Still Strutting After All These Years

The Ranking
By 2004 revenue ($million)

Most of NBC's new shows flopped. The network no longer rules Thursday night. Even the once lowly ABC topped NBC during the November sweeps. But the Peacock is still No. 1 where it counts: money.

The network will finish 2004 at the top of B&C's annual ranking of the 25 largest TV networks, a slot it has held since 2000. NBC's revenues are growing sharply this year, up by $600 million, or 13.5%, to $5.1 billion.

To NBC Chairman Bob Wright, that's what matters. Wright notes that the network business isn't just prime time, that Katie Couric and Jay Leno add a cushion or two. When prime time ad sales get rocky, Today and The Tonight Show help soften the blow.

"People forget that we have great strength in early morning, great strength at late night and even in daytime," Wright says. "That's why I never seem to be overly concerned about this issue."

B&C estimates revenue each year to show where money really flows in the TV business. We print each week who's winning and losing in Nielsens, which are so crucial to generating selling commercials. But while advertising is by far the major force, it's by no means the only one. Three of the 10 largest networks sell no advertising at all: shopping networks QVC and Home Shopping Network and pay movie channel Home Box Office. ESPN's average audience is just a fraction of ABC's, but the two networks' revenues are nearly equal because the cable sports network collects giant license fees from cable and DBS operations while ABC is dependent solely on advertising.

Fox News' audience is nearly double that of rival CNN. But CNN's license fees are higher, so the news network takes in 31% more money than Fox News.

The Top 25 networks represent 79% of the $52 billion that TV programmers are expected to generate this year. The fastest-growing network is TNT, which rode the wave of Law & Order and strong theatrical movies for a 21.2% increase to $1.6 billion. Other big gainers are MTV, Discovery Channel and Home Shopping Network.

NBC may not keep first place for long. No. 2 CBS is close, generating $4.5 billion this year and on track to becoming the top network in both viewers and the key 18-49 demo.

NBC, meanwhile, must face a new year with no Olympics. The Olympics generated a healthy $900 million in ad sales for the network during August, normally a slow season. NBC sales will almost certainly go down during a non-Olympics year.

Moreover, NBC's current audience slide didn't really start until September, so 2004 results will include just four months of rocky ratings. Unless its schedule changes dramatically, NBC faces a full 12 months of problems next year.

Third-ranked is home-shopping network QVC. Using its airtime to pitch consumers directly rather than selling advertising, QVC generates more sales than broadcasters ABC and Fox or even cable powerhouses like HBO and ESPN. When the ad slump was crunching broadcast networks, QVC was the second-largest network and seemed poised to jump to No. 1. The shopping network, however, has grown only modestly in the past two years and now sits behind CBS.

FX enters the list for the first time this year, increasing revenues by 12.7% to $575 million. The network has generated acclaim and high ratings from hit original series Nip/Tuck and Rescue Me. But most of the revenue gain comes from basic cable's old standby, stronger theatrical movies.

The biggest loser falls off the list: TLC. The cable network entered the rankings last year on the strength of Trading Spaces. But that show has faded, and TLC's audience has plunged 35%. The network is paying the price of relying too heavily on the whole makeover genre, then having nothing as strong when it abruptly went stale. TLC ran Trading Spaces 10 and more times weekly and spawned half a dozen “surprise” makeover imitators. More networks got in the game, and Trading Spaces abruptly lost its steam, sliding from a 4.0 average Nielsen household rating to a 1.5.

“It was doing record ratings just six months ago,” says Billy Campbell, president of Discovery Networks. “Saturation just hit.”

Campbell notes that the show is still fairly strong by basic-cable standards and TLC has new programs in the works aimed at lifting ratings.