TV Trends: TV Networks’ Reach Metrics - October 2016 -- Pivotal Research Group

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Cover image for  article: TV Trends: TV Networks’ Reach Metrics - October 2016 -- Pivotal Research Group

In efforts to study a given television network or network group, ratings tend to capture the bulk of focus in the press and among investors. However, audience reach can be an equally important barometer of health. In this note we review reach data for major English-language national TV networks during the month of October 2016 among households, people 2-99, people 2-17 and people 18-34.

While the presence of highly rated programs often lead advertisers to choose to buy inventory from one network over another, large advertisers typically optimize their television budgets across networks for reach and frequency. Consequently, when an advertiser negotiates to buy a package of gross ratings points from a given network, a package of ad inventory with wider reach generally offers superior value vs. a network with narrow reach for an identical number of GRPs. This is because there should be less unintended duplication in the former package relative to the latter. Meanwhile, MVPDs need to concern themselves with the same metric to know how many different consumers watch a given channel or group of channels. Wide reach will usually be positive for a network, at least if it indicates a significant number of consumers might shift MVPDs if that network was unavailable on an incumbent’s service.

Narrow reach can be harder to interpret. For advertisers, narrow reach is usually negative by itself, but neutral in context of a campaign involving many networks. For MVPDs, narrow reach can be negative if it means few consumers are watching, although both distributors and networks know that programming covering a wide range of tastes can ultimately make a distributor’s overall offering stickier within individual households. A small number of households may also turn out to be intensive viewers of a network, making that network disproportionately valuable in a bundle.

During October 2016, the big four broadcast networks once again dominated the industry’s reach metrics with 85-88% of households watching each network for at least one minute during the month. On a people 2-99 basis, the figure for these networks ranges from 72-75%. Among 18-34s, the same networks dominate with a range of 58-63%. Reach of these networks fell only slightly year-over-year (October 2016 vs. October 2015) among people 2-99 for the leading broadcast networks, and rose significantly – by between 2-4% – for 18-34s. The CW, TBS, ESPN, FX and AMC were among the next-broadest reaching networks for each of households, people 2-99 and 18-34s. TNT was among the top ten for households and people 2-99, while Comedy Central was among the top ten for 18-34s. The median change in reach on a year-over-year basis among networks we looked at was essentially flat among all people and adults 18-34, but fell by -1.5% among households. Most networks continue to have relatively low reach, as only the big four broadcast networks maintain greater than 50% reach among both people 2-99 and 18-34. The fall-off beyond the top handful of networks is relatively steep, as the #10-ranked network for adults 18-34 has only 29% reach, while #10 for people 2-99 has only 34% reach. Among households, #10 had 45% reach. Median reach for a network for networks assessed here among households is 26%, while median reach among people 2-99 is 17%.

During October, the most significant year-over-year improvements in reach against 18-34s came from Fox News, the Fox broadcast network, CBS, NBC and Time Warner’s CNN. The expanded reach for Fox News and CNN is unsurprising given the election, but the expansion in reach among broadcast networks suggests some degree of success in airing programming that appeals to younger viewers. It may also be that audiences prone to cord-cutting and cord-shaving re-concentrate their viewing on broadcast networks, benefitting those networks by default. Reach fell most significantly among younger audiences at AMC’s BBC America, NBCU’s CNBC, Viacom’s Spike, NBCU’s Esquire and Time Warner’s TBS.

Among households, reach improved most at Fox News, Fox Business, Viacom’s Logo, Fox’s National Geographic and Viacom’s MTV. Among households, reach fell by the most at NBCU’s CNBC, Viacom’s TV Land, Spike, TBS and NBCU’s E! We note that Spike and TV Land were likely impacted by tier-ing of these networks at Comcast earlier in 2016. Among all people 2-99, reach improved most at Fox News, Fox, NBCU’s MSNBC, NBC and National Geographic. It fell by the most at CNBC, TBS, TV Land, Discovery Family Channel and Esquire.

A data-set for reach and year-over-year change in reach for major networks follows in this note.

FULL REPORT INCLUDING RISKS AND DISCLOSURES CAN BE FOUND HERE: TV Update 10-28-16.pdf

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