A Closer Look at Must-See TV

Depending on their attitude toward NBC, TV executives are either lamenting or gloating over Jeff Zucker's fall as the king of Thursday night. Burbank and Madison Avenue are chattering about the network's slip after a 17-year reign as the Nielsens champ on Thursday, the most lucrative night in TV advertising.

The blame, of course, is laid squarely at the feet of Joey. The Friends spinoff starring Matt LeBlanc is struggling in the ratings, especially when compared with the monster-hit original.

But the damage to NBC is not necessarily as devastating as it looks. For all the headlines about NBC's audience and sales losses following the departure of Friends, even industry executives overlook one important fact: The network also lost the burden of a hugely expensive show. The supposedly crippled NBC actually could end up making more money on an average Thursday night than it did a year ago.

“Thursday remains by far our most profitable night,” says Zucker, president of NBC Universal Television Group, including its broadcast and cable networks. “We'll generate more profits than last year. This is something the consumer press will never understand.”

By the end of Friends' run last spring, producer Warner Bros. was charging NBC $10 million an episode. The year before, NBC was paying $7 million. But Joey is costing the network a fraction of that, around $1.5 million.

Compared with Friends last year, viewership of Joey is down a massive 43% among adults 18-49 (a drop from an average 9.4 rating to 5.3). NBC's ability to increase the cost per thousand viewers (CPM) for commercials this season took some of the sting out of the decline; ad sales are down just a little bit less than that.

Here's what really makes losing Friends tolerable: Thanks to Joey, NBC's programming costs for its highest-profile Thursday-night show are down 80%-85% from previous seasons.

Averaged out across the whole night, NBC's 18-49 audience is off 13% for the season to date. But average programming costs for the night—including a pay raise for Donald Trump in The Apprentice—are down around 30%.

Friends was a great thing for us,” Zucker says. “On the other hand, this new world order is pretty good.”

Not quite as good, though, as he was promising last May during the upfront season. Zucker boldly proclaimed to the packed house at Radio City Music Hall, “Next year, our Thursday night is going to be even stronger.”

NBC's Thursday-night fade has had all sorts of ripple effects. The network loses the power to promote programming on other nights. Salesmen have less leverage over clients, such as studios and retailers, who covet Thursday- night spots to drive weekend traffic. And TV stations—notably NBC's own station group—don't care whether the NBC network is a little more or less profitable; they want big ratings to sell to local advertisers.

And Thursday is far from the lone problem facing Zucker and NBC Entertainment President Kevin Reilly, the executive now primarily responsible for NBC's programming. NBC is weak across the board. Even ignoring Thursday night, the network's schedule is off 5% among 18-49s, although Friday and Sunday are relatively strong. Long- running workhorse Law & Order is being squeezed by the newest edition of CBS' own powerhouse, CSI: NY.

And development is a huge problem. NBC had only five prime time slots to fill this fall, so Reilly could afford to be picky. Three new series completely flopped: Hawaii, LAX and the infamous Father of the Pride. Friday drama Medical Investigation (the Centers for Disease Control as SWAT team) is a modest success. With its respectable top-20 finishes, Joey would actually be considered a hit if it weren't being held to the Friends standard.

Initiative Media Broadcast Group Director Peter Butchen calls NBC's Thursday-night savings “almost irrelevant.” The problem, he says, is perception. “If NBC is perceived as a network in free fall, it impacts how advertisers see the network, how producers view the network.”

NBC is making a valiant effort to blunt negative perceptions by talking up its scores not just among younger audiences but among younger, affluent audiences. Zucker points out that NBC beats CBS among 18-49s whose households generate income more than $75,000. That's not a widely used measure of the TV horserace because it's not important to many consumer-product advertisers. Very interesting to Volvo; not so interesting to Kraft.

It's hard to see what programming might revive the network. In the new year, NBC will bring out an Americanized version of BBC's The Office, the boxing reality show The Contender and a fourth flavor of Law & Order (Law & Order: Trial by Jury). None looks likely to fill the Friends vacuum.

For all of NBC's ills, Zucker contends that the company is not having a make-good advertising crisis. Recognizing the impending fallout from losing Friends, the network trimmed back the ratings it guaranteed to advertisers. Joey's audience, Zucker says, is about where the network expected. He says NBC guaranteed that its fourth-quarter prime time would average a 4.0 rating among 18-49s. “We're at 3.9,” he says. “We are completely in line with what we expected.”

Buyers are skeptical that NBC won't be handing out a ton of ADUs—audience deficiency units—within weeks. “They have some built into the schedule,” says one buyer. “I'm betting they'll go beyond that.”

Yes, but just don't bet on the network's being quite as distraught about matters as the conventional wisdom would have you believe.