Must-watch TV is looking more like must-wait TV.
The rapid rise of time-shifted viewing — driven by DVRs, video-on-demand options and mobile devices — decimated TV ratings in the first quarter and threatens to drag down the annual ad- sales season that swings into high gear in just a couple of weeks.
Total primetime commercial ratings fell 8 percent across the board, marking the sixth straight quarter of total TV declines — and the steepest drop since the third quarter of 2009, according to Nomura analyst Michael Nathanson.
For the major broadcast networks, the figures are even more startling.
Without the Super Bowl, which it broadcast last year, NBC was off 40 percent. Fox was down 19 percent, and ABC was down 6.2 percent. CBS was saved only by Super Sunday, posting an 8 percent gain.
“The first-quarter broadcast ratings, under any metric, were ugly,” Nathanson wrote in a report to clients.
(News Corp. owns Fox and the Post.)
Nor is the drama limited to broadcast. Even cable networks, which boast a growing roster of hit shows from History’s “The Bible” to AMC’s “Walking Dead,” were down 3 percent in primetime among adults ages 18 to 49 years old.
The steep drop couldn’t come at a worse time for the TV business, as it heads into its annual “upfront” negotiations with billions of ad dollars at stake.
Nathanson predicts a shift of ad dollars to cable, given broadcast’s especially weak hand. Cable booked $9.8 billion in upfront ad dollars last year, a 5 percent gain. Broadcast took in around $9.3 billion.
“The world has become more complicated, and behavior is changing,” Nathanson said. “The DVR is in 47 percent of households.”
Right now the networks are paid by advertisers based on how many viewers watch the commercials in their shows over the first three days after a show is aired, known as “C3.” But there has been a push to extend that to C7, or 7 days, allowing the networks to capture more delayed viewing.
The problem isn’t lack of interest in TV, but rather audience fragmentation and ratings giant Nielsen’s inability to catch up to the consumer. More viewers are cobbling together their TV watching from a variety of sources, including DVRs, Netflix and Xbox.
Just weeks ago, Netflix CEO Reed Hastings boasted that his service streamed 4 billion hours of content in the first quarter. That figure puts Net-flix on par with a large cable network, according to BTIG analyst Rich Greenfield.
He estimates that Netflix customers are watching 87 minutes a day of content, up from 79 minutes last July.
“The risk is, if Netflix ups their game and has more originals, then there’s a little bit of cannibalization,” said Nathanson.
In September, Nielsen will change the definition of a TV household to include homes that watch streaming video via a gaming console, for instance. Currently it counts only those watching on a TV set. The definition, however, won’t extend to mobile viewing on tablets.
“There is no question audiences are fragmented, but people are spending just as much time with TV,” said Gary Carr, head of broadcast buying at TargetCast.