Does “Winning” Matter In Television News?

By Alex Weprin 

An interesting discussion has been brewing in the blogosphere following a post on TVByTheNumbers. Bill Gorman And Robert Seidman, the site’s two primary contributors, wrote a pair of posts looking at how NBC spun ratings for “The Tonight Show with Jay Leno” before asking the question, does “winning” the ratings war really matter?

In a nutshell, Bill believes that what networks care about is generating higher ratings, regardless of whether they are “winning” the timeslot. A network would rather finish 2nd with a 1.1 rating than 1st with a 1.0. Robert disagrees, arguing that there is tangible value in “winning” a time period beyond the pure ad sales benefit.

Spud at Inside Cable News weighed in on his blog, siding mostly with Bill: “You can have low ratings but if your brand caters to a high income demographic with lucrative advertisers, being first isn’t the imperative one might think, at least in the short to medium range term.”


Steve Krakauer at Mediaite mostly agrees, but notes that networks, when they do win, shout it from the rooftops, so clearly it matters to people there.

In the cable television world, there are two customers a network has to cater to: advertisers and affiliates, and both are looking for slightly different things from the ratings…

Advertisers typically want to reach particular demographics, in news the core demo is people 25-54 years old, but more targeted viewers can deliver for certain channels. A network like CNBC can thrive even with only a tiny fraction of the audience of its larger cable news brethren. In fact it is the second most lucrative cable network NBC Universal owns behind only USA, the top-rated channel on cable. It succeeds precisely because of what Spud says: its ratings may be small, but it is able to charge a ridiculously high CPM that no general news channel (MSNBC, CNN, FNC) can touch thanks to its influential and wealthy audience.

As Krakauer notes, if you are “winning” it means you have higher ratings than your competitors, so you always want to be winning rather than losing. However, a network can succeed financially even if it is in last place in the ratings (See “This is Where CNN Makes its Money“).

The reason that cable networks can thrive even when their ratings are not delivering is because of subscription fees, which account for about half of their revenue. Those fees are paid by cable television customers, through their cable, satellite or telco provider.

So what do affiliates look for when their deals come up for renegotiation? It is a messy, complicated amalgam of factors, including ratings, overall reach, and the perceived “value” of the channel’s brand.

Still, ratings are a factor in those negotiations, and “winning” is another argument one can bring to the negotiating table.

In broadcast television news, “winning” carries more weight. Without the benefit of sub fees, strong advertising sales are pivotal. If “ABC World News” was drawing 2.1 million demo viewers, and “NBC Nightly News” was drawing 2.0 million, NBC may not be losing much in terms of revenue, but it loses quite a bit in terms of brand equity if it stays in second place.

Winning, paradoxically, also carries weight with potential viewers. This is why commercials for movies often tout the fact that it was “#1 at the box office” and why my cousins who do not work in the media love to talk about how their favorite programs are doing in the ratings.