The slow but steady erosion in the power of primetime television is about to change the fundamental structure and financial clout of broadcast TV’s perennial cash cow, warn advertisers, which pump more than $9 billion a year into the three-hour nightly window.
With its waning audience, lack of a breakout hit in two seasons and with the writers’ strike about to render the TV landscape barren of any new scripted shows, media planners and ad buyers are predicting:
* The decades-long three-hour primetime window could shrink by one-third to just two hours a night.
* The growth of less-expensive reality shows over the past several years will continue to accelerate.
*The standard TV season, from September to May, as well as the upfront ad-selling season will disappear.
“The network model is starting to break,” said Gary Carr, the director of national broadcast with TargetCast, a firm that buys and places ads for clients.
“What’s going to happen is lower quality programming, lower ratings and more competition,” said Barry Lowenthal, president of Media Kitchen the media planning arm of ad agency Kirshenbaum Bond & Partners.
The comments come days after ratings-challenged NBC was forced to do the unthinkable – give cash back to advertisers because it couldn’t deliver the ratings points it promised during the “upfront” sales season in May.
The move rattled Madison Avenue, which for years has depended on the major networks to bring the big audiences they couldn’t get in cable or online.
“How do you go to your board and say you didn’t deliver the advertising, but the good news is you didn’t spend the money,” said Gene DeWitt, the chairman of DeWitt Media Strategies.
“The industry is in a quandary,” he said.
One executive with his hands on the purse strings – General Electric Chief Executive Jeffrey Immelt – acknowledged changes were afoot after cutting the company’s growth forecast for its NBC Universal unit, including the flagship TV network.
In a presentation to investors, Immelt said he would look to trim costs at NBC, including lowering its investment in primetime programming.
“The TV network business is going to change,” Immelt said in a subsequent interview with CNBC, also part of NBC Universal. The $9 billion laid out on prime-time advertising represents just up-front spending – spots buys are on top of that.
For people in the industry, his comments translated into more cheap reality shows and fewer high-priced drama shows such as “Heroes.”
The strategy is a risky one for broadcast, particularly with cable rivals making ratings gains with strong-scripted programs such as “The Closer,” “Mad Men” and “Army Wives.”
Such moves have convinced many in media and ad circles that the business has moved into a new era driven by profits and cost-cutting rather than the hits that were once its hallmark.