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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 WILD56,18959,5333,3446.0%
BABY FIRST53,87856,9003,0225.6%
HBO34,36936,2241,8555.4%
VELOCITY71,27372,9391,6662.3%
BBC-AMERICA80,04480,4814370.5%
TNT90,58690,350-236-0.3%
USA91,72691,458-268-0.3%
FOOD93,06292,732-330-0.4%
BRAVO87,62087,284-336-0.4%
FX90,38989,933-456-0.5%
CNN91,79491,306-488-0.5%
TBS91,99591,504-491-0.5%
HGTV HOME & GARDEN91,16990,659-510-0.6%
E! ENTERTAINMENT89,88789,298-589-0.7%
NAT GEO CHANNEL89,86589,233-632-0.7%
WE TV86,60585,985-620-0.7%
A&E90,47889,716-762-0.8%
TRU TV87,20486,453-751-0.9%
HISTORY91,10790,303-804-0.9%
LIFETIME90,54489,612-932-1.0%
ESPN87,85986,721-1,138-1.3%
ID: INVESTIGATION DISCOVERY85,11383,922-1,191-1.4%
TLC90,21588,845-1,370-1.5%
DISCOVERY91,82990,375-1,454-1.6%
BET84,41582,772-1,643-1.9%
OXYGEN75,65173,909-1,742-2.3%
VH188,08586,039-2,046-2.3%
ANIMAL PLANET89,40687,031-2,375-2.7%
MTV88,13785,432-2,705-3.1%
TRAVEL84,86282,225-2,637-3.1%
SHOWTIME29,01428,091-923-3.2%
DISCOVERY LIFE47,01145,439-1,572-3.3%
OWN78,42075,612-2,808-3.6%
WEATHER84,68381,485-3,198-3.8%
COOKING64,59861,755-2,843-4.4%
OVATION47,60245,331-2,271-4.8%
SMITHSONIAN37,27535,241-2,034-5.5%
LOGO48,64645,960-2,686-5.5%
DIY58,79955,406-3,393-5.8%
AMERICAN HEROES54,55951,388-3,171-5.8%
FUSE64,77360,865-3,908-6.0%
REELZ65,45361,423-4,030-6.2%
VICELAND72,79868,108-4,690-6.4%
SCIENCE69,02464,284-4,740-6.9%
OUTDOOR38,68335,693-2,990-7.7%
DISCOVERY FAMILY62,87357,988-4,885-7.8%
LIFETIME76,42370,014-6,409-8.4%
DESTINATION AMERICA53,38847,947-5,441-10.2%
FYI64,65956,059-8,600-13.3%

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.