Primetime Ratings Will Increase Thanks to the Strike

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I'm going out on a limb to forecast that broadcast network ratings might actually increase in the next three months compared to last year's averages. There are early indicators ratings will increase, although they have been down and projections suggest 5 to 8 percent first and second quarter declines.

The Writers Guild of America strike against an alliance of production studios and networks is proving to be a catalyst for significant change in the television industry. And that, in turn is about to stir the pot at the largest global ad agencies and at their clients. Ironically, network television could actually become stronger as a result of the strike. media Leadership Opinion Vision Evolution

Before I continue, let me acknowledge I have been biased toward the writers in my commentaries. I believe I have accurately and fairly presented a realistic perspective, presenting equally the positions of both sides. I projected before the strike started it would be settled either in mid-January or it would continue into March. If not settled by late March, it's difficult to anticipate when it would be settled… if ever. The writers, directors and actors deserve to share in the spoils as the industry begins to reap a digital windfall. The economics of defining this are, however, dependent on acceptance of an adjusted gross formula and acknowledgement that not all writing is equal. As the three disparate universes of entertainment, media and advertising quickly converge, new business models are being discovered. Union members, networks, studios, agencies and advertisers all have the opportunity to be creative about those new formulas.

When Disney chief Robert Iger in September 2006 announced a deal with Apple to distribute ABC Network's most popular content on iTunes, few predicted the avalanche of deals he would precipitate. Today the landscape of network programming content has been dramatically altered. Almost every broadcast network program of note is available across a wide spectrum of platforms and channels. Even those who have steadfastly avoided adding a DVR to their cable or satellite box are now watching network TV on PCs, DVDs, iPods, cell phones, and on airplanes. They are capturing them on memory sticks to play on any device anytime, anywhere. But you know that already.

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For TV fans, the next few months without our favorite shows will be painful. Inevitably many shows that would have survived a few more seasons will be cancelled. But they will not be cancelled because of low ratings or high costs; they will be cancelled because they don't have a tail. The new programs the networks are bringing in to fill the gaps -- reality and variety series -- are easily accessible across multiple platforms, play well on both the large HD and small screen, lend themselves to short clips and have a large base of followers who watch them digitally.

As CBS' David Poltrack and NBC's Alan Wurtzel have observed, alternative distribution appears to drive larger audiences back to the original broadcast airings. Especially for reality programming, when there is active participation on discussion boards and immediacy of results, audiences who watch online come back home to the networks. Distribution across multiple outlets drives greater reach. The rising tide raises all ships, especially the mother ship.

Even if the strike is settled, the die is cast. Network television will focus its programming investment dollars on series that generate the greatest reach opportunities across multiple platforms and succeed in building ratings for the originals. This creates a two tiered pricing system that even further increases the cost-per-thousand value of network television. The wave of strike resistant programming is accelerating the viewer shift to digital and advertisers' shift to digital. But it is also simultaneously increasing the value of network television.

Without the strike, the changes we are seeing right now might have been another two to three years away. Because the networks had already set in motion their embrace of digital, spurred on by Iger's success, they were more prepared for the strike than even they anticipated. As the economics of the industry change before our eyes, it lends even more power to the writers' claims while the harsh stance of the studios and networks is equally being rewarded.

There must be a solution somewhere in these new economics. Someone has to blink.

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