TV Ratings Now Focus On Who Will Watch In The Future

The start of the fall TV season marks the first real concerted effort by the big four broadcast networks – ABC, CBS, Fox, and NBC — to highlight viewers for a show over a full week.The move reflects the shift away from live television viewing for entertainment programming and is aimed at prying more money away from advertisers.

CBS said that viewers for the season premiere of The Big Bang Theory will total around 25 million. NBC said just under 19 million people will watch the second season debut of The Blacklist. ABC said the two-hour premiere of Dancing with the Stars will be watched by 14.1 million people, and Fox said 12.2 million people will watch the series premiere of Gotham.

The key word here is "will," as in that is how many people are expected to watch these shows at some future point as opposed how many actually watched them when they aired live Monday night. Specifically, these ratings are based on the number of expected viewers who will watch these shows in the next week, what is known in industry parlance as "Live +7-day ratings."

The start of the fall TV season this week marks the first real concerted effort by the big four broadcast networks to highlight viewers for a show over a full week. The move, which took root last year when Fox started issuing L7 viewer projections, reflects the shift away from live television viewing for entertainment programming and is aimed at prying more money away from advertisers.

Here is where it gets a bit wonky. There are two aims to this new strategy, even if it looks like one. The first is to show how big the audiences for these shows are — the L7 number — which is certainly important. The other is to get advertisers to pay rates based on the size of a show's total projected audience, which is a somewhat trickier proposition because advertisers are more concerned with who watches the commercials, not the show itself. The figure they are most interested in is what's knowns as C7, a metric that shows how many viewers watched the commercials that air during a show live and within 7 seven days. The networks did not include a C7 projection in their ratings releases. Advertisers currently pay networks on a L3 and C3 projected basis, which accounts for live and delayed viewing on a three-day basis.

Still usually at this time of year the networks are all putting out releases trumpeting their ratings victories and taking jabs at their rivals' failures. And while there is still an element of that, their alignment in pushing L7 ratings in their releases underscores how quickly the rise of on-demand viewership is eroding their business model.

In announcing last week that CBS would move to a L7 ratings reporting system, CEO Les Moonves said the metric "more accurately accounts for how viewers watch our shows and how we get paid for our programming."

Based on L7 projections, for instance, The Big Bang Theory would increase its total audience by 40%, or 7.1 million people, to 24.9 million viewers from 17.8 million, while NBC's The Blacklist would gain 6.3 million total viewers, to 18.8 million from 12.5 million.

Moonves and his fellow network leaders have been advocating strongly over the last year for L7 to be the new standard. Moonves said in last week's announcement that CBS negotiated L7 and C7 deals as part of this year's Upfront negotiations, the annual ritual where TV networks showcase their new shows to advertisers and sell a percentage of their commercial load in advance of premiering them.

The reason L7 has not yet become the standard is because advertisers know that the more TV is watched on a time-shifted basis, the less commercials are being seen. Indeed, according to The New York Times, advertising revenue generated by the networks during this year's upfront fell between 5% and 10% to less than $9 billion. Audience projections can grow ever larger, but if people aren't watching the commercials, advertising revenue will continue to shift to other platforms. Put another way, a given show's audience can grow exponentially over a 50 or 100 day period, but if none of the new viewers are watching the ads, the networks will meet resistance in getting paid more for them.

The networks' L7 push does have an element of tail-chasing to it as well. Consumption is increasingly moving to mobile devices and streaming via Netflix, Hulu, Amazon Prime and other services. Concepts like binge viewing, or watching an entire season of a show in one sitting, and stacking — storing up episodes of a show for a binge — are moving from the fringes to the mainstream.

Maybe that's why Fox has also begun highlighting in its ratings releases a new metric called the "30-Day Multi-Platform Total Audience."

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