2005 Annual Report - Network TV Economics

Sunday Show Economics

The Sunday news programs are their own, unique genre in network news. At their root, the programs are intercom shows for official Washington. They do not position themselves as the viewer's friendly neighbor, as the weekday morning shows. Nor as a source of information about a full range of events, in the evening news manner. A holdover from an age when broadcasters put on public-affairs programs to please regulators, Face the Nation (CBS), Meet the Press (NBC) and This Week (ABC) are network news's "insider" time.

As they have evolved, they have solidified their appeal to the political or news junkie, to make a base of viewers feel that they are plugged into the inside on a weekly basis. They have become a source of marketing for the networks to get their names in the Monday morning paper, by breaking some incremental news that officials want to deliver.

And the programs, particularly Meet the Press, have become profitable, thanks in part to the perceived elite status of their audience. Advertisers include accounting and investment firms, business-oriented products and higher-end automobiles - a departure from the home-care, grocery and hygiene products that make up much advertising on weekday morning and evening news shows.²

News Magazine Economics

Despite ad bundling, economics for network news magazines look unpromising heading into 2005. Once all the rage and dominating prime time, the news magazines have been surpassed today by reality shows.

NBC's ubiquitous Dateline franchise has continued to experience declines in ad revenue, according to the TNS data. For the latest year available, 2003, its ad revenue dropped 3.5%, from $245.6 million in 2002 to $237 million. CBS's 60 Minutes dropped from $97.6 million in 2002 to $89.3 million in 2003. Meanwhile, 60 Minutes II³ increased its revenue from $63.5 million in 2002, according to TNS, to $70 million in 2003. Taking into account that Dateline was often on three times a week in 2003 (and judging from transcripts published on Lexis Nexis, occasionally four times) that means 60 Minutes remained the most profitable of the news magazine on a per-hour basis. Still, according to insiders, the 60 Minutes figures are a result of CBS's decision to change the ad rates for the two broadcasts, boosting one at the expense of the other - another subtlety.

ABC's 20/20, another of the landmark news magazine shows, showed an ad revenue drop of about 5%, from $93.6 million to $88.7 million. The program's spin-off, 20/20 Downtown, has been cancelled since last year's State of the News Media report.⁴

One magazine show to keep track of, the TNS advertising data suggest, is CBS's 48 Hours Mystery, which premiered as 48 Hours, became 48 Hours Investigates and finally, in 2004, got its present name. While low on the totem pole, it continues to grow. The program's ad revenue quadrupled from $13.7 million in 2002 to $55.7 million in 2003. That may be a reflection of the program's being given more hours over the calendar year on the CBS schedule. A review of transcripts available on Lexis Nexis showed it airing twice weekly for much of 2003.

Nightline, which had previously been holding steady, has begun to slip, albeit slightly. According to TNS, the program's revenue dropped from $78 million in 2002 to $69.5 million, or 11%, in 2003.

Network news executives the Project consulted confidentially to review these figures said one reason the NBC and ABC magazine shows are flagging is that both networks' prime-time schedules are suffering (see The Race Among the Networks in Audience). Revenues for the 10 to 11 p.m. time slot are down about 20% at ABC, according to rough estimates. Nightline's revenues have fallen too, not as badly, but clearly down. That may say more about the state of network entertainment programming than the state of network news.

One point to consider is that as a network's entertainment lineup becomes more successful, it raises the bar for how many viewers a news magazine must draw to maintain its place in the program lineup.

News Magazine Revenue, Select Programs

1999 to 2003

Design Your Own Chart

Source: TNS Media Intelligence/CMR unpublished data, www.tnsmi-cmr.com

* 60 Minutes, 60 Minutes II, 48 Hours, Dateline and 20/20 regularly air once a week. Nightline appears five nights a week, which would contribute to its higher advertising revenue totals.