Fragmented Audiences Lead to Big Changes for Cable TV Networks

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Cable television channels have had a proven formula that has worked for years.

They purchase licensing rights for proven shows on broadcast networks, and then watch the viewers – and advertising dollars – roll in. It was a low-risk, high-reward model for cable networks and media buyers alike. But the writing is on the wall – the formula is not working anymore.

What’s different? It’s all the result of audience fragmenting. With an increasing number of choices in entertainment, including online video networks, broadcast networks are having a hard time developing and establishing hit shows. Just 29% of broadcast TV shows in 2013 were renewed for a second season. The bad news runs downstream, and cable television channels are stuck with few guaranteed ratings winners in the syndication market. Early cancellation takes many shows out of contention for syndication because cable networks look for shows with 90 to 100 episodes.

However, some longer-running shows may not bring in the expected audiences. For example, TBS paid handsomely for the rerun rights for the CBS comedy “2 Broke Girls” and expected it to bring in the same kind of audience that they’d seen from airing CBS’s “The Big Bang Theory” reruns. However, the former show has shrunk its audience by 20% since initially airing, so TBS is left with rights to a show that may not be that profitable to air.

Who suffers most? TBS, TNT and USA are going suffer the most from the changes in the market. All three channels have relied on reruns of mass-market shows from the broadcast networks. These cable networks can’t continue to pay large sums for reruns that won’t bring in an audience, because media buyers won’t want to advertise on these shows.

Their only option is to turn to original programming, but that carries a risk as well. While some cable channels have managed to produce quality original programming, most are hoping that the broadcast channels will rediscover the magic that brings in audiences.

 

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