Dreaming out loud: saving the Nielsen ratings challenged fan favorites

Categories: Thoughts

Written By

March 14th, 2009

There are all kinds of nonproductive approaches to saving fan favorites that are Nielsen ratings challenged. People dream all the time.  They dream that because they believe that Nielsen is an antiquated system, the ratings aren't accurate and shouldn't matter.  One way or the other, for now, they're dreaming.  When it comes to that kind of dreaming I'd prefer to save it for some alternate universe where Gisele Bundchen can't tell the difference between me and Tom Brady.

I wanted to at least take a crack at something that at least  potentially was a more productive approach.  It may wind up as unproductive as thinking about an alternate reality where Gisele can't tell the difference between me and Tom Brady, but no harm in trying.

This is a rough draft/thinking out loud on the Internet type of deal.  It's definitely very high level, very pie-in-the-sky, with many  flimsy arguments that are easily blown aside.  Indeed, there are already many holes and unresolved issues, but feel free to shoot more.  If enough of the holes can't be plugged, it's not viable anyway.

I'm not sure it's possible to plug all the holes, but I'm not yet sure it isn't.  If they can be plugged, it could possibly be framework that accomplishes two things.  It would actually save some fan favorites, and it would also be an economically viable alternative for the studios making the shows.  If the studios can't be sold on the idea, it's DOA.  Which means it's probably DOA, because most or all of the studios would need to participate in order for it to work.

A  journey of 10,000 miles begins with a single 10,000 words

Beyond the desire to save shows, I truly believe that when you have 7 million people who like something (or really even 6 million, 5 million and  yes, even four million) you have something that has a huge value.  It may not be of value to, or make sense for, the broadcast networks, but there is still value.

The underlying premise (which is possibly wrong) is that there is a lot of value in brands with that kind of scale. Not enough value for the broadcast nets though and not necessarily because those shows can't be profitable, but because of the squandered opportunity costs.  Keeping a show that draws 5 or 6 million takes a slot away from a show that could draw 12 million.   I'm working from the premise that just because it doesn't make sense for the broadcast networks, doesn't necessarily mean it can't make sense anywhere.

While there is no doubt in my mind that a show with 7 million viewers has value, it's not lost on me that if you move that show off the broadcast networks to another network, it will lose a good chunk of the viewers, and the trick becomes how to get value once that happens.

Nobody Does Scale like TV

I'm going to spend a lot of lines on my fascination with scale.  And if you already well appreciate the enormous scale television has, I'd skip this section and scroll to the next.  I appreciate things with large scale, and it's one of the reasons that the TV business interests me, particularly the broadcast networks that still can somewhat regularly (thanks to American Idol and Dancing with the Stars)  reach more than 20 million average viewers.  Some networks have adjusted expectations ( we're looking at you, NBC), but a show like Life or even Chuck which is seemingly on the bubble for renewal, still generate  relatively massive scale. And as long as we're speaking relatively, that's true even among 18-49 year olds.

With a 2.1 final adults 18-49 Nielsen ratings last  Monday night (final ratings), NBC's Chuck averaged around 2.77 million 18-49 year olds for the hour.   Many more than that watched some of the show and there were more people who even saw all of the show actually.  People who flip the channel after the credits start to roll and don't wind up watching the last minute or two of the hour don't count for the whole hour.  When you (yes you, the one person who reads our blog that is in a Nielsen family!) change the channel for a few minutes during commercials and then change back, the time you were away isn't counted either.

Averaging 2.77 million 18-49 year olds in an ONE SINGLE HOUR isn't an easy feat anywhere other than television.  Our web site has been up almost every minute of every day since the middle of September 2007 (minus what probably adds up to about a whole day of downtime).  So we've been around roughly THIRTEEN THOUSAND hours.  According to Google Analytics, we still haven't reached 2.77 million unique visitors.  We're at 2.67 million and that includes the under 18 and over 50 crowd too.  Our trend is  good though (1.85M out of the 2.67M were in the last six months).

I'm not saying it's reasonable to compare a niche web site with no marketing budget to a television show on broadcast television.  Of course it isn't.  I am just trying to illustrate the scale.  It took us almost 13,000 hours to reach less total viewers, often, for less than one minute, than Chuck was able to average in one hour with just the 18-49 year olds.   On an engagement basis, Monday's Chuck had ~166 million minutes of engagement with 18-49 year olds.  In our 13,000 hours of existence we've had 8.4 million minutes of engagement.   One hour of Chuck had 158 million more minutes of engagement with 18-49 year olds than our 13,000ish hours of existence had among all ages.

I'm not honestly sure that Google, the biggest site on the Internet, even with Youtube, Gmail, Google News etc, thrown in bests Chuck in terms of total engagement with 18-49 year olds at 8pm on Mondays.   Even shows sitting on the bubble have epic scale compared to practically anything else.  Unfortunately the practically anything else also includes shows on other networks (and especially shows on their own networks) that have even more scale.

When American Idol averages nearly 27 million as it did Tuesday night from 9pm-10pm,  we're talking 1.6 billion minutes and nearly half of that or 800 million minutes were in the coveted 18-49 demographic.  I am feeling very comfortable that Google, the biggest deal on the Internet, didn't have anywhere near that level of engagement for the hour.  We're talking truly epic relative scale.

The Castoff Network

As architected currently, the  "Castoff Network" is available on cable/satellite.   I know it will need a much better name if it is ever to see the light of day.  I like the BCAST Network for a lot of reasons, but it's way too early to spin out into a naming discussion.  I am using the term Castoff to be light, and not  pejorative. The whole reason for this network again is because I believe there must be value in these shows, and the brands and followings they have created even if the shows don't make sense for the broadcast networks

Sure, some will say it's like The Land of the Misfit Toys from Rudolph the Red-nosed  Reindeer, only for TV shows.   But that's ok,  on the Christmas special version, the conclusion is there is value to the misfits.

The biggest obstacle may be that in my proposed model, ABC, CBS, FOX and NBC all need to participate.  The Castoff Network is a joint venture between all of them.  That's tough right out of the gate.  And it's even tougher because really the necessary model probably is to have all the studios participate rather than the networks. For discussion purposes, I'm sticking with the network model simply because it's easier to talk about in those terms.

What's Our Business Model?

I don't think it's impossible, but it would be a tough challenge and could not likely be launched in the current environment because the network would need some runway. The business model is a mix of subscription revenue and advertising.  Not unlike some cable channels, except it would be a for fee service on top of basic cable.

YES,  FEE MEANS IT'S NOT FREE

I see it as a subscription cable channel like HBO.  Only it costs less.  I'd propose $6/mo., with the cable/satellite operators getting some of it (say $1).  But this is potentially another big hole because Comcast, Time Warner and DirecTV may laugh hysterically at the notion of only getting ~17%.   But in the example I'm using, in order to  be viable it  would probably need to attract at least  5 million subscribers.  That's harder than getting 5 million people to watch Chuck on NBC, for sure.  But it is doable (see below in If Showtime can do it...).   But I'm not sure how quickly in the best case scenario 5 million could be achieved.

I REPEAT.  IT IS NOT A FREE CHANNEL.  As modeled above, it's less than $1.50 a week though.  Less than a single cup of the smallest (Tall) coffee Starbucks has to offer.  If you're not willing to pay that's fine but you shouldn't ever get mad at the networks for pulling the plug on your shows.

Fans are not entitled to be provided with free entertainment on broadcast television just because they like a show, even though many are operating under the misguided notion that they are entitled. Almost every show attracts a following, and it is indeed unfortunate that every show that does that doesn't wind up making sense for the broadcast nets.  But it is inevitable that not all will make sense.  That is a reality that many fans do not accept, and some fans don't even consider.  But that doesn't change the reality of it.

It's fine to be disappointed when a show is canceled and it's fine to care about a show enough to be willing to be pay for it.  You're absolutely entitled to disappointment even if you're not willing to pay.  But if you're not willing to pay, you are not entitled to indignation!  When it comes to indignation, you have to pay up or shut up.  Less than a cup of the smallest cup of Starbucks coffee per week!  Come on, suck it up.

If you aren't willing to pay a $1.50 per week you're not entitled to any indignation.  But even those who will whine but not pay up should also root for the network to succeed anyway!   It will allow you to buy (or pirate) your favorite shows in other venues be it DVD, or iTunes.

I don't see free web streaming access in the cards for years for the Castoff Network, so, sorry Hulu fans!

C'mon, how can the Castoff Network be worth $6/mo!?!

I can't really tell you what I actually pay for the premium channels I have because I'm in weird bundles.  But the list price on HBO and Showtime is $18.99 per month (technically in my bundle I think I am getting HBO for free currently, but am paying full freight for Showtime, $18.99!!).

On Showtime I watch Weeds, Californication, Dexter, and lately US of Tara.  One of these days I'll get around to checking out The Tudors.  I almost never watch Showtime for movies and don't think of it as a movie channel. Other than the shows I listed, I don't watch anything else.   Yes, I know, I need to cancel Showtime because it's costing me much more to watch the shows I watch than it would to buy the DVDs.  But that idiots like me exist make me more optimistic about the ability for the Castoff Network to attract subscribers at $6/mo.

I'd very likely watch just as many shows on the Castoff Network and as modeled, it would cost less than 1/4rd.

If Showtime can do it...

And before you say, "there's NO no way could you get 5 million people to pay $6/mo. for the Castoff Network,  Nielsen estimates there are over 19 million subscribers to Showtime.   I'm sure they're not all idiots like I am who are paying $18.99 a month, but I'd guess there are 19 million homes averaging more than $6. But then again, Showtime had a long, long time to grow to that many subscribers.

Showtime needs to be more expensive because it doesn't have advertising.   I'm not sure if this means we need to raise the subscription fee of the Castoff Network to $9 or $10 or whether Showtime is very overpriced for what it offers.

The Castoff Network launches!

Each of the networks would pick 3 one hour shows that are not being renewed by the network to send to the  Castoff Network.   There are no 30 minute comedies or unscripted shows in the Monday-Thursday prime-time lineup of the Castoff Network, just 1 hour scripted shows. The way that would work in the first year (using this year's castoffs) is something like (pick 3):

NBC: Life, Lipstick Jungle, Knight Rider, My Own Worst Enemy, potentially FNL (I'm leaving Chuck out in hopes it wouldn't be sent to the Castoff Network!)

ABC:  Eli Stone, Pushing Daisies, Dirty Sexy Money, Life on Mars

Some immediate holes appear.  Unless they brought back Prison Break for another season, FOX, which programs fewer hours, only has two potential shows to send to the Castoff Network (Terminator: The Sarah Connor Chronicles and Dollhouse).  Or FOX could wheel and deal and send only two allowing NBC to send another show (and they'd have to figure out how to pay FOX for that).

CBS might have zero shows it would want to send.  It has shows it will cancel, sure, but since for the Mon-Thursday primetime block there are only one hour scripted shows with no comedy or reality, and since some of the shows CBS will cancel may be long in tooth and hard to produce cheaply... Well, they might have to go back a year and resurrect Jericho, Moonlight and Cane (or Swingtown - hey, we're on cable now!).  Can you imagine!?  I can't, but still fun to think about.

What do we do in year two?

Launching the home for castoff shows was relatively easy compared to what happens the following year.  The second season would be much trickier.  Perhaps ultimately more complex than figuring out the Alternative Minimum Tax (AMT) though I'm guessing way less people are affected by that these days.  I haven't come up with a perfect system or even a reasonable system yet for handling the scheduling in the second year.

In year two, you have NEW castoffs from the broadcast networks, but you also must (hopefully) have some relative Castoff Network hits.  You can't clean the slate every year because if it's just the "One More Year of Slow and Painful Death for your show Network" I don't think it can gain any traction.  A Terminator: The Sarah Connor Chronicles fan who had at least the illusion of a multi-year run will be much more willing to pay than a fan who knows the show has only one more year.

Unfortunately my bias is probably to create scenarios that would cause the most focus on ratings and do things like automatically cancel the lowest rated show in each time slot.  The 8pm Monday show fans will scream bloody hell at that approach, but it would make for some interesting analysis.  Ultimately though I think a reasonable system for dealing with each year's castoffs could be accommodated.

Overly Simplistic Look at the Economics

The model of  $6/mo. subscriptions with $5 of it going to the Castoff Net produces $300 million annually.  In order to produce 20 episodes of all twelve Castoff Network shows at a cost of $2 million/episode, we also need to somehow sell $180 million worth of advertising  just to break even on the production of those shows.

The extra $180 million seems in the realm of very doable even within new airings of the Monday through Thursday primetime episodes.  It would work out somewhere around $20,000.  It could (and would) be argued that advertising to people who were willing to pay $6/mo. extra and still see advertising come at a premium rate.

But these back of the envelope numbers only get me to break even on what I'm paying for shows.  I'd have to sell  more advertising to pay for the Castoff Network staff and have a marketing budget.  This also assumes an immediate ramp-up to 5 million subscribers, and in real life it wouldn't happen like that.

240 down, 8,520 to go

The good news is there is a lot of opportunity for selling additional advertising space.  The bad news?  Well, I've taken care of programming the Monday through Thursday 8pm-11pm prime-time slot for 20 weeks out of the year or 240 hours out of the 8,760 hours a year I have to program.   And like the CW, I didn't really figure out Sunday, or Friday and I have no affiliates (and I'm thrilled about that) to give back Saturdays to, and that's. Just prime-time.

There's still 8,520 hours to sort out and probably 8,520 things to sort out on top of that.  But sorting all of that out will seem like a day at the beach once we've sorted out how the heck can we get all the studios to agree to participate.

For the 12 of you who read down this far thanks!  Now feel free to get out your guns and start shooting holes, or better still, feel free to start plugging the holes.

 
© 2014 Tribune Digital Ventures