The PJ Tatler

Is Anyone Watching Television Anymore?

For the fifth straight month, television ratings have declined by double digits over what they were a year ago.

What had started as a gradual slide as Netflix cut into traditional TV viewing habits has become a tsunami as Hulu, Amazon, and other streaming video services compete in a growing market of younger “cord cutters.”

The New York Post reports:

“It’s clear the downward spiral in TV ratings continues with no end in sight,” media analyst Michael Nathanson wrote in a research note on Friday.

Overall prime-time broadcast network ratings were off 12 percent last month compared to a year ago, while cable networks dropped 11 percent, according to his report.

Nathanson looked at so-called C3 ratings, which come in later than traditional ratings. They measure average commercial viewership in shows up to three days after the original air date via DVR playback.

While a couple of networks that carried the Super Bowl and the Olympics last year clearly suffered because of tougher comparisons, almost every channel was hurting.

Looking at total-day C3 ratings, only three networks boosted their audience: HGTV, Discovery and TBS, while TNT, History and Nickelodeon fell the most.

Typically, TV ad sales executives can increase prices to compensate for a ratings decline, citing scarcity. But Nathanson said seismic changes are pressuring networks to hold the line on pricing.

Although some of the ratings declines can be blamed on changes to Nielsen’s measuring methods, among other changes, “we believe these terrible ratings trends are also indicative of changing viewership habits,” he wrote.

The numbers underscore the rapid changes in how TV viewers are consuming content.

Americans are increasingly watching TV shows on Netflix, Hulu, Amazon streaming and other services. Some 40 percent of households now have subscription video service, Nielsen reported earlier this week.

We are rapidly approaching a tipping point and no one really knows what’s on the other side of the divide. The device — the television — will still be with us. It’s still far and away the primary choice for viewing, far outstripping phones and tablets. But what happens to the content?

The Wall Street Journal is reporting that Sony is in advanced negotiations with at least three streaming services for the rights to the Seinfeld series. The asking price may be as high as $100 million:

Among the bidders chasing the rights to the “show about nothing” are Hulu, Amazon and Yahoo. The deal could fetch a price well north of half a million dollars per episode, the people said. There are 180 Seinfeld episodes.

Netflix, which last year took a hard look at “Seinfeld,” is taking a pass on the show, a person familiar with the matter said.

Reruns of “Seinfeld have been on local TV stations and the cable channel TBS for years, but the buyers believe it has potential to continue that run for another several years on the Web. There, it could hold appeal for a generation of cord-cutters who can’t catch Seinfeld episodes on cable, and will allow users to search for their favorite episodes on-demand.

Landing the online video rights could elevate the stature of Hulu, Amazon and Yahoo, all of whom are in the large shadow of Netflix.

When Netflix acquired “Friends” last year from Warner Bros., it paid more than $500,000 per-episode, a person with knowledge of the deal said. Sony is seeking a higher price than what Warner Bros. received for “Friends.”

The price will depend, in part, on the length of the deal. The “Friends” agreement with Netflix runs for four years, which may be too short for some of the “Seinfeld” bidders. One suitor said a price tag higher than “Friends” doesn’t make sense if the contract is for less than ten years.

An agreement with an online video service would not mean the end of “Seinfeld” repeats on other outlets. “Friends” remains in heavy rotation on TBS even though Netflix has the rights and does not have commercials. Despite the addition of “Friends” to Netflix, ratings for the reruns on TBS have held steady.

There are no exclusivity deals for shows like Seinfeld now, largely because streaming services don’t have that kind of clout. But the time is approaching when the only place you’ll be able to watch some of your favorite shows will be on one streaming service or another. And that’s when the real scramble for customers will begin.