Five years ago today, the Writers Guild of America went on strike. For 100 days, Hollywood was more or less on lockdown as writers held out for higher residual earnings on new media revenues, including DVDs, online streams, and more. Though varying sources disagree as to exactly how much the WGA strike took out of Hollywood and the local L.A. economy (at least $500 million for the former, anywhere between $380 million and $2.1 billion for the latter), most agree that those 100 days were costly in some fashion.
Numbers and politics aside, the underlying theme of the WGA strike was pretty simple: The current business model of American television, particularly the broadcast model, was not going to be sustainable. Everybody could see where viewers' consumption habits were headed—online, on devices that weren’t “TV”—and the writers were smart to try to get a bigger piece of the new pie (whether or not they were successful in doing so and whether or not the strike itself accomplished much is still up for debate, I think).
Now here we are, five full years later—and those squabbles over residuals seem even more important. Unsurprisingly, the broadcast network model seems less sustainable than ever before. In fact, based on what we’ve seen in the first six weeks of the fall season, I’m willing to say that the broadcast model is already broken. I’m generally referring to the big four networks—ABC, CBS, NBC and Fox (sorry, The CW)—and their attempts to gain the attention of the mass, live audience in hopes of making the largest amount of money on ads. While there's certainly more at play with television in 2012, the broadcast nets still rely on the old advertising system for buoyance, and based on the traditional metrics they like to use, 2012-2013 is not off to a great start.
You folks know how much I hate the Nielsen ratings and reporting on them, but for the purposes of this story, I have to use them because unfortunately, the networks still do. Compared to just last season, ratings in the supposedly all-important 18-49 demographic are down almost across the board. ABC is down 7 percent, Fox is down 24 percent, and CBS, long the last bastion of the broadcast model, is down 18 percent. In some hilarious and odd twist of fate, NBC, America’s punching bag, has seen a 24 percent increase in ratings year-to-year (mostly because of The Voice, which has positively impacted Revolution, Go On, and The New Normal). And while that’s damn impressive for the Peacock, you have to know that something is definitely wrong if NBC is atop the mountain again. (Again, The CW doesn’t really count, but their ratings are down 25 percent as well).
Meanwhile, CBS research reports that DVR usage is up 6 percent, Hulu traffic is on the rise (it was up over 1.5 percent before the fall season began, according to TechSpot) and despite some faltering throughout 2012, Netflix streaming still accounts for a substantial amount of traffic online (it was up by nearly 33 percent before taking a hit during the Olympics). But so many of those numbers are fluid, and we’re not exactly sure what networks do with them.
However, we all know where numbers actually matter: ad dollars. And some of the figures in that area are quite interesting. According to AdAge, the ad rates for performance episodes of American Idol—you know, television’s primary powerhouse—have dropped from $502,900 to $340,825 per 30-second spot, while results show episode rates have dropped from $468,100 to $296,002 per 30-second spot. To be fair, a number of shows have seen their ad rates increase, especially sitcoms, so it’s not as if there’s an ad money crisis throughout the industry. However, shows like New Girl that received major increases in ad rates are underperforming in the ratings as compared to last year, a sign that advertisers might have overpaid, networks might have overvalued their shows, or some combination of both.
Thus, we have declining ratings, increased online viewing, and screwy things happening with advertising. If that’s not a recipe for disaster for the broadcast model, I’m not sure what is. And that's BEFORE you consider that basic-cable offerings like Sons of Anarchy and The Walking Dead are consistently dominating their nightly competition in ways that we haven’t quite seen before.
We can probably lay some blame on the lame batch of new programs on broadcast this season, few of which have caught on with audiences. Much to the chagrin of anyone participating in our annual Dead Pool, the big four networks have held onto so many of their new shows—even though they are clearly duds—mostly out of confusion and desperation. They're in a bad-habit situation where they've hung onto broad, formulaic programming in hopes of appealing to the largest, widest audience for far too long, and even though it's not working, the networks still exist in a world where broadcast just can't be as risky/gritty/edgy/raunchy as cable. And maybe you could argue that many successful cable shows have such a dedicated audience that it probably wouldn’t matter where they aired at all.
But even still, this season really does feel like some sort of tipping point for the broadcast networks. The live audience has been slowly deteriorating for quite a long time, unless we’re talking about sports telecasts. Meanwhile, “non-live” usage has been on the rise and networks have tried too long to use "non-TV" spaces like the internet as a supplement to the live programming (and the revenue it brings) instead of placing a premium value on them. What's more because of online, viewers are not only not watching TV in the traditional way, they're perhaps also losing any identification with specific networks. So if you're catching up with Revolution on Hulu (or via torrents), you don't really care that it's on NBC, right?
I wish I had a more creative way to say this, but broadcast television—and broadcast television measured by the Nielsen ratings—is just busted. The successes of CBS and shows like Idol have kept the façade up for a little longer, but CBS isn't having its best season and the breadth of singing competitions is getting to a point where they no longer constitute event programming in the same way as they used to (which is probably why Idol’s ad rates have dropped so dramatically).
And so the big question is, now what? Honestly, I’m not sure. I could further vouch for the abolition of the Nielsen ratings as a unit of measurement and the release of more complicated—but clear—viewership data. I could say that the broadcast networks should emphasize online and/or second-screen experiences. And I could definitely suggest that the major networks simply stop trying to recreate the mass live audience that just isn’t going to be there as regularly as it was in 1984. All of those ideas seem valid to me, but if they were legitimate fixes, one would think that the broadcast nets would be smart enough to really hit them hard.
But none of that changes the fact that, five years after the WGA strike, the industry and its employees aren’t really better off than they were in 2007. And so, let’s just presume this model is as busted as I might think it is. The industry needs radical ideas. What would you suggest?