Demographics will be the death of broadcast television

Old woman watching television at her home

With all but one week of it completed, NBC came in first in the 2013-14 television season’s Nielsen ratings for 18-49-year-old adults, Variety reported September 17. But while the network may feel proud as a peacock about that, it’s really nothing to crow about. Although NBC’s position relative to other broadcasters has improved, television as a whole has markedly declined since 2004 – the last time the network topped the Nielsens.

For the broadcast year just ending, NBC averaged 8.27 million total viewers. Ten years ago, the last time NBC was number one, viewership was over twice that. 2004’s top-rated show, Fox’s American Idol, drew between 16.1 and 16.6 million viewers. NBC’s two shows in the top ten each drew over 12 million. And that was just for the 18-49 segment, not total audience.

The reason, says Cecilia Kang in the Washington Post, is demographics. 

America’s population is aging overall, and television viewers are aging faster than the general population. The most recent census showed that US median age was 37.2. But the median cable or broadcast television viewer was 44.4 years old. “Audiences for the major broadcast network shows are much older and aging even faster, with a median age of 53.9 years old, up 7 percent from four years ago,” Kang writes. For CBS, which airs, among other shows, the top-rated NCIS, it’s 58.7.

This is both a short-term blessing and a long-term curse.

It’s a blessing because aging Baby Boomers are still the nation’s largest demographic cohort, and television – particularly the alphabet networks – still gets a healthy share of them. And it’s a curse because when they go, younger audiences aren’t going to replace them.

That’s because different age groups have different ways of watching.

Boomers grew up with “live” watching – i.e., watching shows at their scheduled air times – because before computers, before TiVos, before even VCRs, there was no other way.  But for younger audiences blessed with newer technology, says Kang, “control over when and where they watch has driven the trend away from traditional television. Live television viewing was down 13 percent for all ages except for viewers 55 years and older, who are steadily watching their shows at their scheduled broadcast time.”

“The shift in demographic viewing is caused by a combination of factors ranging from lower TV penetration rates of under-25 year old households to increasing use of time-shifting technologies in most under-55 year old households,” media analyst Michael Nathanson of Moffett Nathanson Research explains.

As a result, traditional broadcasting is facing new forms of competition. Hulu, Vice and Netflix stream television shows, and Netflix has been producing its own multi-season blockbuster series. Traditional content producers are now in process of setting up their own cloud-based internet services. “Disney and 21st Century Fox are in discussions for deals with Sony Entertainment for its new cloud-based Internet TV service,” MediaPost reports, and “Discovery Communications, Time Warner and Starz were also in discussions with Sony.” Viacom will carry their programming on 22 of its networks, and Dish Network has already made deals with some of the Disney-ABC networks (including ESPN). Verizon, too, will be getting into the act in 2015, having bought TV internet service technology from Intel Media.

CBS, on the other hand, would rather join the competition than try to beat it. Unlike other networks, they own the rights to their shows and make a fortune distributing them worldwide both digitally and on cable. “NCIS, one of TV’s most popular shows, is considered a billion dollar franchise,” Kang explains, “because it is viewed in dozens of countries, has a younger audience online, and gets money from cable licenses.”

All of this has a big potential impact on advertisers’ media-buying decisions. If you’re selling Viagra and other prescription meds, retirement-community homes, cruises or other products and services for older consumers, you’re going to gravitate to broadcast, and secondarily cable, television, as many advertisers in those categories already have.

But if you’re after a younger audience – say, broadcast’s traditionally premium 18-49 demographic segment – you’re going to spend your ad dollars digitally.


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