With the launch of the 2018-19 Nielsen season just days away, each of the Big Four broadcasters is somewhere between transition and utter disarray.
At CBS, the departure of CEO Leslie Moonves amid sexual harassment and assault allegations has shaken the network’s foundation — a foundation already jostled by a legal showdown between Moonves and controlling shareholder Shari Redstone over a possible shotgun merger with Viacom. ABC and Fox Broadcasting both face imminent, existential change caused by the pending megadeal between their two parent companies. And NBC, now the most dominant broadcaster by almost any ratings measure, is navigating upper-level transition as its parent company mulls potential big moves.
The collective chaos comes as broadcasters face more pressure than ever from declining ratings, digital competition and shifting ad dollars. The networks that have long been the apples of their corporate parents’ eyes now face a diminution of status and are struggling to adapt their programming strategies in response.
“All of this disruption is now impacting the four networks at a corporate level,” says media consultant Brad Adgate.
The pressure being felt by broadcasters was on full display in May at the upfronts. There, NBCUniversal CEO Steve Burke and ad sales chief Linda Yaccarino set the tone at the beginning of the week with multiple digs at digital platforms such as YouTube and Facebook, which each year are drawing more and more of the advertising dollars that had in the past gone primarily to the broadcast networks.
Despite a more robust than expected upfront ad market this year, the trend lines for broadcast are not pointing up. From 2012 to 2017, Nielsen’s measure of average percentage of people ages 18-34 using television has declined from 16.1% to 10.5%. The drop-off was most severe among teenagers. The only growth has come in people ages 50 and up and 65 and up.
The declines can be largely attributed to shifts toward digital viewing, particularly among younger viewers, as well as to audience fragmentation stoked by digital competition. The turmoil that each of the Big Four must deal with as the new season kicks off is largely due to how each network’s corporate parent has responded to the digital challenge.
“All of the moves are to keep up with Netflix and Google and Facebook,” Adgate says. “These moves are all in response to trying to keep scalability.”
Even before Moonves went to war with Redstone, it appeared increasingly likely CBS would either buy or be bought as its competitors began scrambling to acquire the scale to compete with Netflix. The effect of those deals is already being felt at a programming level — particularly Disney’s planned acquisition of the bulk of 21st Century Fox, which is designed to pump content to the two streaming services Disney plans to launch next year. As recently as 2016, ABC Entertainment president Channing Dungey had been touting conversations with corporate sibling Lucasfilm about a possible “Star Wars” series. That series is now slated to happen — on Disney’s direct-to-consumer service.
Speaking to Variety in August, Dungey denied that the streaming service had become an internal competitor. “They’ve not yet started to make as big a push into comedy as they have into drama and some of the alternative stuff,” she said. But two of the most valuable Disney brands, Lucasfilm and Marvel, now appear positioned to supply more content to the service than to the broadcaster. Likewise, the acquisition of 20th Century Fox TV promises to upend the status quo at ABC Studios, which in the past year has lost top creators Shonda Rhimes and Kenya Barris to Netflix.
With the Disney deal tearing Fox Broadcasting from its studio, the network is shifting toward a strategy heavily reliant on live sports, with the addition of the NFL’s “Thursday Night Football” this season and the WWE’s “Smackdown” next season. What entertainment programming the network acquires now promises to be largely defined by how well it plays to football and wrestling audiences, and there will be less of it. Fox entertainment president Michael Thorn conceded as much when he told Variety in August, “The NFL will take 10 to 11 weeks of Thursday-night programming. But there’s still so much opportunity.” He added, however, that when it comes to scripted development, “we will be more targeted.”
Even NBC, comparatively stable and prosperous, has not been immune to change. Top programming exec Jennifer Salke — who shepherded the network’s biggest hit drama, “This Is Us” — departed this year to become head of Amazon Studios. Her exit put two fast-rising executives, newly minted NBC Entertainment co-presidents Lisa Katz and Tracey Pakosta, in charge of development for the first time, and placed more weight on the shoulders of NBC Entertainment chairman Robert Greenblatt, who renewed his deal with the network last summer. NBC parent Comcast, after failing in its own bid to acquire Fox, is not expected to sit on its hands. Speaking at Variety’s Entertainment and Technology Summit, FX CEO and admired industry tea-leaf reader John Landgraf speculated, “It would be surprising to me, for example, if Comcast didn’t eventually take a step toward creating a large streaming platform.”
Meanwhile, broadcasters are competing to lure not just viewers but creators to their platform amid an ever-thinner talent pool. Hot young producers such as Barris — who just four years ago was considered by ABC to be too green to run his own show — are increasingly turning to premium outlets where they can spread their creative wings and land big checks up front.
Defenders of broadcast TV argue that there’s more potential for success on the Big Four. “I think it’s misguided to take your biggest projects and only put them on a streaming platform,” says Katz Media Group’s Stacey Lynn Schulman. “Because the biggest audience, the biggest cultural currency is to be had on that big broadcast vehicle.”
But the need for broadcasters to reach large audiences in order to drive the price of advertising places inescapable limitations on what TV creators — more empowered than ever by the high demand for their services in a world with more than 500 original scripted programs — are allowed to do over the air. Dungey, speaking to Variety in August, said of Barris’ departure for Netflix, “He had come to a place creatively where he wanted to do some things outside of what broadcast allows you to do, where you don’t have to worry about act breaks, and you don’t have to worry about standards and practices, and I understand that.”
As creators such as Barris, Rhimes and Ryan Murphy exit broadcast for the creative freedom of streaming, they’ve ceded pilot season largely to old hands who tend to employ tried-and-true formulas. (Producer Dick Wolf, asked at the TCA summer press tour why his new drama “FBI” would air on CBS rather than NBC, acknowledged that he already had so many shows on the latter that “there was no more beachfront real estate left” there.)
Consequently, early buzz around broadcast development for 2019-20 has not been good. And broadcast programmers’ fascination with reboots and revivals continues unabated. That’s due in part to the success ABC found last season with massive hit (and subsequent public-relations nightmare) “Roseanne,” which premiered to 27.3 million viewers in Nielsen live-plus-seven numbers. Other high-profile revivals and reboots include “Will & Grace” at NBC and the upcoming “Magnum P.I.” and “Murphy Brown” at CBS.
Amid the reboot frenzy, the market has become saturated with recycled product. The broadcast networks all passed on Sony Pictures Television’s pitch for a “Mad About You” revival starring Helen Hunt and Paul Reiser; the project is now being shopped to basic cable, where it has yet to catch traction.
Meanwhile, broadcasters are picking up fewer and fewer shows. For the 2018-19 season, the Big Four and The CW ordered 36 new scripted shows in total. That’s down from 38 for the 2017-18 season and 42 for 2016-17. Compare that with Netflix, which announced in February that it’s aiming to stream around 700 original shows this year, including international productions.
The development struggles are symptomatic of the larger issues faced by broadcasters. Subscription services such as Netflix can aggregate subscribers by appealing to multiple audiences — people who like sci-fi action dramas, or true-crime documentaries, or British baking shows and so on. Broadcasters, meanwhile, are increasingly challenged in their quest to create shows that have mass appeal while trying to cater to younger viewers whose tastes are being shaped by digital services.
For Fox, the next few years will be an experiment in whether a broadcast network can find the right mix of programming, heavy on live sports, to be a successful centerpiece business in a small company. But for ABC, NBC and potentially CBS (should its current crisis end in acquisition), the best possible future might be one in which each broadcast network occupies a position of lesser import in a conglomerate built around a direct-to-consumer streaming business.
“They’re at kind of a crossroads,” Adgate says. “But all the arrows are pointing in one direction.”