Can Broadcast Executives Explain These Ratings?

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Since the current broadcast season began on September 24, News Corp’s (NASDAQ:NWSA) Fox has had 25 percent fewer viewers watching its shows live. Walt Disney’s (NYSE:DIS) ABC has seen live viewership decline by 11 percent, and CBS’s (NYSE:CBS) live viewers have fallen by 12 percent.

Contrary to what these figures suggest, throughout the third-quarter earnings season, industry executives have claimed that television viewing is higher than ever. Below-average live ratings were explained away by attributing the losses to increased digital video recorder usage and online video streaming.

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When asked about the decline in ratings during a conference call last Thursday, Disney chief executive Bob Iger said the greater penetration and usage of DVRs caused ratings to shift, and Les Moonves, the chief executive of CBS said much the same thing on his November 7 conference call. He stated: “People are watching more programming than ever, but they are increasingly timeshifting that content through the DVR streaming and video on demand.”

But the reality is that delayed viewings are declining as well.

The trend is evident throughout all these networks. According to Nielsen, Fox’s delayed views fell by 25 percent over the period, ABC’s dropped by 7 percent, and CBS’s decreased by 10 percent. The Nielsen Report foresaw the trend; in May, the Report announced that “cord-cutting” was a reality, estimating that the number of homes in the United States subscribing to a pay-TV service fell by 1.5 million, or 1.5 percent, last year.

The only network to have registered an increase this season is Comcast’s (NASDAQ:CMCSA) NBC, which is up 10 percent in live viewings and 14 percent in delayed viewings.

Analysts have been unable to explain the ratings drop so far; as Sanford C. Bernstein’s Todd Juenger told The Wall Street Journal, “It’s a bit of a head scratcher.”

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