Update: 8th October 2014 As the new season is now upon us, I thought it was as good time to repost this for new SpoilerTV readers.
I have been very kindly invited to start contributing to this great site with some ratings analysis and predictions about renewals and cancellations for the broadcast networks. However, before I start doing that, I thought it would be useful to come up with some type of guide to those who are less acquainted with the way renewals and cancellation work as well as the ratings system in general.
Click on the following sections title to expand/collapse the various items of information.
- Ad-Rate Revenues (depends on C3 18-49 Ratings and other subset demos);
- Syndication Potential (depends on # episodes);
- Tenure (depends on # of episodes):
- Opportunity Cost for Fridays (depends on whether or not airing on Fridays):
Before I explain each one of these further, there are two important notions to highlight:
- The only comparisons that matter are from shows within the same network! Therefore, as nice as it is for a show to come first in its timeslot, that doesn't help its renewal chances if it is still the least profitable show on the network. I would also add that, for the most part, you are better of sticking with comparing comedies with comedies and dramas with dramas rather than by mixing them all up.
- It is all relative! This means the absolute ratings are of little use when evaluating a show's renewal chances. This implies that notions such as "if my shows falls between a 1.8 is doomed" is likely to be a misconception because that 1.8 is, in itself, a moving average, which means that if the numbers for your show go down, it is fine as long as the numbers for the rest of the network go down on a proportional amount.
Both of these imply that the end-product of any renewal/cancellation prognosis is a pecking order for the shows of a network, as in, which show will the network pick as first renewal, as second, as third, and so on and so forth. Typically, the hardest part is to figure out how many shows will the network renew in that year; the best we can come up with is the ranked list of preferences and then try to extrapolate potential networks decisions using their past history.
Another point to take into account here is that you should never look at the entire seasonal averages of a show to judge its renewal chances! You should always use, or at least weight significantly more, the most recent ratings as opposed to earlier season ratings (this is the same as saying that you should take into account the trend the ratings are following). Remember, networks are not interested in evaluating, backwards, how much money the show made them that year but, instead, how much money will the show make them next year, if renewed.
Moreover, I also find evidence to assume that the package becomes even more attractive with 100 episodes (which used to be the old mark for syndication). Even after these 100 episodes, syndication can also play an important role, because the more episodes are produced, the more episodes are sold into syndication. Now, one thing you have to bear in mind here is that even though virtually all shows can be syndicated, not all shows have the same syndication potential. Obviously, the higher rated the show is (and the higher rated its repeats are) the more other channels are willing to pay for the show, so the highest its syndication value is.
Exactly by how much syndication boosts shows it is something that nobody is quite clear yet. I think everyone accepts that it is somewhere between 40%-80%, and I am actually more willing to go for the higher end number than the lower one, but you can feel free to disagree with the exact value I use until definite evidence has been produced on this. Likewise, I typically assume a 20% bump for shows approaching the 100 episodes, but again, feel free to disagree with me on this to the extent of which is the exact number. Regardless of the number, syndication doesn't automatically save a show as it is commonly assumed. If the ratings differential between that show and the other shows on the network are too large, then syndication may not be enough to compensate for the losses the network would incur by keeping the show and cancelling a higher rated show. I think this will become clear later when I present an example.
Note, however, that any other timeslot consideration such as a show facing huge competition, having poor retention out of a huge lead-in, etc., although important when analysing moves the network can make, are almost never shown to be taken into account by networks when making their renewals or cancellations decisions.
The other factors that I do think can make a difference in some marginal cases (as in, situations in which the gap between two shows is not big enough) are the following:
- cost considerations: even though I usually assume that all shows within a network are produced at roughly the same cost, there are some exceptions such as shows in co-productions agreements being cheaper (Hannibal, Dracula, Crossbones) or shows with abnormally high production costs reported (Terra Nova, Two and a Half Men). Sometimes, it is okay to assume that older shows become more expensive as they go on, but I would advise caution with this, because not only it depends on how effectively they rotate the cast (new cast member are typically cheaper than older ones) but also because the effect of producing additional syndication episodes typically counterbalances this.
- production company/ show creator: if a show is produced by the network studio, it could be that there are extra incentives to keep it that a bought show doesn’t have. This effect is hard to measure with the limited sample I have access to though, so I am not sure yet on how to quantify it but I think it's foolish to completely ignore it too.
- schedule considerations: sometimes, the decision for which show to let go as to do with what will go to the timeslot when the show is let go. This is hard to measure and I am not exactly sure of how relevant this is, but it seems reasonable to me to accept that ABC was more willing to put something like The Neighbours on Fridays than something like How to Live. Moreover, two years ago, CBS reportedly cancelled CSI: Miami instead of CSI: NY because they were already launching Made in Jersey on Fridays so they thought it would be best to keep the rest of the night unchanged and revamp Sundays instead with the Mentalist; even though I am not sure how much of this is exactly true, it may be worth considering.
- demo breakdowns: I will dwell on this on the next section, but the idea is that if a show reaches a very specific, scarce group of the 18-49 demo that seldom any other show can reach, then that show is more valuable, and has a higher likelihood of coming back (hence, for instance, Glee's two year renewal or The Mindy Project's renewal last year)
Remember, however, that these factors will only make an impact on marginal cases!
- The Vampire Diaries: 1.10, 112 episodes at season's end
- Arrow: 1.0, 88 episodes at season's end
- Hart of Dixie: 0.4, 66 episodes at season's end
- The Carrie Diaries: 0.3, 35 episodes at season's end
- The Tomorrow People: 0.6, 22 episodes at season's end
If we consider ratings as the only factor and we divide each shows ratings by the average of the network (assuming the same # of aired episodes this season), the pecking order looks like:
1. The Vampire Diaries: 1.62
2. Arrow: 1.47
3. The Tomorrow People: 0.88
4. Hart of Dixie: 0.59
5. The Carrie Diaries: 0.44
This means that if one show is to be cancelled, it will be TCD; if it is two shows, it will be HoD and TCD; three show, TTP joins them; four shows, only TVD survives; and 5 shows, all are cancelled.
Now, let's add the syndication bump for shows within a season of 88 episodes (Hart of Dixie):
1. The Vampire Diaries: 1.48
2. Arrow: 1.34
3. Hart of Dixie: 0.97
4. The Tomorrow People: 0.81
5. The Carrie Diaries: 0.40
Note that now, if two shows were to be cancelled, it would be TTP and TCD instead of HoD and TCD! Syndication could save Hart of Dixie if the cw cancels two shows only. Note, however, that if three shows are cancelled, Hart of Dixie would still go regardless of syndication - it is not a magic potion that solves all, even though it can definitely help!
Let's now introduce the bump for shows approaching 100 episodes (Arrow):
1. Arrow: 1.53
2. The Vampire Diaries: 1.40
3. Hart of Dixie: 0.92
4. The Tomorrow People: 0.77
5. The Carrie Diaries: 0.38
Note that now, if four shows were to be cancelled, Arrow would be the sole survivor rather than TVD!
Let's add the newbies factor into this as well (I consider shows with less than two full seasons under their belt to be newbies):
1. Arrow: 1.57
2. The Vampire Diaries: 1.44
3. Hart of Dixie: 0.94
4. The Tomorrow People: 0.70
5. The Carrie Diaries: 0.35
In this case, this actually didn't produce any changes in the relative standing of the shows, even though the gap between HoD and TTP got larger, thus indicating more danger for TTP. However, it could easily be the case that this would result in changes on the relative standing.
Finally, let's consider also the Friday bump:
1. Arrow: 1.54
2. The Vampire Diaries: 1.42
3. Hart of Dixie: 0.93
4. The Tomorrow People: 0.70
5. The Carrie Diaries: 0.42
As with syndication, Friday factors are not miracle workers. Even though TCD received some bump, it is still easily the most likely candidate to be cancelled unless the CW decides it wants 5 returning hours of dramas.
I hope you got the idea! My point is not to convince you that my % bumps are correct or incorrect for now (they certainly aren't 100% correct, I am aware of that), but hopefully you believe that their range is more or less correct and hopefully you understand a bit of how I think we should try to predict renewals and cancellations. Notice that, because so much is approximations, there is no meaning in declaring that a show with a 0.7 instead of a 0.6 is significantly safer. However, there is plenty of room to declare that something with 1.42 is significantly safer than something with 0.93 (in the example), which at least works to prove some misconceptions such as the "syndication saves all" idea.
- HH: these measure the percentage of total households in the US that watched the show
- Total Viewers: these are the total number of people >2 years old that watched the show
- 18-49 Rating: percentage of people aged between 18-49 that watched the show. For the 2013/2014 TV Season, the estimate is that a 1.0 rating point is equivalent to about 1.268 million people aged 18-49 watching the show.
- 18-34 Rating: percentage of people aged between 18-34 that watched the show. For the 2013/2014 TV Season, the estimate is that a 1.0 rating point is equivalent to about 0.676 million people aged 18-49 watching the show
- You may find a lot of other subsets of demo, such as 25-54, Men 18-34, Men 18-49, Women 18-34, Women 18-49, Teens, High Income Men 18-49, High Income Women 18-49, High Income 18-49 etc. The rationales are the same as for the 18-49 Rating and the 18-34 Rating: it is always a percentage of the total universe of the subset group.
In economics, one of the most basic characteristics you have to take into account when thinking about any model is scarcity. Here, it is the same thing. In fact, what happens is that viewers >50 are perceived by advertisers as being easier to reach. This happens because they the ones that watch more TV, meaning for instance that if they are not caught by the ads of program X, they will be caught by the ads of program Y. Usually they also watch more daytime TV, which also helps in being more easily “reachable”. If there were to be a huge demographic revolution and the youth started to be glued to the TV all the time and older people would never be in front of their TV, then I can guarantee you that the system would change to reward those TV shows that would get people >50 to sit in front of their TVs. This is why you should practically ignore the Total Viewers (and Household) metrics. 18-49 is the most relevant one.
Therefore, these numbers can matter and make a difference. The 18-49 are still the main indicator, but further demo breakdown information can help when deciding on the fate of bubble shows.
- Live+SD: It refers to the viewing that occurred live or until 3 am on the night the show aired. These are the numbers that we see everyday when the ratings from the previous night come out. This measure disregards whether you’ve watched commercials or not.
- Live+3Days (DVR-L3): It refers to the viewing that occurred live and that occurred within 3 days from the original airing date. It also disregards whether you’ve watched commercials or not.
- Live+7 Days (DVR-L7): It refers to the viewing that occurred live and that occurred within 7 days from the original airing date. It also disregards whether you’ve watched commercials or not.
- C3/ C7: It refers to the viewing that occurred live and that occurred within 3/7 days from the original air date. However, this number only counts viewers that effectively watched the commercials.
You can then have different combination of measures and time windows, such as 18-49 C3 numbers, 18-34 L7 numbers, Total Viewers Live+SD numbers, etc etc.
However, since these numbers are very hard to come by publicly, we typically rely on Live+SD numbers to make predictions. Historically, it has been shown that these are a fairly good proxy to the C3 numbers and that deviations are rare to be higher than 15%. Most importantly, the relative standing of a show within the shows from the same network is unlikely to change. Still, just so what you understand, the differences between Live+SD and C3 numbers are the following:
- If you watch a show after its airing up until 3am of the same night but you skip commercials, then your viewing is counted for the Live+SD sample but it is taken out of the C3 numbers.
- If you watch a show up until 3 days of the initial airing with commerials, that viewing was not included in the original Live+SD, but it is included in the final C3 numbers
Because these typically cancel out each other, it is widely assumed that the Live+SD numbers are a good proxy for the C3 numbers.
- Accorded to a study from SpottedRatings, highly DVRed shows are typically those that show a bigger jump from Live+SD to C3, which means their ad rates will be slightly higher than we give them credit for in Live+SD. Remember, however, that the jump is unlikely to be big enough to create any meaningful difference in the relative standings of shows within that network and, at best, will make a difference when deciding on marginal shows only
- It can provide meaningful information about the possibility of a show being moved. If a show has abnormally high DVR numbers, it may be that it is airing too late for its intended audience or that it is airing against competition that is too aggressive, but that it still has enough 18-49 people watching it to be feasible elsewhere. This may help networks to decide on marginal situations.
Apart from these small tidbits, you should ignore DVR rating for the most part when assessing a show’s renewal or cancellation prospect. Most of all, do not make the mistake of saying that because your show has a 2.5 on L7 ratings, then it is safer than a show with a 2.1 on Live+SD ratings. You always need to compare apples with apples!
- preliminary: they are the fastest ones to come out and they measure the amount of people that were watching the channel at a certain period of time.
- finals: they come in later and measure the amount of people that were watching that specific program.
What is the difference then? Well, two main things can change ratings from preliminary to finals:
- if a show runs later (or starts later), that has to be adjusted. So, let's say, that Modern Family finished at 9h32 instead of 9h30. Those extra two minutes were initially counted as part of Super Fun Night's ratings and have to be taken out of there and added back to Modern Family's ratings.
- if a show is pre-empted (i.e. certain affiliates show a different program, typically sports events or special news editions), then the initial numbers will count these other shows as well, which then have to be taken out of the final numbers.
The final numbers are the only ones that matter in the end.
We've taken the following directly from Wikipedia.
1) Viewer "diaries", in which a target audience self-records its viewing or listening habits. By targeting various demographics, the assembled statistical models provide a rendering of the audiences of any given show, network, and programming hour.
2) A more technologically sophisticated system uses Set Meters, which are small devices connected to televisions in selected homes. These devices gather the viewing habits of the home and transmit the information nightly to Nielsen through a "Home Unit" connected to a phone line. The technology-based home unit system is meant to allow market researchers to study television viewing habits on a minute to minute basis, seeing the exact moment viewers change channels or turn off their TV. In addition to set meters, individual viewer reporting devices, such as people meters, have allowed the company to separate household viewing information into various demographic groups, but so far Nielsen has refused to change its distribution of data of ethnic groups into subgroups, which could give more targeted information to networks and advertisers.
Changing systems of viewing have impacted Nielsen's methods of market research. In 2005, Nielsen began measuring the usage of digital video recordings such as TiVo. Initial results indicate that time-shifted viewing will have a significant impact on television ratings. The networks are not yet figuring these new results into their ad rates due to the resistance of advertisers.
- if you understand something about statistics, you know that this is the way that it works and you know that provided that the sample size is large enough, which there is reason to believe it is, we can trust the numbers with reasonable confidence (typically around 90-95%) that they are representative enough of the entire population. If you don't believe me, think of it this way: advertisers would not be stupid enough to pay decades and decades for something that depends on these numbers unless they were confident these were true!
- this being said, I advise people to ignore 0.1 fluctuations (or even 0.2s in some cases). Sure, it is nice to see our shows go up and we hold on that we can, but in practice this is unlikely to mean anything. Two reasons:
a) despite the accuracy of these statistical methods, there is still room for some margin of error (5-10%). These adjustments typically fall within said margin of error and should be disregarded.
b) there is a rounding error in the numbers we see. A good example of this is The Tomorrow People. The show opened with 1.084 million 18-49 viewers (0.9 rating). The second week it had 1.079 million 18-49 viewers (0.8 rating). Because of rounding, the first week looks much better than the second if we look at ratings. In fact, even though the show only fell by 0.5%, looking at the rating it looks like an 11% decline! These type of issues is more frequent the lower the demo is, which is why I advise special caution especially when it comes to the cw!
Bottom line: Nielsen is trustworthy, yes, but you should ignore minor adjustments in a show's ratings.
We hope you find this helpful!
If you have any further questions or if you have comments, please let me know!
Disclaimer: Most of the above is factually based although some of the information is extrapolated from past analysis and interpretation.