the sample accordingly, is not good enough. People who have just Netflix have substantially different access to programming and have different viewing habits than folks who have just Amazon Prime Video. Likewise, viewing habits are significantly different among those who have Netflix, Hulu, Disney+, ESPN+, and Peacock, than those who have Prime Video, HBO Max, Apple TV+, CBS All Access, and BritBox. For any TV audience measurement service to have relevance, it needs to continually update its sample to match the universe’s subscriptions to specific streaming services (perhaps all that are in at least 10% of TV homes). Otherwise, there’s no way for the sample to be representative of the population at large, and its reported audience data become increasingly less meaningful.

Promotional Follies: In the era of Peak TV+, with more viewing choices available than ever before, it takes viewers longer to even become aware of a new series, much less start watching it. Because of the pandemic, this is the first time in 30 years I haven’t seen any fall TV pilots – there isn’t the normal pre-season industry analysis of new shows. This makes effective on-air promotion (still the best way to create awareness) more important than ever, particularly for ad-supported networks, which need viewers to start watching a new series more quickly than a subscription streaming service does.

Regular readers of The Sternberg Report know that one of my pet peeves (polite term) and frequent rants is the stubborn refusal of the broadcast networks to promote one another’s programming. The television landscape of the 1980s and 1990s saw the broadcast networks fiercely battle for every rating point, with ad-supported cable being their only real competition. ABC, CBS, NBC, and FOX were the only places to watch original scripted primetime series, and most TV programs were watched live as they aired. In today’s much more splintered media world, the broadcast networks should see themselves as allies against everything else (even though all broadcast nets are part of conglomerates that also own streaming services).

Ad-supported cable networks learned long ago that promoting one another’s programming is the most effective way to boost all of their ratings and attract more advertising dollars. There are several ad-supported cable series over the years that I’ve watched regularly only because I saw them promoted on another network. The broadcast networks still steadfastly refuse to do this, thereby not advertising to the largest chunk of available consumers of their product, who are most receptive to their message. They should understand that whenever they develop a This is Us, The Good Doctor, Young Sheldon, or The Masked Singer, it benefits all of them, reminding both the ad industry and the press that the broadcast networks are still capable of producing the highest rated shows on the air (The Walking Dead and Yellowstone notwithstanding). The advertising industry, which benefits from strong ad-supported programming, should be encouraging this type of cross promotion at every turn.

I was again reminded of this lunacy while I was watching this year’s Primetime Emmy Awards on ABC. They, of course, had several promos for the host network’s programming (eight by my count). There were also numerous ads for its competitors. It had five ads for ad-supported cable networks (CNN, Nat Geo, TBS, and FX), two ads for premium cable (Showtime), and 16 ads for various streaming services (4 for its own Disney+, 2 for Apple TV+, 2 for Amazon Prime Video, 1 for Hulu, 2 for FX on Hulu, 3 for HBO Max, and 2 for Peacock – for some reason the network had previously banned ads for Netflix). Conspicuously missing from this list was CBS All Access, which I suspect is simply because it has CBS in its name. Once it officially changes its name to Paramount+, all the broadcast networks will probably happily accept ads for programs it won’t touch today. There were, of course, no ads for CBS, NBC, FOX, or CW. And the broadcast networks wonder why their competitors continue to siphon off their viewers, and why their own combined ratings continue to decline.

Given the pandemic delayed season, irregular start dates for both returning and new shows, and virtually no pre-season buzz for new series, cross promotion is more important than ever. Not to do so is nothing short of promotional malpractice – and one reason initial ratings for returning series are down sharply from last year. Just as an example, I follow television for a living, and was not aware of the season premiere date for ABC’s The Good Doctor. I watched it a few days later on Hulu. Had the premiere been promoted during primetime on other broadcast networks or Sunday football on CBS, FOX, or NBC, I would have known when it was returning. The same is true for any number of season debuts for new and returning shows.

Do Ratings Matter? Well, of course they do. But only to the degree that they affect overall network rankings. This has to do with an antiquated upfront buying system, where price increases have less to do with whether ratings are up or down, and more to do with the network standings. I’ve said this before, but if you give broadcast network executives a choice between having their ratings increase by 10% and being in third place or having their ratings decline by 10% and moving into first place (because other networks declined more), every one of them would choose the latter. This, of course, is a recipe for declining ratings. On the ad-supported cable front, being in the top 10 matters more than anything. I was head of research at a cable network, and I remember one year our ratings were up from the previous season, but we had slipped from 9^th place to 11^th place among adults 25-54. It was not a happy time. The following year, when we were back in the top 10, there was again joy in Mudville. This, despite the fact that only about three-tenths of a rating point separated 3^rd and 30^th place among ad-supported cable networks. Actual rating size was irrelevant, network rankings meant everything.

This is one reason NBC decided to air its Donald Trump town hall at the same time ABC had previously scheduled its Joe Biden town hall. They expected to beat ABC significantly (which didn’t happen). That was more important to them than getting higher ratings on a different night. This is also one of the main reasons the broadcast networks stubbornly refuse to cross-promote one another’s programming. Doing anything to help another network is seen as unimaginable. Foolish short-term thinking that has resulted in long-term audience declines.

COVID-19 Storylines: Several TV series are incorporating COVID-19 into their plots. I was watching the season premiere of The Good Doctor, and was struck by how well they illustrated the way doctors and hospitals were dealing with the new coronavirus at the outset of the pandemic. The season premiere of NCIS New Orleans also handled it well. These storylines being integrated into popular TV shows might actually get some people to take the virus and mask wearing more seriously than politicians or real-life doctors ever could.

Police Shows Get Re-Invented: Following George Floyd’s death, and the subsequent nationwide protests against racism and police brutality, broadcast network cop shows, which typically portray the police as heroes and police brutality as a justified means of getting the bad guys to confess, have been forced to undergo much-needed changes.

Chicago P.D. has been probably the biggest example of abusing suspects to get them to reveal crimes (in virtually every episode). And, of course, virtually every suspect they rough up is actually guilty, so the show presents it as a necessary evil. These “hero” cops are willing to do whatever it takes to protect the public, even if it means repeatedly crossing the line. In this season’s premiere episode, a new supervisor (a Black woman) is brought in and tells Hank Voight, the head of the intelligence unit (played by Jason Beghe) that she’s on his side, and knows he’s a good cop, but if he doesn’t change his methods he will be gone within a few months. And when he is about to take a suspect downstairs to “the cage,” where he can rough him up to get info without anyone else seeing it or any cameras recording it, one of his Black detectives tells him “we can’t do this anymore.” While Voight yells at him and tells him to quit if he doesn’t like it, he ends up listening to him. It seems like most police/detective/FBI shows are undergoing changes and hiring consultants to help re-invent the genre and cover topics such as police brutality, systemic racism, and related issues more realistically.

Netflix Goes Linear (in France): As streaming competitors enjoy substantial subscriber growth during the pandemic, Netflix is looking for new ways to keep its subscriber base engaged, appeal to new viewers, and maintain its leadership position.

One of the main things that give streaming services an edge over linear broadcast or cable networks (aside from no advertiser-driven content restrictions) is that new programs don’t have to fit into a set schedule geared to a specific audience, or adhere to an artificial fall or mid-season. Nor do they need to concern themselves with average ratings (reach is the more significant metric). A series can have anywhere from 6-13 episodes per season (as opposed to 17-22 episodes for most broadcast shows), and new seasons need not debut during the same month each year. And while a network such as CBS might have trouble scheduling a show appealing to young viewers in the middle of its older skewing lineup, Netflix series appealing to substantially different audiences, such as Ozark, Stranger Things, The Crown, GLOW, Daredevil, Grace & Frankie, Jessica Jones, Sex Education, The Umbrella Academy, The Queen’s Gambit, and The Kominsky Method can thrive side-by-side.

While continuing to have the most user-friendly interface, so many series become available every month that trying to find something new to watch often takes longer than actually watching the show. And while Netflix’s model has worked quite well, experimenting with new options is smart.

Netflix France has announced a new web-based feature that provides subscribers with a 24-hour grid that is the same for everyone, with programming refreshed every few days. Presumably this virtual channel would consist of whatever series are most popular in France, along with some new series and movies Netflix wants subscribers to sample. This service is reportedly rolling out in early December. This is a brilliantly obvious move, and if it works in France, there’s a good chance it will eventually be tried in the U.S. Since Netflix already reaches roughly two-thirds of TV homes here, retaining subscribers is now perhaps more important than attracting new ones. Although Netflix has been steadfast in its insistence that advertising will never be a part of its business model, this might also provide some opportunity to at least experiment in that area.

Posted at 01:56 PM in Binge Viewing, Commercial Measurement, Research, Streaming, Television, TV Programming, Upfront | Permalink | Comments (0)

Advertisers Don't Need the Upfront Anymore

Even before the COVID-19 pandemic tossed any idea of a normal fall TV season to the backburner, the value of the upfront marketplace, where upward of $20 billion in annual national TV advertising is placed over a few frenzied weeks in June, was being questioned.

Under normal circumstances, we would now be in the middle of pilot season, when the broadcast networks prepare their mid-May upfront presentations to the advertising industry. These have traditionally been big, expensive events, at venues such as Radio City, Lincoln Center, and Carnegie Hall, where the broadcast networks unveil their new programming for the following fall, talk about how powerful a marketing brand they are, discuss their strategy for the next broadcast year, and trot out a number of stars from their various shows.

Cable networks have generally had smaller presentations, which took place before the bigger and glitzier broadcast network affairs. That was starting to change, however, as these large conglomerates are realizing it makes sense to combine their broadcast and cable properties into a single event. For the past few years, NBCUniversal has included NBC, Bravo, E!, MSNBC, Oxygen, USA, and Telemundo in its annual presentation at Radio City, which traditionally leads off the broadcast upfront week. Disney hosted its first combined upfront presentation last year, with ABC, Freeform, and ESPN (which previously had its own upfront event), being joined by FX and National Geographic, which Disney acquired in its $71.3 billion acquisition of Fox assets. CBS has long held its event at Carnegie Hall. Last year was Fox’s first presentation as an independent broadcast network. Turner (TBS, TNT, Tru, CNN, Adult Swim, Cartoon Network, HLN, Boomerang, and Turner Sports), which always tried to play with the big boys, with its presentation mixed in with the broadcast networks, is now even bigger as part of WarnerMedia. Discovery (now merged with Scripps), A&E Networks, and MTV have often had bigger events (although before the broadcast upfront week). And now all of the broadcast networks’ parent companies (except FOX) have their own streaming services.

Of course, the very idea of a fall TV season in today’s video world seems old fashioned. The broadcast networks might still adhere to fall and mid-season schedules for debuting new shows, but their competitors do not. In a television landscape of 10-episode cable series, and streaming services where you can binge-watch entire seasons, viewers don’t necessarily think in terms of TV seasons anymore. Nevertheless, the broadcast networks still hold onto a schedule that starts in the fall. In light of the current pandemic, this might finally start to change.

Ad-supported cable networks premiere many new series when the broadcast nets are airing repeats and some limited-run series (mostly non-sweeps months and the summer). Premium cable networks, such as HBO, Showtime, and Starz, air new shows throughout the year. Streaming services, such as Netflix, Hulu, and Amazon Prime, release full seasons of new series whenever they happen to be ready. CBS All Access does as well, although it releases new episodes on a weekly schedule, rather than all at once. Disney+ and Apple TV+ recently added to the mix, and are about to be joined by Peacock and HBO Max.

Because of all the new competitors emerging over the past few seasons, developing and sustaining successful scripted broadcast series (without NCIS or Chicago in the title) is more difficult than ever. Unless a show clicks right off the bat these days, it’s hard to build it into a hit. We are not likely to ever see another Cheers, which began as the lowest rated show of the week and ended its 11-year run in the top 10. Or Seinfeld, a little-watched, mid-season sitcom that took three seasons to find an audience. Or even The Big Bang Theory, which finished its first season in 68^th place and last year completed its 12^th and final season as the longest running multi-camera comedy in television history.

It will be interesting to see what the networks do if there is no original new product to air come fall. It would make sense to air content from their own streaming services. CBS could certainly air CBS All Access’s The Good Fight, The Twilight Zone, Star Trek: Discovery, and Star Trek: Picard on its linear network. It would serve to provide free content and also to promote its streaming service. ABC could do the same with The Mandalorian from Disney+ or any number of Hulu series – they might need to renegotiate some profit-sharing elements, but that would be more than offset by not having to pay additional production costs. A broadcast network could also cut a deal with Netflix, Amazon Prime Video, or even Apple TV+ to air a season or two of one of their shows (which would also serve as good promotion for the streamer). The first couple of seasons of Bosch, for example, would fit in well with either the CBS or NBC procedural drama audience. The show has six 10-episode seasons on Prime Video, and this could be great cross-promotion. The broadcast networks accept advertising for streaming services, so the argument against promoting a competitor doesn’t fly.

Is the traditional pilot season in danger? Spending tons of money on new programming remains a risky proposition – only about 20% of all the new series that debuted during the past five years were still on the air this season. Producing pilots for shows that never make it to air is also quite costly. Will this pandemic-delayed season be the impetus to end the antiquated upfront system and do away with pilots altogether?

Here are some reasons why advertisers used to benefit from the upfront buying season but no longer do, and why the broadcast networks (mostly) still like the process:

Advertisers no longer need the upfront. There was a time, in the era of “Must See TV,” when certain shows and network nights were so far above the rest of the pack both in ratings and critical acclaim (NBC Thursday, ABC Tuesday, CBS Monday), that media agencies would scramble to ensure their advertisers got the limited inventory in those shows. The bigger advertisers and agencies would invariably move the upfront marketplace to ensure they got first dibs.

Today, there aren’t really any broadcast series so head and shoulders above the rest that advertisers feel they need to be in them. There are no Friends’, M*A*S*H’s, or Roseanne’s on the air anymore. Young Sheldon might be popular, but it’s not The Big Bang Theory. Grey’s Anatomy and The Good Doctor get solid ratings, but they are not E.R.

Broadcast networks like the upfront. Even though there is no question that linear TV is losing ground to other screens and streaming services, people of all ages (yes, even Millennials) still spend significantly more time with traditional television on an in-home TV set than with any other video source. Both the consumer and trade press cover these events, and it enables the networks to push back against the regular press narrative shouting about the demise of linear TV. Of course, as the upfronts have transitioned to mega-conglomerate events, this message about broadcast network strength has been diluted. It is no longer the broadcast branding event it once was.

The upfront still benefits broadcast networks but not advertisers. Only an upfront system enables networks to continually raise prices for declining ratings. By having a broadcast upfront followed by a cable upfront, the broadcast networks have traditionally created an artificial demand for what is essentially an unlimited supply of commercial rating points. Then, based off the increases the broadcast networks achieve, it sets the increases the cable networks can get (despite their own declining ratings).

Thirty years ago, the average broadcast network rating was more than 10 times the average of the top 10 cable networks. Twenty years ago, it was 6 or 7 times larger. Today it’s only 3 or 4 times larger. The rating and reach advantage broadcast once had over cable is not nearly what it used to be.

The upfront actually contributes to declining ratings. The upfront causes rankings to be more important than rating size. In other words, if you gave network executives a choice between having their ratings increase by 10% but falling from first to third place in the standings, or declining by 10% but moving from third to first place, they would all take the latter. This results in hurting the other guy being more important than improving your own ratings. At a time when the broadcast networks should see themselves as allies, they stubbornly hold onto the antiquated notion that they are their only competitors.

The same is true for cable networks. Despite the fact that only a few tenths of a rating point separate 30 or so networks, being in the top 10 is still ridiculously more important than getting higher ratings.

Audience guarantees, still make the process seem worthwhile for advertisers. But as ratings continue to decline, both average network performance and individual program ratings become easier to predict. It is far more likely that you will under-estimate a show’s performance than over-estimate it. Guarantees only have value if a significant number of series perform below expectations. This type of safety net is no longer necessary. I’d rather buy commercial time on a quarter-to-quarter scatter basis than upfront – it would provide a greater degree budget flexibility and more certainty as to whether the programming I buy will actually air as scheduled.

The upfronts allow the networks’ corporate owners to provide Wall Street with the confidence that they are financially healthy. It’s like a futures market. It also gives the networks a more structured control over their inventory, and removes a level of uncertainty that would exist if they didn’t sell 70-80% of their commercial load at one time.

Upfront presentations and events will continue to evolve, and may not happen at all this year, but they are not likely to completely disappear anytime soon. As long as the networks believe the process benefits them they will resist change. And it’s much easier for the few sellers to get on the same page than the many buyers. But if the question is whether or not advertisers need the upfront anymore, the answer is no.

Posted at 01:23 PM in Television, TV Programming, Upfront | Permalink | Comments (0)

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