Major broadcast networks see drop in ratings, begin eyeing cable and Internet streaming

As we swing into Spring, May is not only the time of year when things begin to warm up and grow, but when broadcast television brings out its plans for the Fall TV season to share with advertisers. Only this year, this annual event could not be more pivotal, as networks hustle to build confidence while some advertisers begin to drift elsewhere. 

Beginning a year ago, all 4 of the major networks — ABC, NBC, CBS and FOX — saw a ratings decline of the key 18-to-49-year-old demographic. FOX was hit the hardest with a 23 percent dip, while the other were around 3 percent to 8 percent. The problem with audience members leaving traditional broadcast is that advertisers tend to follow as well. In fact starting in 2011, ad sales were actually higher in cable TV than they were in broadcast TV. 

The next step is Web video, which has seen tremendous growth in the form of viewing devices such as smartphones like the iPhone and Android, tablets like the iPad and Nexus, and even1080p-resolution laptops. The important demographics are heading from cable and into the Web in large numbers, often skipping broadcast television entirely. 

Ironically some of the bigger Web providers, such as Hulu and Netflix, have a big chunk of their programming come from previously run network TV shows. The only problem is the absence of advertising in this streaming venue (except Hulu, which still serves ads). Streaming companies have often argued that showing broadcast series helps to promote the first-run showings on broadcast. Now networks are not so sure as they see their once-large lead slowly slipping away. 

Broadcast networks are now taking the leap to developing their own streaming options. Most have dedicated apps and on-demand content, but it is still more work to download a separate app for each network than to just sign up for Hulu. But broadcast must push ahead because that is the only way the playing field will be leveled. 

The next step may be that broadcast needs to create original Web programming, much the way Amazon, Netflix and Hulu are doing. If the networks can get viewers to tune in to something not available elsewhere, that could provide an advantage. However, most networks will not let a series develop, giving it time to mature and breath, as well as build a following. Networks have an eye on ratings and are quick to cancel a show that may be off to a shaky start — only to replace it quickly with a new one. Streaming media networks have less pressure, and as such we’ll be seeing more diversity and breakout hits from Internet-based entertainment. The kind of hit shows (like "House of Cards") that broadcast so desperately wants.

So, while this spring brings warm weather and change, the biggest change will be to see how broadcast television aligns itself in a new Internet-based entertainment world.