If network prime time ratings continue the downward trend of the first three weeks of the season, say ad buyers, network advertising make-goods for the fourth quarter could easily surpass $60 million. That was the make-good total estimated for the same period a year ago. If the ratings trend doesn't reverse itself, the full-season make-good total might reach $200 million to $300 million, or several times the normal level.
The buyers acknowledge that those are big ifs, because it is early in the season and trends for the core schedules are being disrupted by huge ratings for the baseball playoffs. Add sweeps stunting, and normal viewing patterns may not be apparent until late November or early December.
Still, buyers find the early ratings returns troubling and are monitoring the situation more closely than ever. "We're not happy about the early trend, but the dust really hasn't settled yet," says Andy Donchin, senior vice president and lead broadcast buyer at Carat North America. "It's definitely a concern."
"It is not good news for the networks," said Mel Berning, president, U.S. broadcast, MediaVest. As to make-goods, he said, "right now, the trend is worse than last year." But he similarly stressed that it's still early and the networks will obviously be making moves in the next few months that could stem the erosion. "The trend is right now that we are owed impressions and we're getting them. But, if the networks over-deliver in November, that's going to wash out the problem they have right now."
For the first three weeks of the season, the six-network rating for adults 18-49 is down 7%, for adults 25-54 down 5%. It's even worse for adults 18-34, which is down 9%. Both buyers and sellers stress that the networks always factor in a level of audience erosion (usually a low-single-digit percentage) when calculating delivery guarantees in the upfront market.
As to which networks seem to be at greatest risk, the tables are turned somewhat from a year ago, when Fox was in the worst shape on make-goods, having to replace about $50 million in spots for the fourth quarter. With baseball working this year and Girls Club
a distant memory, ratings are up, and the network has no make-good shortfall so far. ABC, which dropped sharply in the ratings last season, is holding steady among both the adults 18-49 and 25-54 categories.
Among the Big Four broadcast nets, NBC and CBS (probably in that order) appear more at risk from a make-good standpoint, at least given the ratings trend through the first three weeks of the season. That said, both networks say that, so far, make-goods are in line with expectations and that planned-for make-good spots are being issued as under-deliveries occur.
"There's nothing atypical," said an NBC spokeswoman. "Make-goods this season are at historical levels."
Said a CBS spokesman, "We don't have any make-good problem whatsoever. We're fine because the make-goods we planned for are the ones we're giving back. It's normal course of business."
Throughout the week, NBC is down 12% among its core demographic, adults 18-49. CBS is down 8% among its core 25-54s and 14% among adults 18-49, which it also sells to a lot of advertisers because they insist on it. NBC is down 10% among adults 25-54.
But NBC's biggest problem is Thursday night, its biggest revenue producer, which is down 21% in rating among adults 18-49 vs. a year ago. Last week, the network benched Coupling, the new comedy that it was hoping would join the Thursday-night hit parade, which Friends
is exiting at the end of this season. Instead, Coupling
appears to be getting a November rest.
Under-delivery on Thursday causes problems, especially on ads promoting new movies. "The studios aren't going to take a make-good spot for a movie that opened two weeks ago," says one media executive. "You know NBC didn't plan for a 20% drop on the night."
CBS is down on Thursday as well—12% in 18-49 and 7% among 25-54—though not nearly as much as NBC. It has a bigger shortfall on Monday night, where it's down 17% in 25-54 and 19% in 18-49.
UPN and The WB also have their ratings issues. Both are down sharply in their core 18-34 audience. The WB is down 20% for the first three weeks of the season; UPN, 16%.
"Make-goods may be an issue at some point, but we're not in that position yet," said a WB spokesman. "It only takes one- or two-tenths of a rating point to turn the trend around. So, for now, we're fine."
The CBS spokesman said that, for now, UPN, like CBS, is handling make-goods with spots tucked away for that purpose and hasn't issued any more than planned.