The Wall Street Journal joins the pack in piling on NBC's poor showing so far this season:
Less Seen TV: NBC Viewership Takes a Tumble
By BROOKS BARNES Staff Reporter of THE WALL STREET JOURNAL
October 13, 2004; Page B1
The peacock's feathers are fraying. After more than a decade as the dominant broadcast network, General Electric Co.'s NBC is having a rocky fall.
So far this season, the network has endured double-digit ratings declines in both total viewers and viewers aged 18 to 49, the demographic that advertisers pay a premium to reach.
Particularly troubling: For the first time since 1987, NBC is losing the ratings race on Thursdays, the night that by far draws the most advertising dollars and has been the bulwark of NBC's "Must See TV" franchise.
NBC Universal Chairman Bob Wright, publicly putting a brave face on things at a Goldman Sachs conference last week, said the network is "performing very well." Still, executives are trying to stop the bleeding. NBC last week yanked the poorly performing "Last Comic Standing" from its schedule. Still, some analysts say the network is limited in the amount of immediate triage it can perform.
"You never want to draw a firm conclusion from a few weeks, but NBC's chances of regaining the lead appear to be limited," says Lowell Singer, an analyst at SG Cowen & Co.
NBC says it expects its ratings to improve significantly as the season progresses.
NBC's performance three weeks into the traditional TV season demonstrates how quickly fortunes can change in the fast and fickle television business, especially in this era of on-again, off-again reality shows. Just six months ago, Jeff Zucker, chairman of the NBC Universal Television Group, trumpeted the network's longtime hold on the No. 1 spot to advertisers, and NBC raked in $2.9 billion in advertising commitments for the 2004-2005 season -- more than any other network. "Our Thursday night is going to be even stronger," Mr. Zucker promised ad buyers gathered at New York's Radio City Music Hall in May.
The network had been expected to have a rougher time this fall without ratings engines "Friends" and "Frasier." Still, NBC executives were optimistic that they could piggyback on their broadcast of the Athens Olympics to turn new programs -- notably "Joey" -- into big hits. "Joey" is notching strong ratings against heavy competition, but it isn't a breakout. Other new series just aren't performing: "LAX" has fallen 43% in viewers 18 to 49 since its preseason premiere Sept. 13, "Hawaii" is down 38% and the expensive animated comedy "Father of the Pride" is off 34%.
While audience falloff from a show's premiere is expected, these declines are steeper than the industry considers acceptable. Overall, NBC is down 12% in total viewers and 16% in the 18-to-49 age category.
NBC is facing powerful competition from Viacom Inc.'s CBS, which has improved its ratings on six nights and is winning Thursdays, largely because of its hot "CSI: Crime Scene Investigation" franchise. What has taken NBC particularly off guard is Walt Disney Co.'s ABC, which has rocketed from last place to first in certain time periods, thanks to three big new hits. "Desperate Housewives," ABC's new Sunday-night soap opera, has given ABC some of its biggest ratings in a decade.
"It's good to see that shows are really popping good numbers," NBC's Mr. Wright said at last week's conference. "I certainly wouldn't mind having a couple of those shows." (NBC passed on "Desperate Housewives" early on, according to its creator, Marc Cherry.)
Executives at four big ad-buying companies say NBC is in danger of failing to meet some viewership guarantees and having to give away "make good" time to advertisers as compensation if its ratings declines worsen. Although News Corp.'s Fox has struggled with its new year-round programming format, Fox's slate of shows, in particular, could cut into NBC's schedule once it launches in November. "This is very serious for NBC," says Jason Maltby, co-director of national television for ad buyer MindShare.
NBC strongly disputes that advertising is in peril, or that ratings declines are steeper than it predicted. "We are nowhere near being in a make-good situation," says Randy Falco, president of the NBC Universal Networks Group. NBC says it expects to continue to dominate ad sales, even if it isn't No. 1 in the crucial November "sweeps" month, because it delivers a more-upscale audience than rivals. Says Mr. Zucker: "We are feeling good about where we are."
Even with the decline in overall ratings, analysts and ad buyers point out that NBC remains competitive on most nights and is winning Fridays due to solid numbers from its new drama "Medical Investigation." (Friday, however, isn't a night of high viewership or young demographics.) The presidential debates also hurt NBC more than other networks because of the shows that were pre-empted. And NBC has a stable of established hits that are chugging away: Viewership is up for "ER," "Law & Order: Special Victims Unit" and "Crossing Jordan."
The problem is that the network has stayed on top for nearly 20 years by developing a steady string of megacomedies to buoy Thursdays. There was "Cheers" and "The Cosby Show." After a brief blip came "Seinfeld," followed by "Friends." These well-made series, heralded as cutting edge for their time, attracted a young, upscale audience that NBC could sell to advertisers for a premium.
NBC is counting on "The Apprentice" to be the next show in the trajectory. But reality series are proving to be less reliable than traditional scripted ones, says Tim Spengler, director of national broadcast at ad buyer Initiative. Without "Friends" as a lead-in, the Donald Trump vehicle has slipped this season -- something media buyers say took them by surprise. "Survivor," for example, didn't show a similar vulnerability. Among viewers 18 to 49, "The Apprentice" is off 15% from its performance last season. Mr. Zucker notes that "The Apprentice" faces surging competition from "CSI."
The network's internal culture is centered on being No. 1, and people inside the company say the lower ratings have been hard to swallow -- and have been made worse by CBS crowing about its success. "Start spreading the news! 'CSI: NY' tops 'Law & Order' in total viewers and key demographics," blared one recent CBS news release.
Mr. Zucker says it is "way too premature" to think about making major schedule changes, and he emphasizes that he expects the network's standing to improve as the season wears on. "We have a very strong stockpile for midseason," he says, noting that "The Apprentice" launched in January.
Media buyers agree NBC has some promising shows in the hopper, including a fourth "Law & Order" focused on juries and "Medium," a procedural-style drama starring Patricia Arquette about a woman with a sixth sense.