During the third-quarter, cable network ratings tumbled, but they might have gotten a push from Nielsen, an analyst says.
In a new report, provocatively titled “The Ship Be Sinking,” analyst Michael Nathanson of MoffettNathanson Research, says that third-quarter C3 ratings among adults 18 to 49 was down 6%, 2% for broadcast and 8% for cable.
In looking at those numbers, Nathanson notes that the number of people using TV, or PUTs, are being hurt by a change in the way Nielsen has been including broadband-only homes in its sample. Using Nielsen’s current methodology PUTs are down 8-9% among adults 18 to 49. Taking out those broadband only homes, PUTs are down 4% to 5%. (PUTs are down 8% to 9% among people 12 to 34.)
Nathanson says the sharp drop in PUTs “will once again call into question whether the trend is indicative of a structural problem or a measurement issue.”
Either way, the numbers aren’t good and viewers continue to move towards time shifted viewing and non-traditionally delivered video.
Among the broadcasters in the 3Q, C3 ratings were actually stable, with Fox’s 14% drop dragging down the category. NBC, CBS and ABC were up a couple of points or flat.
On the cable side, only 21 Century Fox was up in primetime, with a 12% gain helped by FXX’s Simpson’s marathon. A+E Networks was down 22% and Comcast, Disney, Time Warner, Viacom and Discovery all had double digit declines. Smaller declines were registered by Scripps Networks, down 1% and AMC Networks, down 8%. Independent networks were down 7%.
Among individual cable network FXX was the biggest gainer, followed by National Geographic, FX, Food Network, HGTV and Fox News as the only networks in positive territory in the demo in the quarter. Big drops were registered by A&E, USA, TBS, ESPN and BET.
Already this year, lower ratings have been accompanied by a soft TV ad market, resulting in lower-than-expected ad revenue for most of the big media companies.
“Looking ahead, 4Q 2104 cable ratings will likely still be impacted by the change in Nielsen universe calculations that now include [broadband-only] homes, continued core weakness and tough compares,” Nathanson says. “While early reports of scatter demand tightening in 4Q should help claw back some of this gap, we believe that weakness in core cable ratings will continue to weigh on [stock price earnings] multiples.”