Hopes of an audience usage recovery, or at least stabilization, took a turn for the worse for linear cable and broadcast networks in July, as a 7 percent across-the-board audience drop ended a six-month period of small, steady growth.
Working off Nielsen’s coin of the realm for ad sales, the C3 rating, MoffettNathanson found that the major cable programming conglomerates collectively saw a 7 percent year over year drop in C3 performance during prime time in July, with Disney’s networks off an industry-worst 20 percent.
On the broadcast side, C3 ratings were also off by 7 percent, with Fox enduring a massive 35 percent year-to-year decline, partly the result of a tough comparison to July 2015, when it had FIFA World Cup Women’s Soccer coverage.
The ratings shortfalls followed single-digit-to-flat growth for the first six months of the year. This small but steady expansion had ignited hopes that the linear TV business — after several years of huge declines — had finally stabilized.
“July proved to be the single worst month of the year, despite relatively easy compares,” said analyst Michael Nathanson.
On the cable side, Disney suffered mainly due to double-digit declines on ESPN, which has steadily been losing subscribers. Discovery Networks, meanwhile, was off 16 percent, having pushed its annual “Shark Week” ratings bonanza into June to get out of the way of the Olympics.
Time Warner Inc. (up 4 percent and being driven by the resurgence of CNN) and Scripps Networks Interactive (up 2 percent) were the only cable networks to report growth in July.
The first-half-of-the-year ratings improvement helped both broadcast and cable networks enjoy their best upfront ad-sales season in three years over the spring, with advertisers moving dollars back from digital platforms. A loss of ratings momentum, however, could turn that tide.
“If ratings start to turn and the scatter market starts to cool (as we expect), the ad beats witnessed in the first half of the year might be harder to come by,” Nathanson said.
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