NBC Ratings Slump Hits Bottom Line

Ratings are down across the network TV business, but hardest hit among the Big Four is NBC, which is pacing to spend a fourth year in fourth-place, down 11% in the ratings — even though it added the NFL on Sunday nights.

NBC placed some big bets on scripted dramas like “Bionic Woman,” which didn’t pay dividends. Now Adweek reports from ad agency sources that the network is paying cash rebates to advertisers for unmet ratings guarantees. Adweek says NBC is paying advertisers an average of $500,000 each, a figure which doesn’t make a lot of sense to us or to Jack Myers, whom we consulted. But matter what the number is, NBC won’t be happy about paying it out.

The problem for NBC isn’t advertiser demand, which is still strong. The problem is not enough viewers, which also afflicts Fox, CBS and ABC. The networks usually compensate advertisers for under-delivery by giving them held-over or “scatter” ad inventory. But demand, and rates, for scatter were so high this year the nets sold out of that, too. If more people were watching network TV, this wouldn’t be a problem. But the nets can’t offer what they don’t have, so right now they have nothing but cash with which to compensate advertisers.

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