Will ratings win mean big bucks?


April 16, 1992|By David Zurawik | David Zurawik,CBS Research/STAFF GRAPHICTelevision Critic

Last July, Warren Littlefield, the president of top-rated NBC Entertainment, was asked for his reaction to predictions by CBS executives that CBS would go from last to first in ratings during the 1991-92 TV season.

"We are launching an investigation into their drinking water and trying to ascertain where they came up with this," Littlefield said laughingly.

This week, CBS executives were the ones doing the laughing.

And they were drinking champagne instead of water, as the close of the traditional 30-week season found them atop the prime-time ratings heap for the first time since the 1984-'85 season and possibly poised for a profit after losing $98.7 million last year. Yesterday, CBS said its loss narrowed substantially from a year ago, but declined to say by how much.

CBS should feel good about the win. But the question is how good. How did the network win and what does it mean for the future? A close look at the performance of CBS and its competitors in prime time this year, shows two things: The win was a great victory in terms of image and savvy management, but it could be a hollow one in terms of real money unless its momentum is sustained.

More and more, the secret to understanding network TV is to follow the money. And the irony of this year's ratings race is that while CBS finished first and ABC finished last, ABC was the only network to earn a profit for the 1991 portion of the 1991-'92 season.

As for the projection of profits into the upcoming fall season from CBS Chairman Laurence A. Tisch, that might well be more smoke-and-mirrors than reality. Tisch was pouring the champagne at a New York press conference this week in the hope of making CBS look like the place to spend next fall's advertising budget. While a first-place finish overall will surely mean some extra advertising revenue for next season, most TV buys these days are made on demographics, not household ratings. Further, CBS has to go a ways to make up for on-going losses, like the one it sustained when it paid $1.1 billion for the rights for major league baseball.

Bob Iger, president of ABC Entertainment, says the way ABC made money while finishing last is simple: "Every sale we make is based on demographics."

What that means is that as the number of viewing options expanded in the 1980s, narrowcasting or niche programming became the name of the smart-money game. And, in recent years, ABC has started going for shows that might not get large overall ratings, but would attract a specific demographic group that appealed to advertisers.

"Doogie Howser, M.D." is such a show. It's rarely in the top 20 overall in Nielsen ratings, but it is the third highest rated sitcom on TV with adults 18 to 49. In fact, virtually all of ABC's selling to advertising agencies is done under the banner of "ABC: No. 1 among young, upscale adults."

Marcellus Alexander, the vice president and general manager of WJZ-TV (Channel 13), Baltimore's most financially successful station and the local ABC affiliate, says there's no question about it: "Television is a demo-driven business. Households [the measurement of overall ratings] don't watch television -- people do." To measure success, you have to understand how a station or network is doing "relative to their simple business strategy."

The most simple strategy is, of course, making money. But a couple of years ago, CBS executives were more concerned with taking some drastic steps just to stop losing so much money so that the new owner, Tisch, didn't decide to sell CBS off in chunks and turn out the lights on what was once known as the "Tiffany of networks."

As part of that effort, early in 1990, Broadcast Group President Howard Stringer fired Kim LeMasters as president of CBS Entertainment and brought in Jeff Sagansky, a Harvard MBA who had been one of Brandon Tartikoff's programming lieutenants at NBC. Stringer said he was tired of seeing every reference to CBS in print followed by a comma and the phrase "mired in last place."

Sagansky's main job was to get CBS out of last place fast or at least make the network competitive in prime time. And he did make it competitive during the 1990-'91 season.

Last year at this time, CBS was in third place. But only .4 of a ratings point separated it from first-place NBC. Sagansky didn't have enough time to develop new series, but he did some savvy programming with one-shot event shows during "sweeps" ratings periods -- "The Mary Tyler Moore Reunion," retrospectives of "The Ed Sullivan Show" and lots of made-for-TV movies.

Sagansky's brilliant "stunt" programming was even more brilliant this year. But he had more to be brilliant with. And, while such programming played a major role in this year's win, it also raises doubts about how CBS will do next year.

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