Early-Morning DramaNBC's Today show slips, ABC's GMA gains 1/30/2005 07:00:00 PM Eastern
All eyes are on the news of the evening news these days: CBS' controversial report, Brokaw's retirement and Jennings' attempt to exploit the disarray. But, for those of us who love numbers, the real money is in the morning.
Matt and Katie, Diane and Charlie, and the five anchors at CBS are the guardians of one of the great money machines in television: Not only is the network morning-news game a $1 billion business, but it's a vastly more profitable one than high-cost prime time shows can ever hope to be. The producers cranking out prime time shows risk billions of dollars and make their networks a few hundred million dollars—if they're lucky. The bleary-eyed morning-show executives shows give their masters about as much profit by spending just a few hundred million.
Now the lead horses in the race are changing. NBC's long-dominant Today show is slipping, while ABC's rival Good Morning America is closing in. CBS' The Early Show remains a distant third, but it's growing the fastest, and its growth is at the expense of NBC. The Early Show has dramatically improved since senior executive producer Mike Bass was recruited to overhaul it two years ago. Bass is stealing enough viewers from Today to make life easier for GMA.
Ben Sherwood, the onetime NBC News producer who took over GMA in April, insists there are “two parallel tracks: NBC is struggling, and GMA is getting stronger.”
Morning-news audiences tend to shift gradually, a few percentage points per year, he points out: “Little by little, day by day, we're making strides. This is a marathon competition—260 shows a year spread out over many, many years.”
Today producer Tom Touchet professes no concern. NBC's ad-sales reps have started promoting ratings among high-income viewers since its prime time audience began slipping. Likewise, Touchet argues that Today is well ahead in viewers earning $75,000 or more. That lets Today charge a premium for ad spots, he says, adding, “That's the thing that NBC Universal Chairman Bob Wright and NBC Universal President Jeff Zucker care most about: the sales number.”
Still, anxiety is growing that Today might need a rescue of its own. The show is down 5% in both total audience and the key adult 25-54 demo. GMA, meanwhile, is up 3% in total viewers and 1% in the demo. A year ago, Today led GMA by 1.2 million viewers. This season, the gap has narrowed to 700,000.
GMA does occasionally top Today; for example, it beat its NBC rival by 400,000 viewers one recent Monday. It doesn't hurt that ABC's prime time schedule is suddenly resurgent, but GMA's growth well predated both ABC's broader turnaround and NBC's simultaneous prime time slump.
At stake is one of the biggest money-makers in television. Today generated $500 million in sales last year, 10% of parent NBC's total. But industry executives say it generates nearly $300 million in profits, a 60% margin. That is about the same amount of profit NBC was able to squeeze out of its remaining $5.5 billion in ad sales, the bulk of which came from prime time.
That is an important financial cushion for NBC at a time when its prime time schedule is in trouble. Its Thursday- night lineup is shaky in the ratings, and virtually none of the new fall shows are likely to help. Today's No. 1 status allows it to command an $80 million annual premium over the price it could demand as No. 2 with the same audience.
Randy Falco, president of NBC Universal Television Networks Group, won't detail morning-news financials, but he acknowledges the importance of Today's strength to the network, delivering year-in and year-out. “Prime time schedules come and go,” he observes, “but the Today show and The Tonight Show are always there.”
According to Nielsen Monitor-Plus ad-tracking data through October 2004, Today captures about 55% of the ad dollars spent on morning news, partly because it's a three-hour show, while its rivals run only two hours. GMA gets approximately one-third of that revenue, CBS about 15% (The Early Show's sales are diminished in part because CBS affiliates can locally program and sell 15-minute chunks of the program).
One wild card in the game is Katie Couric. Does she want a shot at TV news' big stage, the evening anchor desk? As initially reported by B&C in December, CBS has approached Couric about replacing CBS Evening News anchor Dan Rather. As a Hollywood guy, CBS President and CEO Les Moonves considers this a casting decision; he wants a star.
Couric is a star, but she's a star with a contract and a big stage of her own. That stage, of course, requires a 4 a.m. wakeup time. Her contract runs another 18 months, but Moonves would be willing to wait if he thought she were available.
This is not a topic that Touchet likes to ponder. “I love Katie. She's brilliant. She can do anything she wants. I hope she decides to do it here.”
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