The broadcast networks will be happy to put 2020 in their rear view mirror.
Unlike streaming platforms, which got a tremendous boost from the nationwide shutdowns caused by the coronavirus pandemic, the broadcast networks endured steep drops in prime-time viewing this year.
The drops in Nielsen ratings go far beyond the typical erosion of the past decade that is a result of viewer fragmentation due to the dramatic increase in content options coming from streaming services.
The declines in prime-time viewers range from 32% for Viacom CBS Inc.’s VIAC 0.98% CBS, 28% for Fox Corp.’s, 25% for Comcast Corp.’s NBC and 7% for Walt Disney Co. ABC compared with the fall of 2019. Fox Corp. and Wall Street Journal parent News Corp NWS -0.78% share common ownership.
The drops can be attributed in large part to the effects of the virus on their businesses. Production shutdowns in the spring and summer left broadcast networks scrambling to fill their schedules with fresh content in the fall, making them less able to capitalize from an increase in overall television viewing from people being stuck at home.
Broadcast networks operate under a more restrained business model than Netflix and other streamers, which stockpile programming and had plenty of new shows and movies to offer housebound viewers.
Broadcast shows are typically ordered in the spring for the following season. This season, new episodes of existing series weren’t ready to air until late fall. The few new series there were had to be rushed onto the air without the usual lengthy development process.
Networks got some cost savings from the reduction of original programming being produced and developed for the fall. However, production costs in general have increased because of the precautions put in place because of Covid-19. For a one-hour drama, the additional costs are more than $300,000 an episode and over $150,000 for a comedy, people familiar with the matter said—a 10% to 15% increase over the usual production costs.
The decline in ratings is being felt on the advertising side as well. NBC ad revenue was down 12% in Comcast’s third quarter, which included the month of September. ABC’s ad revenue for the early fall was flat while the company saved money from production shutdowns. Ad revenue for CBS in the third quarter was off 1%, while Fox’s last quarterly results through September showed ad revenue declines of 15%.
The networks took different approaches to dealing with the disruptions to their content pipelines that the pandemic wrought. CBS relied heavily on reruns of current shows, betting its lineup of traditional sitcoms and procedural crime dramas was well-positioned for repeat viewing.
NBC relied on imports such as the Canadian dramas “Nurses’’ and “Transplant” to fill holes left on its schedule as well as game shows such as “The Weakest Link” and a new season of the talent show “The Voice.”
“I actually think we weathered the storm better than I thought we would,” said Jeff Bader, president of program planning for NBC and its cable networks. Mr. Bader said NBC managed to have 82% of fresh content during the fall, a decline of just 6% from the previous fall, thanks in part to a heavy quotient of new unscripted fare.
Not every gamble NBC took paid off. A pandemic-inspired new comedy called “Connecting” that primarily took place in video chats was pulled after only four episodes.
The dramas that have been on for much of the fall have also seen double-digit growth in catch-up viewing either via DVRs or on NBC platforms, Mr. Bader said. This is indicative of the continuing trend of viewers pivoting away from live television to on-demand, which is also how the networks are now determining success. A show with seemingly low linear ratings isn’t necessarily headed to the chopping block if it does well on secondary platforms.
“The definition of success is constantly evolving,” said Fox Entertainment head Michael Thorn.
ABC and Fox were fortunate to be able to make fresh episodes of their unscripted hits “The Bachelorette,” “Dancing with the Stars” and “The Masked Singer,” respectively. The success of “The Bachelorette” helped cushion ABC’s fall, while Fox’s heavy drop would have been even bigger without “The Masked Singer.” Both networks were starting from a lower base audience, making their drops less impactful.
ABC also was one of the first networks to resume production and had new episodes of “Grey’s Anatomy” and “The Conners” and a new dark crime drama called “Big Sky” to give it momentum heading into the new year.
“We didn’t go the route that many other networks did—which was to slate their fall with reruns, or turn to acquisitions,” said Ed Isabella, vice president of research for ABC. “We knew we wanted our original shows back on the air.”
Fox took a similar approach to ABC, launching with its regular Sunday night animated lineup. It did try two new shows—dramas “Next” and “Filthy Rich” that were canceled after a handful of airings. Fox was stung by a low-rated World Series as well. The success of “The Masked Singer” helped the network finish first in the key adults 18-49 demographic.
“Certain shows still catch the fascination and hearts of the audiences,” Fox’s Mr. Thorn said of the success of “The Masked Singer.”
CBS Entertainment President Kelly Kahl said in an interview that it was a “fool’s errand” to compare this fall with last fall given all the disruption.
“We acknowledge it was a rough start, but we knew it was coming,” Mr. Kahl said. Besides most shows not being ready in September and October, Mr. Kahl said the gradual return to production also made finding a scheduling rhythm a challenge. In the new year, there should be a more traditional pattern of several weeks of new episodes of a show running before a repeat appears.
If there is a financial upside to the chaos the pandemic created this season it is that the networks won’t be ordering as many scripts to develop for next season because there are plenty left from the previous pilots season.
“We’re committed to making them, which is why we rolled them into the next cycle,” said Fox’s Mr. Thorn. WSJ