First Walt Disney's (NYSE:DIS) ABC saw its Good Morning America not only end Comcast's (NASDAQ:CMCSA) NBC's Today show 16-year ratings win streak, but also take over the top spot on a near permanent basis in 2014. Now ABC has made its move to overtake NBC at the nightly news game.
For the first time this season, ABC's "World News with Diane Sawyer" finished ahead of "NBC Nightly News with Brian Williams" in the adults 25-54 demographic. That's the money demo for advertisers and many consider it a more important number than winning in overall total viewers.
The victory was not huge and ABC only actually won the demo on Monday, Tuesday, and Friday nights, according to Nielsen. But with NBC having dominated for so long, any victory is a sign of progress for ABC.
"World News" averaged 1.88 million total viewers for the week ended April 13, according to Nielsen, while "Nightly News" averaged 1.87 million. Only 12,000 viewers separated the two shows, and CBS (NYSE:CBS) came in well behind the leaders at 1.49 million viewers.
NBC still holds a large lead among total viewers with 8.18 million to ABC's 7.38 million, and CBS again coming in last at 6.37 million.
Nightly news still matters (for now)
While the concept of watching national news at a specific time each night instead of simply getting news when you want want it from a website or a smartphone app might be outdated, the numbers above show that there is still an audience (albeit an aging one) for the network news programs. In the week referenced above, over 21 million people watched the network news (though only about 5 million of those people were in the desirable 25-54 demo.)
Those viewers are still valuable, and NBC (which has the largest audience) makes the most money, according to the chart below from the Pew Research Center (using data provided by Kantar Media). The chart compares the first nine months of 2013 with the same period in 2012 in millions of dollars.
The numbers may seem small, but they are stronger than what the networks bill during other parts of the day.
In 2012 (the most recent year available), Kantar estimated that Good Morning America brought in $318 million (for a two-hour show) while Today took in $515 million. This was partially because Today was able to offer advertisers package deals that include the 9 a.m. and 10 a.m. hours of the show. In the morning, ABC averaged around $79 million per half hour while NBC (due to lesser value of the third and fourth hours of Today) brought in around $64 million per half hour. In 2013, the half hour news programs brought in $155 million for NBC, $135 million for ABC, and $116 for laggard CBS -- a dramatic increase over the morning rates (even if you assume those numbers ticked up a bit in 2013).
Nightly news might be a dying game with an aging audience, but it's still lucrative. If being on top means an extra $39 million, then you can see why inching closer to the top is important for ABC.
How we get news is changing, how it's paid for may change as well
The nightly news may be prestigious, but it's just a drop in the bucket of overall news revenue. As an industry, news in the U.S. generates roughly $63 billion to $65 billion in annual revenue, according to Pew Research analysis of official filings, projections by financial firms, and self-reported data. That's an estimate, but the numbers offer some context as to the business of news compared to other industries. The global video game industry takes in about $93 billion a year, Starbucks reported $15 billion in 2013 revenues, and Google alone generated $58 billion that year.
News still matters, and most newsgathering is still largely supported by advertising that is "directed to such legacy platforms as print and television and, secondarily, by audience revenues (mostly subscriptions)," Journalism.org reported.
That may be changing, however, according to the site's article The Revenue Picture for American Journalism and How it Is Changing:
Other ways of paying for news are becoming more visible. Much of the momentum is around this high-profile interest from the tech world, in the form of venture capital and individual and corporate investments, which bring with them different skill sets and approaches to journalism. Philanthropy is growing, too, particularly as a source of capital for regional and investigative journalism. These newer investments—many of which are 'unearned revenue'—do not yet represent a sea change in the business model. But they do signify a pivot in the news world. More than the sum of dollars and cents, this funding patchwork serves as a series of signposts pointing toward the ways journalism may be paid for in the years to come.
That does not impact the nightly news in a direct fashion, but the shift away from news being tied to watching a show at a specific time of the day is only accelerating. Nightly news has to get on that train or risk getting run over.
Nightly news may still be worth something
While the changing ways that people consume news and the inevitable loss of its aging viewers will hurt the nightly news programs, it's a little early to predict their demise. While younger viewers are a small part of the TV viewing picture for the news, the younger demo does go online to get news. All three networks have news websites offering 24/7 news; the value of their evening news franchises helps them to funnel users to those sites.
If young people choose Sawyer over Williams, it's logical that they will choose ABCnews.com over NBCnews.com if they decide to go to a dedicated news site instead of gleaning news off of social media. The hard news sites (including the networks, CNN, and other traditional outlets) do see viewership spikes both to their telecasts and website during news events, so there appears to be some value to maintaining a high-end news brand.
Sawyer and Williams may be expensive flagships who are fronting programs that are slowly fading into irrelevancy, but the networks should be able to leverage their nightly news brands into success in the digital world. That's not guaranteed in any way, but it is possible. Winning the ratings race in the 25-54 demo may eventually translate into who watched a news anchor on a digital platform during the next news event or tragedy.
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Daniel Kline has no position in any stocks mentioned. He rarely watches the nightly news. The Motley Fool recommends Walt Disney. The Motley Fool owns shares of Walt Disney. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.