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Patience Key For New Shows

Ratings for last week’s premieres of Sony’s Nate Berkus and CBS Television Distribution’s Swift Justice With Nancy Grace left room to grow, but with big-name brands behind them, they will be expected to settle in and do just that. Syndicators often expect to lose money on a show in year one, so opening-day ratings are less important to them than a show’s growth, its performance in local markets and its demographic performance.

“The first year of a first-run show is almost always a loss leader,” one analyst says. “Those costs are recouped as the show grows, gets upgraded and secures renewals.”

Nate Berkus
and Swift Justice premiered last week at a 1.2 rating/4 share and 1.1/3 household weighted metered market ratings average, respectively, according to Nielsen Media Research. Those numbers should grow in the coming months, but today’s lower daytime ratings require shows to adhere to strict production budgets to be profitable.

Both premieres tied the low for the top premieres in the last five years (see chart). Sony’s Dr. Oz, last year’s successful Oprah spinoff, opened last fall with a 1.6/5 and then climbed to a 2.3 in the national ratings.

The biggest opening-day rating of the past five years belongs to another Oprah spinoff, CTD’s Rachael Ray, which blasted off with a 2.8/9 when the show premiered on Sept. 18, 2006. That rating later dropped to a still-strong 2.3 in the national ratings. In 2007, Warner Bros.’ TMZ opened to a 2.0/4 and went on to average that national rating. CTD’s The Doctors premiered to a 1.6/4 in 2008, but dropped to a 1.3 when the national number came out. Still, The Doctors grew enough over its first season to become profitable and secure two-year renewals.

That sort of improvement could be the case for this year’s syndies—particularly as the days grow darker and winter comes on. “Just an increase of 10% in our ratings can move us from break-even to profitable,” one syndicator says.

But all rookies, including Nate and Nancy, need to show upside. Says one syndicator: “When you are spending $40 million annually to produce a show, you cannot do a 1 rating.”

That’s why most shows are no longer produced at such a high cost, but when CTD’s Dr. Phil premiered in 2002, ratings for top first-run programs were often double or more what they average today. In 2002, Oprah frequently hit a 6.0 household rating, and Dr. Phil scored ratings in the high 4.0-5.0 range. At $75,000 per 30-second spot, Oprah’s advertising rates were on par with those of some primetime programs, and the show grossed annual revenues around $150 million.

Today, a top-rated first-run show can expect to earn in the range of $40 million annually, and if Nate Berkus and Swift Justice are going to pull that off, they’ll both be expected to show growth in the coming months.

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