Networks cash in on debates

Sep 16, 2015
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Networks cash in on debates

Sep 16, 2015
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 It’s the best of times, it’s the worst of times. If you’re a cable or tv news network. 

Fox News’ Republican debate last month, with 24 million viewers, was the ninth-most-viewed cable program. Ever. The other eight were college football games. 

CNN is now staring a windfall in the face as it expects a record-breaking number of people to tune in for its debate.  

“This is going to be huge for CNN,” says Billie Gold, vice president and director of programming research at Dentsu Aegis. 

Technically, it’s not going to be huge, it’s going to be “yuge.”

CNN is charging, by some reports, 40 times its normal advertising price — $150,000 or even $200,000 for 30 seconds. Gold says many advertisers will buy, but for some, The Donald is a double-edged sword.

“You don’t know what’s gonna come out of his mouth,” she says. Or, for that matter, any politician during a debate. On the one hand that’s hilarious, on the other hand, that’s terrifying.

“For example, we might have a pharmaceutical account, and they might say something negative about pharmaceutical companies or whatever.”

For networks’ bottom line, debates are a big deal, but not the biggest deal, “because a debate program is a couple of hours long. It has a very little amount of commercial time,” says Jon Swallen, chief research officer at Kantar Media. “The bigger story here is just the impact on audience ratings to news programming in general.”

Campaign cycles always bump up viewership for news networks — for public radio stations too. This year, the numbers of viewers and revenue are up early for news networks, says Swallen. But they would’ve risen at some point.

“The manna from heaven, the windfall benefit, is one that’s going to diminish as we get closer to the beginning of the year,” he says.

And if you look at the big picture for TV and cable networks, the debates look like sunny days in hurricane season. Why? Cord cutting.

“People transitioning from paid TV video in favor of online product,” explains Erik Brannon, principal analyst for TV at IHS.  His firm looked at paid TV subscribers in the second quarter of 2015.  “People have been talking about cord cutting for a long time,” he says, “but this is the first time we noticed honest-to-god cord cutting that looks scary.”

Brannon says this campaign season, all told, could be the biggest ad revenue haul in history. But it may also be the last biggest one. Five years from now, we may well be talking more about online ads than TV.

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