Here we are, about mid-way through November sweeps, the time when networks put their best stuff on air so they can win the ratings race and attract the highest audience shares…and ad revenues. This feat has become increasingly difficult as consumers’ viewing habits and preferences continue to evolve. Gone are the days of mass viewing, when the top programs achieved 20-25 ratings. Now, the average rating for a top ten program is just 11.9. It’s not all bad news, though. Nielsen just reported that TV viewers broke a record in terms of consumption for the 2008-2009 season, watching 4 hours and 49 minutes per day when factoring in live viewing plus seven days of DVR playback. That’s up 1.4% from the previous season and 20% from a decade ago!
The challenge facing networks and advertisers alike becomes this – individual program ratings are down while overall consumption is increasing. How can this be? There are four primary factors driving these trends.
1. There are more television sets and more channels available.
The number of TV households increased from 99.4 million in 1999 to 114.5 million in 2009 (or 98.9% of total U.S. households). Some 94 million of these households own more than one television. Add the fact that the average TV household receives 130 channels, and consumers have more choices than ever!
2. Viewership improvements are occurring in non-primetime dayparts while primetime viewership has remained relatively constant.
Adults, especially those under the age of 35, are utilizing alternative platforms to access their favorite programs, including DVRs, Video on Demand (VOD), websites and mobile devices. The growth in DVR penetration, particularly, is staggering. In 2001, there were 935,000 DVR households. Today, there are 34.4 million, a number predicted to exceed 51 million by 2014! While “must-see TV” might have been on Thursday nights in the past, it can now include Oprah and Ellen hours after their original airings, at any time and on any day.
3. DVRs have increased overall TV usage when considering playback.
While the majority of TV viewing in DVR households occurs live, DVRs are adding to overall viewing levels. For the 2008-2009 season, Nielsen reported that aggregate primetime broadcast networks added about 10% more adult 18-49 viewers the same day and 20% more when factoring in live plus seven days of playback. For aggregate cable, the additional audience was 3% and 6%, respectively. The current season is experiencing increases over live viewing in the 7-12% range for broadcast networks, with some shows increasing more than 20% once DVR ratings are added.
4. Programming choices are abundant, and viewers are a fickle bunch.
Ten years ago, sitcoms, dramas and action series dominated programming options. Now, reality is king of the countless genres available. This shift was fueled by the bottom line. Production costs are nearly one-third less for reality shows than scripted series. Combined with the high ratings that resulted, networks found a way to make their executives happy! Consumers are now growing weary of reality and, as a result, networks are moving once again towards sitcoms. The current season has seen an influx of them as networks search for the next Seinfeld. The rebirth of the primetime sitcom has resulted in a new crop of shows including Modern Family, Cougartown, Accidentally on Purpose, The Cleveland Show and Community.
No wonder networks are hard-pressed to find a lineup that results in “must-see TV”! Despite the inherent challenges, though, TV is still a highly desirable medium for advertisers given its ability to quickly provide high reach. Viewing habits are changing, but consumers are spending a considerable amount of time engaging with their favorite TV programs. It is up to advertisers and their agencies to find ways to adapt campaigns to audiences that are more fragmented, not only across channels and programs, but in terms of alternative delivery via DVRs, VOD, mobile downloads and online access to content.
While networks are searching for that next great show about nothing, we encourage advertisers to be creative in terms of tapping into relevant opportunities that will provide a platform for effective communication with consumers. We’ll be doing the same!