Much as the digerati love to squawk about cord-cutting and the impact subscriber churn is having on basic cable ratings, the hard data doesn’t back up some of the more apocalyptic Chicken Little scenarios. But if the sky isn’t exactly falling, it is drooping noticeably.
Per Nielsen ratings data, cable deliveries are on a decade-long upward trajectory, and while growth has slowed in recent years, it has not seized up altogether. As it stands now, just a week before the second quarter of 2012 comes to a close, cable is on track to command 70 percent of TV’s total adults 18-49 GRPs in prime time.
That marks a tiny uptick from Q2 2011, when the cable networks accounted for 68 percent of all prime-time viewing, but it’s a significant leap from five years ago, when share hovered at around 61 percent.
In a show of obverse symmetry, broadcast continues its downward course. Ten years ago, the Big Four laid claim to 46 percent of all nightly GRPs; this year broadcast’s Q2 share is projected to fall to 30 percent.
A look under the hood at the individual broadcast networks presents a haves and have-nots landscape. In Q2 2002, NBC was TV’s top banana, averaging a 4.4 rating in the coveted 18-49 demo. Since then, NBC has plummeted 57 percent in the demo, closing out the quarter with an average nightly rating of 1.9.
CBS dropped from a 3.1 in Q2 2002 to a 2.1 (a difference of 32 percent), while Fox’s deterioration has been more gradual—3.0 to a 2.5, a drop of 17 percent. ABC over the course of the last 11 years has declined 19 percent, from a 2.7 to a 2.2 rating.
Full-season trends are largely analogous, as cable closed out the 2011-12 campaign with 65 percent of the prime-time GRPs, while broadcast commanded 35 percent. Cable first overtook the Big Four during the 2003-04 season, when it drew 51 percent of the demo to the networks’ combined 49 percent share.
None of which is to say that cord-cutting isn’t on the rise. According to GfK Media, some 6.9 million U.S. households bailed on subscription TV in 2011, bringing the number of homes served exclusively by over-the-air TV to around 20.7 million—18 percent of the 114.1 million TV households universe.
That’s a huge shift, but one that does not jibe with Nielsen’s data. In February, the company said broadcast-only households represented 9.6 percent of the TV universe, or 10.9 million homes. Of these, a little more than half (5.8 million) were broadcast-only/non-broadband households.
Again, as demonstrated by the Q2 ratings numbers, the proliferation of free-TV viewership has yet to have an impact on cable deliveries. Nor has it had the expected effect on TV usage in general. According to Nielsen, the average consumer watched 151.3 quarterly hours of TV in 2011, up a tick from 150.4 the year before.
Of course, this is the bottom of the first inning, and it’s counterintuitive to believe that Americans (especially the younger variety) will continue to lap up vanilla TV content. Time-shifting, mobile/tablet streaming and online video now account for nearly one-quarter of total monthly video consumption. And last year, for the first time in two decades, the number of homes in the U.S. with TV sets dropped. Cord-cutting? This heralds the rise of a demographic that may never pay for a cable subscription—or so much as own a TV set—in the first place.
In the meantime, it’s business as usual. Upfront sales may be flat to slightly up versus a year ago, but the ad dollars keep pouring into broadcast and cable. According to PricewaterhouseCoopers, broadcast nets in 2012 will generate $18.9 billion in ad sales, a boost of 7.3 percent versus a year ago, while national cable nets are on course to rake in $25.7 billion in ad sales, an improvement of 8.4 percent.
In what may be a nod to the rise of the TV-free crowd, some cable networks are already reporting that a significant chunk of their year-over-year volume increases in this year's upfront are a function of greater demand for converged media. The revolution will be televised, but it also will be available for streaming on your iPad or on Netflix.