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Early Season Ratings Have Analysts Concerned

Ratings for the broadcast networks during the first two weeks of the new season have slid far enough for analysts on Wall Street to start to sound alarms.

Although advertising revenues are based on C3 commercial ratings which haven’t yet been released, “there is little double that early 2012 network results have been disappointing,” Michael Nathanson of Nomura Securities says in a research note.

Similarly, Anthony DiClemente of Barclays Capital notes that live ratings “have shown material weakness.” He asks if the decline is caused by a shift of eyeballs to online platforms or, more likely, that this year’s slate of new shows is simply uninspiring and there’s extra competition from NFL football.

Nathanson’s figures show the Big Four networks down 11%, even with NBC showing a 12% gain.

“While we are still awaiting the C3 ratings for the first couple of weeks from the new TV season, historically we have learned that C3 ratings have led to an average boost of 380 basis points [or 3.8%] for broadcast networks,” Nathanson says. This year might be different because of the shift of The Voice by NBC to the fall and by better distributed football games in primetime airing earlier in the season on NFL Network.

“Football is stealing eyeballs,” says DiClemente. Ratings for Sunday Night Football on NBC and Monday Night Football on ESPN are up, and when you add in the new Thursday Night Football games on NFL Network, NFL ratings are up 12%. “We believe the uptick in NFL viewership is having a cannibalistic effect on original program live ratings, as football now competes with originals 3 nights a week.”

DiClemente also notes that increasing DVR usage is probably impacting the live ratings and bodes well for the forthcoming C3 ratings on which ad sales are based.

Nathanson adds that in addition to having an effect on ad revenues and profits, the season’s early return can impact the syndication pipeline. He notes that CBS has already canceled Made In Jersey, a show it co-owned. On the other hand, Fox and NBC have ordered full season pickup of several sitcoms.