In this age of intensifying media consolidation, owning the top-rated broadcast network doesn't make you the biggest player in television. It makes you third in the pack, maybe even fourth. Top honors go to the folks with the strongest portfolio of cable networks.
That's the conclusion of Morgan Stanley media analyst Richard Bilotti, who likes to look at TV viewership not just network by network but voracious media conglomerate by voracious media conglomerate.
What he found is that the owner of the largest broadcast network—NBC—controls fewer viewers in key demos than some rivals because its portfolio of cable networks is so weak (see story, page 1).
Looking at prime time Nielsen ratings for the 12 months ended June 30, Bilotti tallied up the viewership of broadcast and cable networks by their respective owners to see what share they really controlled.
Bilotti found that the real dominator of television is Viacom. It's not so much its ownership of CBS, which just squeaks by NBC in Nielsen households and gets beaten comfortably by NBC in everyone's favorite demo, adults 18-49.
But Viacom also owns UPN, highly rated cable network Nickelodeon and youth-heavy MTV. So, Bilotti found, Viacom attracts 25.9% of all TV households and 24.8% of adults 18-49.
Bilotti also measured the effect of ratings changes on a network's revenue. He calculates that a mere 0.1 improvement in those key 18-49 prime time ratings can mean big bucks.
For a broadcast network, that change (an additional 127,000 of the nation's 127 million 18-49 adults) adds or subtracts $55.6 million a year in ad sales (which typically run $3 billion to $4 billion).
For a cable network, a 0.1 change means $44.5 million in additional sales, a huge swing for even the top-rated cable networks, whose ads sales range from $400 million to $800 million.