Recovery ahead for network TV

Things could improve by the end of next year

NEW YORK -- A leading network TV researcher painted a bleak picture for the 2008-09 season, financially and in the ratings. But he said that things would improve by the end of next year.

CBS chief research officer David Poltrack, who has weathered four recessions in his long career at the company, said that the economy has gone south and taken network TV with it. Poltrack forecasts that network TV advertising will be up a mere 1% in 2008 and down 7% in 2009.

That compares to his previous prediction of network TV advertising jumping 7% in 2008, including a 2% rise thanks to the Olympics and a strong upfront. But the nets got a double shock, the impact of the writers strike in the first half of 2008 and the declining economy in the second half. The fourth quarter scatter market was weak and the advertisers were negatively impacted by a meltdown in the housing and financial markets, when consumer spending dried up.

"The consumer is not consuming," Poltrack said.

By looking at past recessions, CBS has found that some advertisers severely cut or eliminate their ad spend while at the same time well-heeled other companies pour their dollars into ads to try to gain market share. CBS is seeking right now to see "how major marketers are lining up in the two camps."

Another problem facing network television is ratings so far this season. Poltrack freely acknowledged that network TV hasn't had a good season, with mostly declines. CBS, he said, had either much lesser declines or had increases in key demos.

He pointed to the election as a partial culprit, saying that the four debates and Election Night hurt the nets because it couldn't program (and run ads) during those five nights. Cable news nets also drew viewers away.

But he also tweaked the rival nets that de-emphasized pilot development, which Poltrack said was a key part of TV success.

"Our competitors have paid the price" by skipping pilot development, Poltrack said. He also said that the return of shows that didn't get a good run before the strike, and also not scheduling them after the strike but before the end of the 2007-08 TV season, failed as a strategy. CBS, he said, returned shows and has faired better (as has Fox) while he said NBC and ABC haven't.

As for when the recession will end, Poltrack wasn't as negative as some analysts. Poltrack's message? This too shall pass. The impact of the recession will lessen each quarter of 2009, he said.
"The end of the recession will at least be in sight by the fourth quarter," Poltrack declared. He said that the fourth quarter will also look better than 2008 because they'll be able to fully program -- and rake in the ad dollars -- from five nights that it couldn't this fall because of the election and primaries.

He also said that projections right now are that CBS will finish up the TV season up in key areas, given a strike-free season.