What goes up must come down. After several years of steady viewership growth, cable has experienced a significant drop in ratings. Across national cable television networks ratings tumbled nine percent in 2014, triple the decline seen in 2013. To call it a crisis is an understatement. Cable viewership was down across every category, with some categories seeing double-digit declines. News networks, on average, were down nine percent compared to 2013, while movie channels were down seven percent. Even sports, typically DVR proof, dropped five percent. But it was entertainment and kids’ networks that saw the biggest drops, falling 11 percent and 10 percent respectively. For years, entertainment networks relied on a steady stream of reality shows, which are cheap to produce and popular with audiences. But even these types of shows are fading. On A&E, viewers lost interest in former hits like “Duck Dynasty” and “Storage Wars,” which saw their ratings plummet 50 percent and 46 percent respectively.  This according to Michael Nathanson of MoffettNathanson LLC.

Even the most established networks – USA, TNT, TBS, A&E, Lifetime, MTV, Discovery, FX, ABC Family, and others – are starting to grapple with the issues of audience erosion. Nathanson says further that double-digit drop-offs at the conglomerates that own some of the biggest portfolios of channels, “The ratings declines at most of the cable networks were nothing short of staggering.”

The big question is how is this effecting the way national advertisers are spending their money with cable.

The Cabletelevision Advertising Bureau reported that cable’s upfront advertising haul slid six percent in 2014, the first drop in four years. According to Michael Nathanson of MoffettNathanson Research, when networks have bad ratings they often don’t have the inventory [of ratings points] to sell. Advertisers spend money looking for viewers, and less viewers mean that the price per viewer will go up. On a local level it comes down to audience delivery and efficiencies of programming. If cable shows are efficient and can deliver ratings to achieve the cost per point goals set prior to the campaign, then they are purchased. On the cable side (or any media) it still comes down to supply and demand. If the stations are in, or close to, a sold out situation, then the rates are high. If media buyers have room to negotiate because inventory is not so tight, then the advertisers benefit. However, even if the inventory is open, resulting in rates being lower if the ratings are also lower, the efficiencies will not be there, resulting in these shows not being purchased.

We don’t have a predetermined notion that we are NOT going to buy cable because the ratings have decreased. The goal for any and all campaigns for clients is to reach our target as efficiently and effectively as possible. That may mean buying cable primarily or not at all for a campaign.

From many of the trends emerging it seems that the cable ratings will continue to decrease due to a variety of reasons including cord cutting, time-shifting shows, and Netflix to name a few. But, cable will still be considered a viable option for most clients’ campaigns and will still be held to the same standards as broadcast to deliver what is best for our clients’ overall campaign goals.

Trish Wiest
Media Director