On Monday, The New York Times ran an article titled "NBC Struggles for Its Footing" (by Bill Carter and Brian Stelter) on page one of its business section. I doubt that Brian Williams will report anything from this article anytime soon on Nightly News, since he makes it a point never to report bad news about NBC. This is fascinating stuff, so I thought it was worth reprinting:
Coming into a new television season, about the only solace for the new management regime at NBC was that the network’s prime-time fortunes had been so bad for so long, things could not get much worse.
Oh yes they could — and they have. In a year in which NBC’s new corporate owner, Comcast significantly increased the budget for fall shows, the ratings have continued to slide even as competitors have had success.
How bad are NBC’s prime-time ratings? Bad enough that most of the hours on NBC’s schedule, other than the potent “Sunday Night Football” package, have regressed in ratings this season. While every other network has generated a new hit, NBC, which needs hits the most, has not.
The already fourth-place rating in the financially crucial area of viewers ages 18 to 49 has dropped on average 11 percent, to a 2.5 (3.1 million) this year, from 2.8 (3.57 million viewers) last year. NBC has also lost more than 800,000 total viewers from last season. Several new shows never got off the ground, like “The Playboy Club” and “Free Agents,” both of which have been canceled.
It’s bad enough that without the big ratings supplied by the N.F.L. (which costs NBC more than $600 million a year to buy) NBC would be struggling to stay out of fifth place in the ratings. Without football, NBC is now tied with the Spanish-language network Univision in those 18-49 ratings.
To make the grim matters even worse, the only prime-time shows NBC previously owned that posted consistently good numbers, the comedy “The Office,” the drama “Law & Order: Special Victims Unit” and the reality show “The Biggest Loser” are all down significantly this season. Not coincidentally, important cast members have left all three shows.
NBC was not the crown jewel in Comcast’s $13.75 billion purchase of NBC Universal early this year, but there were hopes inside the company and among investors that the new owners might begin to revive the once-mighty network’s moribund prime-time schedule and attract more ad dollars.
So far at least, the opposite has happened. In September, the new chief executive of NBC, Stephen B. Burke, told a media conference in California, “No network has ever been as far behind financially as NBC is,” citing prices for prime-time commercials that are consistently 20 percent less than what its competitors can charge advertisers.
Comcast’s chief executive, Brian L. Roberts, did not even mention the network on Comcast’s earnings call with investors last week. Instead he raved about the health of the NBC Universal cable channels, which drive the profitability of the division. Those cable assets increased revenues by 12 percent, to $2.1 billion.
Robert Seidman, the co-editor of TV by the Numbers, a ratings Web site, said Comcast “knew what it was buying and knew what it was getting with the broadcast network.”
But the network Comcast bought had several pillars outside of prime time — the “Today” show, “The Tonight Show” and “Nightly News” — that had weathered the storm. Lately, there have been concerns inside the network that even those stalwarts might finally be subject to fallout from prime time’s underperformance. One senior news executive, who asked not to be identified commenting on the entertainment division, said, “Prime time is painful.”
But for the moment at least, those concerns are more about shrinking leads over competitors than shrinking audiences. “Today,” which hasn’t lost a week in the ratings in almost 16 years, has maintained its audience (even adding to it slightly) this season, though the No. 2 show, ABC’s “Good Morning America” had added more viewers and closed what was once a yawning gap to just a sizable one. ABC has also inched closer in the evening news ratings, though NBC has added viewers to that top-rated program as well.
In late night, which traditionally has a closer relationship to prime-time ratings, some impact is noticeable. “The Tonight Show” with Jay Leno, which enjoyed more than 15 years of dominance over CBS’s “Late Show With David Letterman” (not counting the period of upheaval when Conan O’Brien replaced Mr. Leno), has fallen behind CBS four weeks out of the first six this season in those 18-49 ratings — the first time that has happened since 1994.
Of course, Mr. Leno was infamously exiled for a time to the 10 p.m. hour where his show was pummeled — particularly by NBC’s own affiliates — for low ratings. But this year two new NBC 10 p.m. shows have fared even worse. The Monday drama “The Playboy Club” was an instant flop. A new entry on Thursday, “Prime Suspect,” has been more highly regarded and is still on the air, but last week averaged a puny 1.2 rating (about 1.5 million viewers in the 18-49 group).
NBC’s new leadership made clear internally that the rebuilding process would take time and that extreme patience would be required. One senior NBC executive, who asked not be identified discussing the network’s internal strategy, said, without disclosing specific figures, that the budget for developing new shows was significantly increased last spring, to the same levels as the other networks, after years of cutbacks. (NBC’s previous owner, General Electric, had pared budgets in preparation for selling the company.)
Mr. Burke has been stressing patience through the dismal start of this season, the senior executive said, and has told people his chief job now “is to keep everybody in the company from driving the development people crazy” in expecting some kind of quick turnaround.
One sign of the patience NBC is trying to apply was the decision to withhold from the fall the one breakthrough show it has programmed in the past five years, the singing competition “The Voice.” Some NBC executives have conceded they urged the new programming chief, Bob Greenblatt, to rush that show back on the air in September after its success in the spring and summer.
He resisted, both because the show needed more time to find suitable contestants, and because holding it back meant it could be reintroduced in February, when NBC broadcasts the Super Bowl. For the same reason NBC held back its most anticipated pilot, a drama about the making of a Broadway show called “Smash,” hoping to pair it with “The Voice” this winter.
But NBC has done little to help itself this fall — and it has been a very good fall for its competitors. Both Fox and CBS are up in the ratings this fall and ABC is flat, an unusual development in a business where erosion has become a way of life. All three of the others have also added at least one significant new hit, while NBC’s best offerings have been a modestly rated but promising comedy “Up All Night,” and the horror drama “Grimm.”
Still, program executives who have been in NBC’s position — if not quite as far down — endorse the idea that a comeback is still possible. Warren Littlefield, who was at NBC during two previous down cycles, said of the potential for a revival, “I do think it’s possible. Last year ‘The Voice’ had a significant effect on their performance each week in ratings and revenue. They just have so many holes to fill and not enough arrows in their quiver.”
Susan Lyne, now chairwoman of the Gilt Groupe, the online luxury retailer, recalled being almost exactly where NBC is now when she was president of ABC Entertainment, starting in 2002.
Ms. Lyne said NBC can’t possibly hope to revive by making wholesale changes.
“The mistake I made my first season was thinking, ‘I’ve got so many time periods that are a disaster, I need eight shows,’ ” Ms. Lyne said in a telephone interview. “And you just can’t launch that much. In our second development season we said the name of the game here is: one hit. Get something that is going to be appointment programming so you begin to get people back into the nest.”
Ms. Lyne, who was working at the time with Lloyd Braun, managed to develop three huge hits the next season, and ABC was on its way back. Her advice to NBC: Pay attention to what cable networks do.
“They launch a show, one show,” she said. She acknowledged that the challenge is made much harder because more and more people use DVRs and access shows on Hulu or Netflix or other sources.
“You find that one piece of programming and you stick with it,” Ms. Lyne said. “You make sure it’s good, that you genuinely believe in it, and you just keep running it until it finds an audience. Once you’ve got that building block, you keep adding to it.”