Which are the television shows that really matter? In an historical sense, the list might include I Love Lucy, which invented the sitcom; All in the Family, that landmark breaker of barriers; M*A*S*H, an antiwar influence in the waning days of Vietnam; consciousness-raising movies Roots and The Day After and Murphy Brown, which proved such a hot "potatoe" for Dan Quayle.
For the business side of television, the scorecard is vastly different. To broadcast networks and the advertisers who foot the bills, the shows that really matter are the ones atop that little list maintained by Nielsen Media Research. These shows are the locomotive that propels the network choo-choo. In the just-concluded season, only five shows topped an 8 rating in adults 18-49 (all ratings are based on this ad-friendly demo unless noted); only 16 rose above a 5 rating. Most buyers can tick them off with their eyes closed, but for those of you not so steeped in scheduling minutiae, they appear elsewhere in these pages. They are The Dozen Shows That Matter. (Since American Idol and Survivor are counted twice, consider this a baker's dozen.)
This is not to say that the shows ranked 60th or 90th are without value; some of them are even cool. But the dozen are what really ring that network cash register. And as broadcast ratings continue their long, slow descent into the primordial ooze—the four nets this season collectively dropped another half of a rating point, or 3 percent—these top shows seem more important than ever. Along with the Super Bowl, the Oscars and a blessed few others, they are the only big numbers still for sale—the vehicles that can drive awareness and deliver on the mass reach that is network TV's brand promise.
As the profusion of viewing options conspires to push ratings ever-downward, it sure feels like big shows are thinner on the ground—the heaviest hitters are pulling away from the bunch in the middle of the ratings pack. To what extent is this so? Simple economics dictate that scarcity could drive these top shows, already premium-priced, to more dizzying heights. The prospect of the rich getting richer, relatively speaking, could spell trouble for advertisers and their media agents.
As any TV salesperson knows, there are countless ways to slice the ratings salami. No surprise, then, that sorting out the relationship between the dozen and the pack is not so straightforward. Several measures suggest these top shows have not lengthened their lead, but one keen analysis demonstrates that they are, indeed, more important now than ever.
Consider the top five programs, the top 10 programs and a designated middle 10 (those ranked 51-60) in the adult demo this season, versus five and ten seasons ago, according to Nielsen data provided by Carat USA. The top 10 was 109 percent above the middle 10 this season, 119 percent above in 2000/01 and 71 percent above in 1996/97. So the top 10's advantage has grown over a decade, but not versus five years ago. Conversely, the top five versus that middle 10 showed a bigger spread a decade ago (+179 percent) than it does this year (+154 percent). No clear trend emerges here.
That does not surprise Barry Fischer, executive vp/market strategy at Turner Broadcasting. He splits network programs into thirds, admittedly a more blunt instrument. He reports that the top third lost 42 percent of its audience over a decade; the bottom third lost 45 percent. This season, the top third was 2.5 times higher than the bottom third; ten years ago, it was 2.8 times higher. "So the relationships haven't changed much for the four networks," says Fischer, who has long been on a mission to warn advertisers away from this dread lower-tercile.
The former network buyer anecdotally suggests that even network hits just don't matter as intensely as they used to. "Remember sitting at the upfronts wondering, 'How are they gonna ambush the other guy? How will they block that?'" Fischer asks nostalgically. "It was a blood sport, but they just don't have that mentality anymore." It seems like all the nets can muster is just one battle a year, he says, in this case the touted Thursday face-off between Grey's Anatomy and CSI this fall.
Geri Wang, ABC's senior vp of prime-time sales, uses another path to a similar ratings destination. ABC clocks how many shows are 5 ratings points higher in the demo than the four-network average. This year presented four such shows—two Idols, Desperate Housewives and Grey's (CSI was close enough under horseshoe rules). Last year there were also four ratings monsters, and that upper class has stayed in the four-to-six show range for nine of the last 13 years. "It really is rather consistent," says Wang.
By now, this appears to be an open-and-shut case, but a fresh perspective blows in from Sam Armando, Starcom Worldwide's newly minted senior vp/director of television research. He removes the top three regularly scheduled performers for each network and voilà! ABC's average rating drops by 22 percent, Fox's by 27 percent, CBS' by 11 percent and NBC's by 6 percent. This demonstrates how heavily Fox and ABC bank on their biggest guns. Meanwhile, CBS (with five of the top 15) is nicely balanced and NBC (0 for 15) is uniformly mediocre.
This dependence on a handful of smashes is rising. Looking back five and ten years ago, removal of its top three programs never cost any network more than 14 percent of its audience. Even at the '95/'96 apogee of Must-See Thursday, NBC lost just that amount after subtracting Seinfeld, Friends and E.R. The power of that extraordinary night elevated unworthy placeholders Caroline in the City, The Single Guy and Boston Common to the next three slots, while NBC scored four more in the top 20 to earn its robust average rating.
Perhaps this increasing reliance on a few supernovas explains why some experienced observers instinctively believe the rich are getting richer, ratings-wise. "It definitely feels that way," says Armando, "although there's a lot of bouncing around in any one year." For one thing, the upper-midrange seems to be fading away, he says. "Idol's at a 29 [household share], then there are a few big ones at 19 to 21 shares, then it drops to a lot of 10s and 11s. The range used to be pretty full, but now the gaps have widened between the haves and the wannabes."
These ratings giants carry a heavier load, suggests John Rash, senior vp, director of broadcast negotiations at Campbell Mithun. "Top-rated, immediately understood programs are more important than ever in a fragmented media landscape," he says. "For audiences and advertisers alike, networks are increasingly defined by one or two or three key shows."
This argues for a hairsplitting difference between the handful of shows that matter and others that are merely very successful and profitable. For Fox, this obviously includes Idol, House and 24; failed satellite Unan1mous need not apply, its 10th-place finish making it a latter-day Suddenly Susan. ABC boasts the trinity of Housewives, Grey's and Lost; buyers are unconvinced that Extreme Makeover: Home Edition belongs in such august company, even if sponsor Sears is a believer.
CBS has two CSIs and Survivor, but Without a Trace doesn't get the same kind of love. As for poor NBC, well, E.R. kinda sorta still matters—at least it's the closest thing the net's got. The Apprentice used to matter but that's ancient history, more than a year ago. Deal or No Deal just doesn't matter in this way, says a buyer, no matter how adequate its rating.
Okay, maybe it's not precisely a dozen. But there's still a financial point to be made here—the reason why this mattering matters. The top shows have always fetched a hefty CPM premium—they are "indexed" anywhere from 10 to 25 percent above the norm for pricing purposes, say buy-side sources. Even if evidence is mixed that the dozen are pulling ahead of the ratings pack, they may loom larger than ever psychologically. How do buyers and sellers see it, and has that affected the premiums paid for the biggest guns?
Buyers acknowledge the tremendous importance of the top shows, but hesitate to state definitively that premiums are expanding. "We're still trying to reach a lot of people in a short time in an impactful way, and these shows can do it big-time," says Andy Donchin, senior vp, director of national broadcast for Carat. "They are fewer and further between, and I do think psychologically they are of extra importance. I don't know if the price gap has increased. But when you get the season finale of that big-rated show, it is extremely attractive to us—maybe even more so than ever."
Steve Grubbs, CEO of PHD, cites the law of supply and demand. "The scarcer a commodity, the more its value increases," he notes, "and generally speaking, that makes these shows more valuable. When the average home gets 102 channels, there are only a handful of tent-pole shows out there—shows that can have a real impact in awareness. But are premiums greater than they used to be? I don't know about that."
Ed Gentner, Mediavest's senior vp, group director, is dubious that things have changed much. "The bar has been lowered overall," he says, "but I don't think you're looking at that many fewer hits versus the industry average." Nor has he noticed "a big difference in the [CPM] gap between those hit shows and the average shows. But that could change if all of a sudden there are fewer marquee shows going forward."
Viewing this debate from the cheaper seats of cable, Bruce Lefkowitz, FX Networks' president of ad sales, takes a contrary view. "I do believe [broadcast] premiums are going up," he says, "and they'll continue to go up in an era driven by DVRs and event-television. It's definitely psychological." (His next logical step, of course, is to wonder about the "cost/value relationship" for big broadcast hits and to ask whether "audiences can be garnered with lower-rated shows.") Lefkowitz is confident that premiums are higher despite buyer denials: "They'll never tell you because that's their report card," he says.
For the record, network sellers take pride in their hits but would never be so gauche as to flaunt their indexing in public. "We enjoy doing business with new clients in new categories as a result of our improved performance, and that's part of our pricing strategy," says Wang.
"Scarcity drives value in all areas of economic activity," says Jon Nesvig, president of sales for Fox Broadcasting. "Top-tier broadcast shows remain a marketer's best value in building reach quickly."
Dig a little deeper, though, and more complicated smoke signals emanate from sellers who ask not to be identified. "Premiums haven't changed in the upfront, which is driven by volume," says one network sales source. "You have a wide range of clients, from packaged goods to finance to movie companies, all of them have their price points, and we have to do business with everyone. But it could be true when you get to scatter, which has a narrower range of avails. There are much more dramatic [price] swings there, and you can put that huge premium on those five or six ratings monsters. And it may be true that premiums have grown in individual categories."
But there are limits to how high is up. A veteran buyer, for instance, says that Fox was not fully able to monetize its runaway Idol ratings this season. "They had so many GRPs to sell, especially when the show was on three times a week in February and demand wasn't so high," says this source. "It wasn't cheap, but you could get deals. The same thing happened to ABC with Millionaire a few years ago." This buyer firmly believes the biggest factor moderating premiums in recent years has been the overall languor of the network marketplace.
Another theory on why prices haven't run away for the few surviving prime-time hits comes from Steve Sternberg, executive vp and director of audience analysis at Magna Global. "It used to be that the highest rated shows were bunched on one network," he says, referring to the halcyon Must-See Thursday. "Now they're more evenly distributed. It's very different when most of the shows that matter are all on one net."
Ultimately, size isn't everything, say those on both sides of the table. Big ratings "have that 'wow' factor," says Wang, "but any time you get a secondary target—a huge 18-34 VPH, male comp, upscale—you generate higher demand." Others note that shows that do better on the Coasts can fetch a prettier penny than those that wow 'em in Dubuque. And don't discount buyer support—the shows the media community actually watches—to give a relatively low-rated show like Alias a relatively high premium. One buyer adds that even low-rated but prestigious cable offerings like CNN and USA's U.S. Open tennis coverage can rake in eye-popping premiums because "they're easy to explain to the CEO."
Size doesn't matter any more or less than it ever did, suggests Starcom's Armando. "Some clients want the biggest audience and most buzz," he says, "but ultimately it's about how well the concentration of a show matches your target. If I have a male target, the huge rating of [chick magnet] Grey's Anatomy doesn't do me any good. You want to stay targeted on strategy, not on the size of the rating."