Ronald Grover of BusinessWeek.com reports that CBS will bring in more advertising dollars than any of the other big four networks in 2009:
Everywhere you look these days, network TV executives seem to be shredding their playbooks and experimenting with their programming. The prevailing sentiment seems to be: We’ll do whatever it takes to cut costs and keep viewers tuning in. Exhibit A: Jay Leno, who has stepped out from behind his late-night desk to yuck it up on NBC during prime time.
Then there’s CBS, where it’s same old, same old. Yes, the Tiffany Network has added a Los Angeles spin-off to its military crime show NCIS, and launched The Good Wife, a ripped-from-the-headlines drama about the lawyer wife of a philandering politician. But mostly CBS is relying on sitcoms and police procedurals–the very definition of Old Media.
How is that working out for CBS? Pretty well, it seems. Three weeks into the fall season, it’s on a roll. With 12 shows in Nielsen’s top 20, including the top-rated comedy, Two and a Half Men, and its most popular drama, NCIS, CBS draws an average of 12.4 million prime-time viewers, 2.4 million more than runner-up ABC. Meanwhile, the stock has been handily outperforming those of its peers. “They’ve proven anyone wrong who thought that no matter what a network did, their audiences would continue to erode,” says Andrew Donchin, who works for the media buying agency Carat North America and helps buy ad time on CBS for such companies as Pfizer, Black & Decker, and Papa John’s International.
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Fox can still charge advertisers a hefty premium for shows like Family Guy that have built huge followings among young viewers. But CBS’s large audiences have helped it to an additional 10% or more for 30-second ads compared to earlier this year. As a result, estimates industry analyst SNL Kagan, CBS will generate $4.7 billion in advertising revenues this year, allowing it to sneak past NBC (table).
For years, CBS CEO Leslie Moonves has called advertisers’ fixation on young viewers simplistic. Now, with 18- to 49-year-old Americans among the hardest-hit casualties of the Great Recession, his theory makes more sense. As Moonves told BusinessWeek in an interview: “Someone needs to show me where an 18-year-old consumer buys more than a 50-year-old.” The question for CBS is whether big audiences of graying Americans will jazz advertisers once the economy recovers.
GROSS AD REVENUES
(BILLIONS)*
CBS $4.7
NBC 4.6
ABC 3.8
Fox 2.8
*2009 estimate
Data: SNL Kagan
Payout Perspective:
CBS may be taking some flack for sticking close to home where the scripted television is concerned, but “The Tiffany Network” is currently the only one of the major four to bet on MMA (twice) in primetime.
I did find it strange that CBS CEO Les Moonves was so dismissive of the younger demographic. While, I concede that a 50 year-old is likely to purchase more, in aggregate, than an 18 year-old, this viewpoint fails to consider the difference in expected lifetime value between a newly acquired 18 year-old customer and 50 year-old customer. It also ignores the potential difference in product margins between the average purchase of someone who is 18 and someone that’s 50.
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It’s been estimated that the upfront advertising market is down nearly 10% this year from last year. However, the figures tell us little about how much each respective network has dropped over that time period.
The most important thing to glean from the news is the size of the overall market and the relative competitive strength that CBS has in relation to the other networks. CBS’s success thus far is particularly interesting, because many thought the network was going to have a very difficult time not only in the ratings department, but financially.
Hi writer,
I just have a question that I hope you can shed some light on. This upcoming CBS event will be watched by more viewers than any other Strikeforce event has. I keep on reading comments about how an upset by Rogers will ruin the promotion similar to how Kimbo lost.
Would it necessarily be a bad thing if Fedor lost though? Rogers will become one of the most recognized and highly-ranked heavyweight in the MMA world who happens to still be under contract with Strikeforce. So instead of having only big star (i.e. Fedor), Strikeforce would end up with 2.
I didn’t write the article, Kelsey did, but imo the Kimob/Seth analogy is apt. Is Seth a big star after beating Kimbo? What Fedor has is the unbeatable aura — this guy who doesn’t look like much, basically this fat unbeatable Russian, and if Brett KOs him, it’s over. Brett might gain some level of superstardom, but unless you believe Brett’s about to go on an undefeated streak on the level of Fedor’s this past decade, a loss by Fedor on Saturday night is pretty devastating to Strikeforce not to mention M-1. All Fedor has is the invincibility. Once that’s gone, game’s over.
While Fedor does have an aura of invincibility, should he lose he still has wins over every top heavyweight out there except for the latest crop of UFC heavyweights and Couture. That should still count for something.
I don’t think any serious MMA fan is going to start passing up the chance to see Fedor just because he got caught for the _first_ time in his career. Fedor is an amazing fighter and his record is unimportant to me.
Once again, David Worlf is over simplifying the facts. The facts are that Strikeforce will be fine whether Fedor loses or not. They are not EliteXC who had everything riding on Kimbo, not to mention that Kimbo is not a legit MMA fighter. Fedor, is the best MMA fighter in the world, and has been for the pas decade, win or lose.
Sorry, no way to market Fedor to the masses as the best ever if he loses on Saturday. The “cash cow,” who until this point in time has never been anything close to such a thing, will be finished as THE person the sport revolves around.
Call it over-simplification, but watch what happens if Brett wins on Saturday night.
It’s simply the truth.
Now I never said Strikeforce was finished without Fedor. But Fedor as something unique in MMA is finished one he loses. That’s a fact, like it or not.
Ahh, I did say a Fedor loss would be “devastating to Strikeforce,” which was too strong of language.
Strikeforce isn’t going out of business without Fedor, that’s true.
But they’re not going to succeed on a national level if they can’t get him over as something special, which requires him to remain unbeaten through the remainder of his Strikeforce contract.
There has to be some consideration to the fact that Elite XC went under right after Seth beat Kimbo. There was no follow up shows and marketing to promotion Seth and see if there was any interest in him. Seth enjoyed a short popularity buzz but it died off with no promotion to promote him.
Also many people tuned in to see if Kimbo was legit. Kimbo didnt have to be the best fighter in the world. He just had to be able to hang with decent guys. Even he only claimed to be on his way to becoming the best was hyped as the next big thing. So when Seth beat him it hurt Kimbo because Seth wasnt a contender who was fighting a proven guy. Roger IMO is a overrated product from the Kimbo cloth. But if he was able to get lucky vs Fedor people would actually consider him a legit fighter because he beat someone who is proven. Noone is watching Fedor to see if he is legit. The appeal with Fedor is to tune in to see the best. If he loses you have to gain some respect for Rogers.
In the end the 2 fighters are very different and what will happen in the event of a Fedor loss is unknown. We really have no way to known how fans, mainstream and hardcore alike, will react to a Fedor loss.
I think it is clear that Fedor will lose stock if he lose. But so what? He will be 30-2 and skillwise still best HW fighter in the business. Of course, for his next fight, he probably won’t be a headliner material, but 2-3 wins in HW division later? Again a star. And moreover, star with some highlight reel. (biggest problem for Fedor is, that he doesn’t have rights to majority of his previous fights…). You need to show people Randleman fight just once and they will understand what is so special about Fedor 🙂
On the other hand, Rogers will become a star, should he win over Fedor. BTW: I think, that Strikeforce HW division gotten pretty interesting lately. And I must actually say, that stylewise, I would favor Fedor, Alistair and even Antonio Silva should they face Brock one day… 🙂 They are simply pretty bad matchups for him 🙂
The problem with Fedor is that he is not highly marketable. He is the greatest MMA fighter of all time, but that means very little in business terms, and if you like MMA the business side matters.
He is a pudgy Russian good boy from a small town that nobody outside of a 50 mile radius has every heard of, and he doesn’t speak english (not much anyway).
He is only well known among hardcore MMA fans, and is barely on the radar screen for the bulk of people who actually spend money on MMA.
Now of course, he is my favorite fighter, and I exaggerate, but just a little.
But the fact remains, that he is not highly marketable, and not with an org that can properly market him. If he loses then that hurts them big time, and he can kiss big money in the USA goodbye.