Cable Distribution Snapshot: 48 U.S. Networks that Commission or Acquire Unscripted Programs

“How to respond to cord-cutting and the rise of SVOD?”

That was the hot topic at a panel that I recently produced for the New York State Bar Association‘s annual conference.

At first, veteran audience analyst Dr John Morse (Byron Media) shared his deep dive into changes in the viewing habits of the American television audience.

The expert panel assembled by the NYSBA’s Entertainment & Sports Law section then discussed how these changes are impacting producers and networks as well as their lawyers and other service providers.

Watch out for future posts covering more highlights and Takeaways from John Morse’s presentation.

Year-To-Year

  • To provide context, John later shared the Year-On-Year change in the “Universe Estimate” of households reached by U.S. channels.
  • Here is my broad selection of the distribution footprints of 48 networks that commission or acquire documentaries and other categories of unscripted programs.
February
2017
February
2018
   
  Households (‘000)    
  UNIVERSE
ESTIMATE
YOY Diff
NETWORK (‘000) %
NAT GEO WILD 56,189 59,533 3,344 6.0%
BABY FIRST 53,878 56,900 3,022 5.6%
HBO 34,369 36,224 1,855 5.4%
VELOCITY 71,273 72,939 1,666 2.3%
BBC-AMERICA 80,044 80,481 437 0.5%
TNT 90,586 90,350 -236 -0.3%
USA 91,726 91,458 -268 -0.3%
FOOD 93,062 92,732 -330 -0.4%
BRAVO 87,620 87,284 -336 -0.4%
FX 90,389 89,933 -456 -0.5%
CNN 91,794 91,306 -488 -0.5%
TBS 91,995 91,504 -491 -0.5%
HGTV HOME & GARDEN 91,169 90,659 -510 -0.6%
E! ENTERTAINMENT 89,887 89,298 -589 -0.7%
NAT GEO CHANNEL 89,865 89,233 -632 -0.7%
WE TV 86,605 85,985 -620 -0.7%
A&E 90,478 89,716 -762 -0.8%
TRU TV 87,204 86,453 -751 -0.9%
HISTORY 91,107 90,303 -804 -0.9%
LIFETIME 90,544 89,612 -932 -1.0%
ESPN 87,859 86,721 -1,138 -1.3%
ID: INVESTIGATION DISCOVERY 85,113 83,922 -1,191 -1.4%
TLC 90,215 88,845 -1,370 -1.5%
DISCOVERY 91,829 90,375 -1,454 -1.6%
BET 84,415 82,772 -1,643 -1.9%
OXYGEN 75,651 73,909 -1,742 -2.3%
VH1 88,085 86,039 -2,046 -2.3%
ANIMAL PLANET 89,406 87,031 -2,375 -2.7%
MTV 88,137 85,432 -2,705 -3.1%
TRAVEL 84,862 82,225 -2,637 -3.1%
SHOWTIME 29,014 28,091 -923 -3.2%
DISCOVERY LIFE 47,011 45,439 -1,572 -3.3%
OWN 78,420 75,612 -2,808 -3.6%
WEATHER 84,683 81,485 -3,198 -3.8%
COOKING 64,598 61,755 -2,843 -4.4%
OVATION 47,602 45,331 -2,271 -4.8%
SMITHSONIAN 37,275 35,241 -2,034 -5.5%
LOGO 48,646 45,960 -2,686 -5.5%
DIY 58,799 55,406 -3,393 -5.8%
AMERICAN HEROES 54,559 51,388 -3,171 -5.8%
FUSE 64,773 60,865 -3,908 -6.0%
REELZ 65,453 61,423 -4,030 -6.2%
VICELAND 72,798 68,108 -4,690 -6.4%
SCIENCE 69,024 64,284 -4,740 -6.9%
OUTDOOR 38,683 35,693 -2,990 -7.7%
DISCOVERY FAMILY 62,873 57,988 -4,885 -7.8%
LIFETIME 76,423 70,014 -6,409 -8.4%
DESTINATION AMERICA 53,388 47,947 -5,441 -10.2%
FYI 64,659 56,059 -8,600 -13.3%

Other Key Data

  • 119.6 million U.S. homes (+1% year-on-year)
  • 98 mn multi-channel households (-0.5%)
  • The year-on-year average gain (loss) of Nielsen’s universe of 125+ channels: -2.1%
  • Year-on-year average gain (loss) of the selection above: -2.4%

Takeaways

  • Channels enjoy long-term distribution agreements with cable/ sat operators, and these include annual increases in carriage fees.
  • Higher per-subscriber fees largely offset the continuing revenue erosion from a shrinking subscriber base.
  • However, the audience and therefore ad sales revenues are also declining for most channels.
  • John Morse shared a key slide from Kagan that captures the shift in the channels’ revenue mix from ad sales to sub fees, 1996-2016.

Discovery Networks and the Skinny Bundle

  • Notice that subscriber losses hit Discovery’s networks.
  • Even channels that are on a roll like ID (-1.4%) and Science (-6.9%) showed losses, although Velocity gained subs (+2.3).
  • Part of the explanation lies in the dynamics of the “skinny bundle” negotiation.
  • Subscribers who want fewer channels in their cheaper package place the highest value on the broadcast networks, CBS, NBC,  ABC and FOX.
  • The broadcasters therefore have leverage with the cable operators.
  • They use it to pressure operators to include their owned niche channels in the skinny bundle.
  • Discovery is not owned by a broadcaster and is paying the price by losing subs.

Unduplicated. Or Not!

  • I added Baby First TV to my list because it is an example of a channel that ticks the box for “Unique & Unduplicated.”
  • The content of most Unscripted channels overlaps with others, and that’s not helpful in this era of cord-cutting, cord-shaving and cord-nevering.

Next

  • Watch out for posts with more key data and Takeaways from John Morse and the NYSBA panel.

Understand Your Audience

  • Read more about Byron Media and the services that John Morse and myself provide producers, distributors, investors and networks.

NYSBA Annual Conference, Entertainment & Sports Law Section.
Panel on Key Industry Trends 

Aleena Maher (SVP, Business & Legal Affairs, Global Music & Entertainment Group, Viacom Media Networks)
Peter Rienecker (VP, Legal Affairs, HBO Documentaries)
Rhonda Powell (SVP, Business & Legal Affairs and Chief Legal Officer, Complex Networks)
Eriq Gardner (The Hollywood Reporter)
Ezra Doner (Attorney in private practice)
Chair: Barry Skidelsky, Attorney.
Thanks to Pamela Jones, Attorney.