The switch to commercial ratings that include time-shifted viewing from live ratings has improved the performance of the broadcast networks, according to a new report from a Wall Street analyst.
Neither the broadcast networks nor Nielsen release data on C3 ratings, the numbers upon which advertising sales and revenue have been based since 2008. But in a new report, Michael Nathanson of Nomura Securities says the commercial ratings are significantly better for the broadcasters and that cable networks are starting to see benefits as well.
In the third quarter, the Big Four broadcasters' primetime ratings among adults 18 to 49 -- the most commonly used demographic in media buys -- were down 3.5% using C3, compared to down 7.3% using live program ratings, the old ad industry currency. Fox's ratings went from down 14.5% using live program ratings to down 6.1% using C3.
Nathanson called the different between the ratings systems "gigantic," and they probably result in millions of dollars of extra revenue for the broadcasters.
In the report, Nathanson says that cable ratings also improved in the third quarter for cable, swinging from a 1.8% decline using live program ratings to a 2.4% increase using C3. For NBCUniversal and Viacom, two of the biggest cable programmers, the use of C3 was the difference between falling ratings and rising ratings during the quarter.
While the DVR has profoundly affected the television business, Nathanson notes that the device has not killed off the 30-second spot as many in the industry had feared.
"Perhaps most interesting is how the DVR never lived up to its initial expectations. Four years ago, when Nielsen first began tracking time-shifted viewing, the skip factor averaged 59% and 53% at broadcast and cable networks, respectively, with pundits calling the end of commercial viewing ," he says. "Five years later, with DVR penetration at 37% (up from 21% in 2007), skipping has decreased 800 basis points and 100 basis points at broadcast and cable nets. Now who would have guessed that?"
The smarter way to stay on top of broadcasting and cable industry. Sign up below.
Thank you for signing up to Broadcasting & Cable. You will receive a verification email shortly.
There was a problem. Please refresh the page and try again.