In spite of the continuing questions about viewership, and the pressure on resources, and the effect of that on quality, news continues to contribute significantly to each network's bottom line.
This year, we found three trends in network news economics:
- Evening newscasts in 2003 realized the first rise in advertising revenues in years, though partial information for 2004 suggests that was a temporary blip rather than the start of an upward trend.
- Morning news shows continue to be major revenue generators for the news divisions. Projections based on partial information for 2004 indicate that the pattern continued.
- Even some of the network news magazines, which had been showing a decline in ad sales in 2002 have begun to level off and in some cases, increase revenues.
Evening News Economics
As noted in last year's report, there are little or no public data on the operating profitability of network news divisions. In the past, journalists covering the Big Three networks got estimates from network officials on background. Even then, the numbers were difficult to verify. Now fewer reporters cover the business aspects of network news divisions, which are small operations inside huge conglomerates.
To adjust, we have tried to develop a continuing picture of the fortune of network news by looking at advertising revenue. While the numbers are not without their own problems (networks now bundle ads between programs, making it difficult to allocate) they do give us some independent information to reflect on.
Interestingly, there appeared to be no bounce to network news revenues at all from the presidential campaign. TNSMI/CMAG, a company that tracks political spending, reports that not one dollar of political advertising in 2004 went to buy network time. The election was indeed narrowly fought, truly contested in only a dozen swing states, not nationally. The political parties have stepped back from their national civic duties even more radically than the network news divisions have.
Nightly News Revenues
The numbers, from TNS Media Intelligence, have been calculated based on a calendar year, from January to December.
In 2003, the advertising revenue for all of the Big Three evening news programs began to show an up-tick. Partial data through August of 2004, however, suggest that growth may not have continued.
From 1999 to 2002, NBC suffered a 13% drop in its ad revenue, according to TNS data. ABC suffered a 9% drop. CBS, the No. 3 network, enjoyed an 8% gain.
In 2003, the last year for which we have complete data, that changed. According to the TNS data, NBC's evening newscast remained No. 1, taking in $161.9 million (in calendar year 2003) an increase of 3.6% over the year before. That is still less than in 2000.
ABC evening-news ad revenue was $148.8 million, up from $144.3 million in 2002, its first increase since 2000, but again still lower than the 2000 total.
CBS Evening News in 2003 showed its third straight annual advertising revenue increase, according to the TNS data. It took in $155.8 million, up from $149.4 million the year before. CBS's ad revenue was higher than it had been in all the TNS data we have, going back to 1999.
Through August 2004, however, the numbers appeared to be overall. According to TNS, NBC led with $103 million (which would project to $154 million at the end of the year). ABC was second at $101.9 million (on track for $153 million). CBS was third with $97.2 million (on track for $145 million).
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1999 to 2003
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Source: TNS Media Intelligence/CMR unpublished data, www.tnsmi-cmr.com
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The revenue numbers, however, need to be viewed carefully, industry insiders say.
First, they could drop even lower by the end of 2004, as they did in 2003.
In addition, the fact that the networks, particularly NBC and ABC, are selling ads in packages makes calculating revenue figures problematic. An NBC ad buy could include, for instance, the network nightly news, CNBC and MSNBC, plus online deals with MSNBC.com. That gives networks leeway in terms of how they assign the revenues to different programs. It is possible that the revenue data are comparing apples and oranges.
Indeed, some network news professionals say the bundling of ad sales has become an important factor in the race for No. 1 in evening news. If you are on top, you have more leverage to bundle ad sales, to tell advertisers that if they want preferred spots on the evening news, they may be forced to buy time in other programs.
What's more, internal network sales data provided by network sources on a confidential basis to the Project last year suggested the numbers are close but not entirely accurate.
In any case, the TNS numbers, alone, suggest 2004 proved a somewhat difficult year, after the optimism of the year before.