Ben Silverman's Comments on Margins vs. Ratings Signal the End of Broadcast Television - TheShellyPalmerReport

In case you haven39t noticed the business of broadcast television is in trouble Ratings have been trending down year over year for more than 30 years and there39s no end in sight Most pundits blame this audience fragmentation on outside forces like the proliferation of cable channels DVDs video gaming DVR39s and most recently online video personal video and wireless offerings People who should know better constantly parrot misinterpreted data about the deleterious effect of TiVo the noun describing the entire genus of DVR39s on commercial advertising and how the 30 second spot is dead Others like to call the medium a vapid wasteland of unwatchable programs All of the professional explanations for the decline of broadcast television ratings seem to agree that the problem comes from outside forces and an unavoidable changing landscape I disagreeYes the business is not what it once was and yes there is a bit of empirical data to support the idea that enhanced consumer control over media consumption has had a significant impact on viewing habits since the introduction of the quotincluded with purchasequot electronic remote control in the mid8039s But none of this has had even a slight impact when compared to the business culture and business rules that have evolved over the same 30 year time period According to the New York Post Ben Silverman cohead of programming for the NBC Television Network said the following quotWe39re managing for margin and not for ratingsquot There is nothing technology can do to help or hurt this strategy It is truly the end of broadcast television If you want to see TV ratings improve the business improve and the ROI improve try investing in programming not margins It will be a refreshing twist for the 21st Century And it is really the only thing that will turn the business around The recipe for profitable broadcast television is pretty simple Develop large audiences that you can accurately measure and sell them to advertisers who need to reach them The shows that do this even have a name quotHitsquot If on the otherhand you want to sunset an organization and squeeze every last dime out of it before it gives up the ghost manage for margins By the way Ben Silverman is a personal friend of mine and I both respect and admire him His success is laudable and he is a great guy In fact what I love about Ben is that he actually had the guts to come out and say something that no one else in his position would ever have the guts to say This is not an NBC problem it39s an industry problem Ben just held up the mirror The title of the Post39s article was quotSilverman Channeling Jack Welchquot Not only is this is not a compliment for a television programming executive it portends a dismal and disturbing futureWinston Churchill once said quotThe farther you look back the further you can see into the futurequot So let39s look back a few years to the quotgolden agequot of radio Back then disc jockeys ruled They became the stations39 program directors because they had their fingers on the pulse of the audience As the business evolved very successful program directors were promoted to station management It was easy to spot a station with a GM who came from programming Talent was treated with respect content was king and audiences came firstAs the business of radio matured professional business people started to look closely at the cash cow and you could see the focus of management turn to sales Radio became extremely competitive from a commercial point of view it was always creatively competitive The new superstars of the business were the sales guys and you saw a shift in senior management to salesoriented executives It was easy to spot a radio station that was run by a former GSM it was all about sales and promotion These execs knew where the money came from and managed the stations differently than their programming predecessors But the industry kept growing because sales and programming had always been in a surrealistic paso doble that when properly managed produced excellent financial resultsUltimately salesoriented station management caught the attention of pure money people from the outside world If a well programmed station was a cash cow a fully sold out well run station was a cash machine and pure money people like that kind of ROIWhat happened next was inevitable but unfortunate Management evolved once again This time accountants bankers lawyers and professional PampampL managers from outside the radio business took over They looked for efficiencies consolidated divisions rolled up station groups and turned the entire enterprise into a mass of MampampA deals The term quotexit strategyquot was the new goal and everything else was secondaryBen Franklin who among other things is the great great grandfather of mass media in America once said quotThose who are unwilling to study history are doomed to repeat its mistakesquot If you look at the radio business today it is hard to find a station that has made any meaningful investment in programming in the recent memory of man or beast The business is about consolidated sticks precanned preformatted programming sales of aggregated de minimis audiences and margin The industry is not about growth it39s about holding on to what39s leftThe television industry has always followed the fortunes of the radio business A quick rule of thumb is that changes in the video business are usually about 10 years behind similar changes in the audio business I think this armchair research and the associated aphorism is supported with enough historical evidence to be taken seriously quotThere39s nothing to watch on Saturday nightquot says the viewer quotThere39s no audience on Saturday night so there39s no reason to invest in it amp8230quot says the marginoriented television programming executive This is a vortex of logical rhetoric It is almost impossible to break free and stop the cycle What can be doneThe answer is very clear Super Bowl XLII February 3 2008 was the mostwatched sporting event on record and the second mostwatched TV program in history Nielsen says an average of 975 million viewers watched the GiantsPats contest The mostwatched program is still the MASH finale which drew 106 million viewers in 1983 The big game also broke a record for total viewership with 1483 million viewers persons age 2 watching all or part of the game The previous record stood at 1444 million for Super Bowl XXXVIII in 2004 What this tells us is that if you put on a compelling piece of content there actually is a television audience to watch itIs it unfair to use an annual emergent sporting event as an example Perhaps The job of television is to inform enlighten and entertain So I will simply point to the last episode of MASH as the appropriate benchmark You will immediately argue that every show is not MASH and that most entertainment shows will never find an audience of that size I agree Most shows will not ever attain that kind of rating But I can also assure you that MASH Friends Seinfeld etc were not programmed for margin They were programmed for ratings to the exclusion of every other benchmarkRemember people don39t have Internet rooms in their houses they don39t have video game rooms in their houses most don39t even have reading rooms amp8211 but most households in America do have TV rooms And in most of the 1128 million television households there is a TV in more than one room TV technology is everywhere it39s the programming that39s nowhereShelly Palmer is Managing Director of Advanced Media Ventures Group LLC and the author of Television Disrupted The Transition from Network to Networked TV 2006 Focal Press Shelly is also President of the National Academy of Television Arts ampamp Sciences NY the organization that bestows the coveted Emmyamp174 Awards He is the ViceChairman of the National Academy of Media Arts ampamp Sciences an organization dedicated to education and leadership in the areas of technology media and entertainment Palmer also oversees the Advanced Media Technology Emmyamp174 Awards which honors outstanding achievements in the science and technology of advanced media You can read Shellyamp8217s blog here Shelly can be reached at shellypalmernetCheck out the Shelly Palmer Report archive

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Ben Silverman's Comments on Margins vs. Ratings Signal the End of Broadcast Television - TheShellyPalmerReport

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