Are Broadcast TV Networks Entering A Golden Era?: UBS Confab
You wouldn’t think so based on the lousy prime time ratings for everybody except NBC so far in the 2012-2013 season. But CBS’ dauntless Chief Research Officer David Poltrack vigorously argued today in his annual industry forecast at the UBS Global Media and Communications Conference that broadcasters are in great shape. Poltrack projects that advertiser spending for time on the major broadcast networks will fall 2% next year vs 2012. That’s good: It would represent 3% growth if you factor out this year’s boost from the Olympics and the elections. “The economy is finally gaining momentum in the right direction,” Poltrack says. (Zenith Optimedia also predicts a 2% drop for network TV to $16.9B in 2013.) As for the recent ratings, Poltrack says not to worry: The slide is due to what he calls “a chaotic start” with some shows premiering a week early, the presidential debates, and Hurricane Sandy. That’s “not indicative of how the season will progress,” says Poltrack.
What makes him so optimistic about broadcaster’s long run prospects? He says that researchers are becoming more sophisticated in their ability to demonstrate that TV ads result in product awareness and sales. They’re also catching up with people who view shows on non-traditional platforms. For example, CBS knows that the median age for people who watch Elementary online is 36 while the average age of the show’s TV viewers is 57. Also, lots of people are beginning to watch network shows — and ads — on VOD. With Elementary, about 61% of its total viewers watch it live, another 29% play it back on a DVR, 7% catch it on VOD, and 3% stream. Poltrack isn’t worried about online competitors led by Netflix. “A substantial amount of Netflix activity is a replacement for DVD playback,” he says. But he believes that as TV providers offer more interactivity, and the networks become more adept at using social media, broadcasters could claim some of the revenues that go to newspaper coupons and search providers including Google.
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