Broadcast TV or Cable, It's All the Same to Consumers

Advertisers Also Making Less of a Distinction as Ratings Gap Narrows

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NEW YORK (AdAge.com) -- Mention Tom Brokaw, and what pops to mind is his long association with NBC, one of the best-known and most venerable of the nation's six broadcast entities. But this popular newscaster's next project, traveling along U.S. Highway 50 to interview "real, everyday people" about the economy, is set to roll on NBC Universal's USA Network.

At one time, basing such an important program on cable might have seemed a waste of Mr. Brokaw's time and talent. Now it matters very little to most TV viewers, who see less and less of a distinction between boob-tube giants such as NBC, ABC and CBS and cable cousins such as USA, TNT and MTV.

Cable/Network Shifts
And neither, it seems, do the networks. Mr. Brokaw's work will be seen this spring in prime time on USA, on NBC's "Nightly News" and "Today Show," and on MSNBC but will culminate with a one-hour documentary to appear in January 2010 on USA.

"Kids and teenagers and even people under 35 don't really differentiate between cable and broadcast. It's just TV," said Jim Spiropoulos, VP-research director of marketplace analytics at Publicis Groupe's MediaVest.

And that view is starting to travel from consumers to advertisers, said Mr. Spiropoulos, who said he suspects more changes are on the way. He predicted that all but the most premium broadcast shows will end up with ratings on par with some cable options within a few years. "The way things are going, we could see the broadcast networks air prime-time shows in repeats in different dayparts the way the cable networks do to keep audiences and keep selling those viewers."

Smaller tents
No one's saying broadcast doesn't have its mass-audience moments. No other media venue can offer the broad reach of a Super Bowl, an Olympics or even an episode of "The Mentalist" on CBS or the finale of "American Idol" on Fox. Those big-tent shows, however, are growing harder to find. And audiences are starting to dwindle.

According to research from independent agency RPA, the number of viewers who watched programs live or as many as seven days afterward with a DVR on the six broadcast networks fell in every significant category -- overall viewers, adults 18 to 34, adults 18 to 49, adults 25 to 49 and adults 25 to 54 -- between midseason 2007-2008 and midseason 2008-2009. Meanwhile, viewership across 76 cable outlets increased in all of those categories.

To complicate broadcast's position further, ad buyers are increasingly trying to link their clients to specific programs and pieces of content -- no matter where they air. That plays into a theory long espoused by Michael Nathanson, a media analyst at Bernstein Research. Examining this issue in a September research note, Mr. Nathanson said the broadcast industry "has managed to survive due to the premium paid for its relative mass reach, which has been maintained as audiences leave."

But the analyst said he sees "great risk going forward regarding broadcast's ability to sustain its pricing advantage." With more cable outlets devoting resources to high-quality programs, such as "The Closer," "Rescue Me" and "Army Wives," cable looks to increase its viewer share "at a time of reduced original-program investment by broadcast" and, in doing so, could boost its ability to notch price increases. Mr. Nathanson estimated that if the Big Four broadcast networks continue to lose 5% to 6% in viewers each year and big cable outlets such as TNT, TBS, USA, ESPN and Spike can grow at that same rate, broadcast would have just one and a half times the reach of cable by the 2012-2013 season.

Cable outlets have become more aggressive about touting their offerings. ESPN and Time Warner's Turner suite of cable channels have held their presentations for the annual "upfront" sales season during the same week as the broadcasters. Last year, Turner offered a "broadcast replacement" program that would give marketers ad time in the best of Turner's programs, such as "The Closer," but none of the lesser-performing slots in other dayparts and programs.

Targeted masses
Meanwhile, several broadcast networks seem to be adopting practices that have helped cable outlets achieve success. The CW may be a broadcaster but has a narrow focus on young women. Its flagship show, "Gossip Girl," brings in a rabid audience. Advertisers know what they get, but they also know they aren't getting the teeming masses.

NBC's behavior in recent months is also prompting questions. The network is having a tough time getting new scripted fare off the ground, as evidenced by middling reaction to programs such as "Knight Rider," "Kings" and "Crusoe." Next fall, NBC will take things one step further, running a five-days-a-week talk show from Jay Leno in its 10 p.m. slot -- essentially ceding ratings to dramas that will run on ABC and CBS.

During a question-and-answer session March 18, NBC Universal CEO Jeff Zucker defended the Leno decision, saying that rivals have already devised a system with fewer hours of programming without being castigated for it. "Nobody thinks Fox is any less of a network or the CW. They don't denigrate that because it's only two hours a night."

He also told the assemblage the broadcast upfront this year would move slowly, while cable would show strength. One NBC Universal property, the USA cable channel, "is now competing with the broadcast networks," he said.

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