Everyone's Watching Less Network TV: Guess What They're Doing Instead
Prime time isn't what it used to be.
Fresh data from ratings tracker Nielsen shows an alarming drop in television viewership. ABC, Fox, CBS and NBC have combined for a 9 percent drop in viewers in the coveted 18-to-49 age bracket since the fall season began on Sept. 24.
Media executives are worried, and rightfully so. Only Comcast's (CMCSA) NBC is better off than where it was a year ago, up a sharp 23 percent. However, it's hard for NBC to celebrate when Disney's (DIS) ABC is down 7 percent, CBS (CBS) is off by 18 percent, and News Corp.'s (NWS) Fox is down by a brutal 26%.
If there are fewer folks tuning in to network television, that will make it that much harder for NBC to sustain its gains in the future.
Cable and DVRs and Facebook, Oh My
There are some reasonable explanations behind the drop, and that's before debating the actual quality of the shows that the four major networks are airing these days.
Let's start with cable networks.
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All the shows generating any kind of buzz -- "Walking Dead," "Breaking Bad," "American Horror Story" -- are on cable networks, where they can get away with the edgier programming that traditional broadcasters can't. Then we get to the premium movie channels that have evolved into hubs of high-end programming including "Homeland," "Boardwalk Empire," and "Game of Thrones."
It's hard for the over-the-air commercial networks to compete, so perhaps it's no wonder that they have resorted to costly sports programming or filling their schedules with reality shows that are cheaper to produce than another watered-down sitcom or drama.
DVRs, on-demand viewing, and online streams have also spread out the way that we consume conventional prime-time programming.
World Wide Web Watching
What about all of the time that folks spend online? Facebook (FB) now has a billion active users, and more than half of them are spending time on the site on any given day. Time spent strolling through friend status updates or following links to viral videos is entertainment.
Netflix (NFLX) could be an even bigger problem. The leading video service is now serving up more than a billion hours of content a month. It can't all be incremental. Some of it has to come at the expense of traditional TV consumption.
It won't be easy for the four major networks to win back the viewers that they're losing. The trends are real, and they may not be reversible.
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Motley Fool contributor Rick Munarriz does not own shares in any of the stocks in this article except for Netflix. The Motley Fool owns shares of Facebook, Netflix, and Walt Disney. The Motley Fool has bought calls on Facebook. Motley Fool newsletter services have recommended buying shares of Facebook, Walt Disney, and Netflix and creating a bear put ladder position in Netflix.
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