It’s no secret that cord cutting and an ever-widening variety of entertainment options eroded the ratings of linear networks by as much as 10% to 20% in the most recently completed broadcast year. But new details about how that’s impacted the networks’ advertising fortunes have surfaced in new data from Standard Media Index’s (SMI’s) AccuTV ad intelligence platform, powered by Nielsen Ad Intel.
The data shows that primetime broadcast paid unit rates declined steadily, from an average $85,800 in the 2014-15 broadcast year (BY) to $68,900 in 2018-19. And primetime broadcast revenue has declined 3.4% on a two-year compound annual growth rate basis, to $7.2 billion (excluding sports programming).
But every channel tells a different story due to a variety of factors. For example, while NBC reigned supreme in the key 18-49 demo during BY 2018-19 – and had the benefit of Sunday Night Football, This Is Us and new series Manifest and New Amsterdam – a year-over-year comparison shows NBC’s ad revenue was down 23.9%, and paid unit rates were off 20.5%.
There are some big reasons for NBC’s downdraft: it benefited from both the Olympics and the Super Bowl in early 2018 but didn’t have those juggernauts in the most recently completed year.
In contrast, CBS enjoyed a 7.7% rise in ad revenue and 9.7% paid unit rate growth in BY 2018-19. Not only was the network the overall ratings champ in 2018-19, but it benefited from some huge comedy hits, like Big Bang Theory in its final season, its spinoff Young Sheldon.
Fox, which gained Thursday Night Football in 2018-19, saw a healthy audience rise. In lock step with that, its ad revenue was up 9.6% and paid units rose 6.2%.
And ABC, which experienced ratings drops in 2018-19, had a 2.4% ad revenue decline and a 4.2% drop in paid ad units.
Cable network numbers took a different path – which probably has to do in part to their lower unit costs overall as well as audience performance. AccuTV’s database shows that entertainment-focused networks’ nighttime rates went from $17,600 in 2014-15 to $13,500 in 2016-17. Then they stabilized from that year until 2018-19, when the average was $13,800.
Among cable’s most successful channels when judged according to revenue and unit rates was Hallmark Channel’s blend of family friendly, romantic programming. Its revenue grew 11.9% and paid unit rates rose 18.6% in 2018-19.
Other positive cable results were experienced by:
- Food Network, +7.1% in ad revenue and +9.7% in paid unit rates;
- ION Television, +3.7% and +9.4%, respectively;
- Bravo, +2.8% and +13.7%.
HGTV, whose revenue topped every other cable channel in the entertainment category, was slightly up, at 2.2% and 2.4%, respectively. But some channels experienced some turbulence:
- USA was off 11.3% in ad revenue and 8.5% in paid unit rates;
- TNT, -10.1% and -9.9%, respectively;
- Discovery, -8.7%, -0.3%;
- TBS, -7.1% and -5.0%;
- AMC, -11.8%, -10.3%.
Needless to say, linear networks are operating in a “consumer climate” of fragmentation, and a desire by consumers to connect with content that meets their particular interests. A certain amount of unit pricing erosion seems inevitable, although for the most part it is holding up far better than audience ratings, which suggests that networks are proving their value to marketers.
Live entertainment programming and sports seems to be key to keeping consumers engaged. And when ATSC 3.0 is fully deployed — which will allow broadcast transmissions and wireless broadband to be used together — it will allow broadcast stations and their affiliated networks to provide more rich and responsive media experiences.
Standard Media Index accesses actual invoices from the world's largest media buying groups, as well as leading independents and offers detailed ad intelligence across all media types, including television, digital, out-of-home, print, and radio.