Broadcast Rat Race Week 1: “Blindspot” a Bright Spot, “The Muppets” Makes a Splash, “Minority Report” Looks Grim

I’m introducing a new feature on Da Blog, adapting the Renew/Cancel Index used by TVbytheNumbers the past few years to predict the fates of scripted shows on broadcast television. The basic formula involves taking the average live+same day 18-49 ratings of each show and dividing by the average of all scripted shows on that network. Shows above about .85-.9 generally get renewed, those below .7-.75 generally cancelled, with shows on Friday getting about .2 leeway given the lower ratings on the night.

The adaptation I’ve made is an attempt to address two related issues: first, shows could premiere to great ratings and then crash through the floor in subsequent episodes, resulting in the Index’s prediction adjusting to the show’s post-crash level faster than the Index number can catch up to the show’s new level. Second, the Index has generally reset at midseason, with the index numbers only factoring in shows’ performances in the new year, indicating that decisions on the renewal or cancellation of shows tend to weight ratings later in the season more heavily, if they don’t ignore fall ratings entirely. To address these, my Index is calculated by averaging each show’s most recent rating with the previous week’s average, so after the first two episodes the show’s average 18-49 rating is what gets divided by the network average, but after three episodes the third episode’s rating is averaged with the average of the first two episodes, so each episode counts twice as much as the one before. The network average is calculated normally. This isn’t a perfect approach, as it doesn’t really solve the first problem until at least the third episode and may overcorrect for the second problem, but most shows eventually find a level and put forth fairly consistent ratings for the latter part of the season.

Although 18-49 ratings are the main factor that goes into whether a show is renewed or cancelled, they aren’t the only one, especially for shows in the in-between range, although the other factors are pretty much all based around various business relationships and concerns and most of the other things that get bandied about in the media are ultimately irrelevant. Most obviously, a show that is produced in-house will generally get the edge over a show that isn’t, but one of the biggest factors in the fate of shows, especially veteran shows, that doesn’t often get talked about is the economics of the syndication market, which results in most shows being able to be broken down into a few categories based on their age, very few of which make it to the latter stages, which are affected by the index differently.

  • Rookie shows could conceivably get an index number anywhere on the scale, since the network has picked them up without having any past performance to work off of. Most rookie shows are only ordered for around 13 episodes, not the usual 22, and must earn their “back 9” orders based on their early ratings. Most shows with index numbers below .5 are rookie shows, and a show that does that poorly could well be cancelled after a handful of episodes, with the remainder of their initial orders being burned off in summer and/or on Saturdays (although networks may be moving towards letting them finish their initial orders no matter what). On the other end, rookie shows are particularly likely to have inflated premiere episodes, so rookie shows whose premiere ratings put them above the in-between range may be noted as being “Too Early” to call their fates. This year’s rookies, at least among shows premiering by the end of this week, are “The Muppets”, “Blood and Oil”, “Quantico”, “Dr. Ken” (ABC); “Life in Pieces”, “Limitless”, “Code Black” (CBS); “Blindspot”, “The Player” (NBC); “Minority Report”, “Scream Queens”, “Rosewood”, “Grandfathered”, and “The Grinder” (FOX).
  • Sophomore shows, that is, shows in their second season or otherwise finishing the season with less than 60 episodes, have established their security over the course of an entire season and thus enter Season 2 with a full 22 episodes to play with. Their performance generally only determines what their fate will be in May when the network makes their decisions for next year. “Fresh Off the Boat”, “black-ish”, “How to Get Away with Murder” (ABC); “Scorpion”, “NCIS: New Orleans”, “Madam Secretary”, “CSI: Cyber” (CBS); “The Mysteries of Laura” (NBC); “Gotham”, “Empire”, “The Last Man on Earth”, and “Sleepy Hollow” (Fox) are in this category.
  • Things start getting interesting for shows on the syndication fast track. When a show is within a season of the magic number for syndication (generally assumed to be 88, or about four full seasons, although that number may be dropping to the low 70s), the production company will do everything in their power to get the show the additional season they need to get over that magic number. Thus, shows that will finish their season (usually the third) with a season’s worth of episodes left to hit 88 are all but guaranteed to get the fourth season they need to get over the hump. It isn’t quite a guarantee, especially for shows that aren’t produced in-house given “The Mindy Project” was cancelled after three seasons last year and had to finish its run online, but it is a force unstoppable enough that TVBTN predicts certain renewal for every in-house show in this category. I don’t go that far, but shows in this category do start out with the color of “probable renewal” in their prediction column before they premiere, and thereafter are placed one color rank higher than their index number would otherwise suggest; in-house productions may never fall below “probable renewal”. “The Goldbergs”, “Agents of SHIELD” (ABC); “Chicago PD”, “The Blacklist” (NBC); and “Brooklyn Nine-Nine” (FOX) are all shows premiering by the end of this week that are on the fast-track; “Sleepy Hollow” is not, despite being in its third season, because it’s a half-season-long “limited series” whose shorter episode orders don’t put it in range. (CBS isn’t devoid of fast-track shows, but “Mom” doesn’t premiere until after Thursday Night Football ends.) On the other hand, I may be a teensy bit more likely to predict cancellation for non-in-house shows on the lower end of the in-between range that would enter this category next season.
  • All other shows are veteran shows, which for my purposes are all shows that have gotten over the 88-episode hump for syndication, or are in the process of doing so. These shows could still be cancelled, but especially for in-house shows, the terms of the syndication deal can matter as much if not more than the show’s ratings in going into the decision. A network could very well keep a marginally-rated show on the air in order to pump out more episodes to feed the syndication pipeline. As such, the “probably cancelled”, in-between, and “probably renewed” ranges extend a bit further down than in the first two categories, and predictions for these shows are much more of a crapshoot in general unless they have ratings good enough for renewal in their own right. The renewal and cancellation of rookie and sophomore shows can be reasonably reliably predicted based on their ratings and who produces them; if a bunch of veteran shows are all on the bubble, nothing you do is likely to be much more accurate than guessing, which also makes it harder to predict the fortunes of young shows.

How to read the chart: First box shows current time slot, second box current season number. Eps: Total number of episodes aired / total number of episodes ordered (if known). Last: 18-49 rating of the most recent episode. Raw: Average of first-run 18-49 ratings. Adj.: Average of the most recent episode and the previous Adj. rating. RawIdx: Raw divided by the network scripted show average. Index: Adj. divided by the network scripted show average. In general, >1.1=certain renewal, .85-1.1=probable renewal, .7-.85=on the bubble, .6-.7=probably cancelled. Anything substantially less than .6 for rookie shows indicates a dead show walking. Prod: Production company that produces the show (ABC=ABC Studios, CBS=CBS Television, Fox=20th Television, NBCU=Universal Television, Sony=Sony Pictures Television, WB=Warner Bros. Television). Asterisks indicate co-productions distributed by company shown. Incorporates ratings through Sunday, September 27; write-ups do not take into account Monday’s ratings or news. Network averages used: ABC 2.15, CBS 2.12, FOX 2.06, NBC 1.86.

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An Open Letter to Steve Ballmer

A while back I heard that you had rejected a $60 million dollar offer from Fox Sports to renew their contract to show Clippers games and were considering setting up your own streaming service.

I can’t say I’m terribly surprised. You leaped pretty much directly from being the CEO of Microsoft to owning the Clippers. At Microsoft, you’ve been immersed in the pace of technological change and the increasing role computers have played in our lives for virtually the company’s entire ascent; once in charge, you saw a path for Microsoft to remain relevant in a tablet world, a path that gave Microsoft its biggest OS embarrassment this side of Vista (also released during your tenure) in the short term but which Apple recently affirmed the wisdom of. You already dipped your toe in the streaming-video revolution with the XBox. You see the direction technology is going and the revolution that is already upending the cable industry and the business model Fox’s RSNs run on, and you want to blaze a trail with a new business model in a territory you’re more familiar with than any other owner of a professional sports team not named Paul Allen. You want to set the course for the professional sports team business model of the future that teams around the country hope to follow. So what’s the best business model to go with?

Let’s say you decide to put up a paywall and offer Clippers games as a subscription service. A source quoted in the New York Post thinks you could make up for the money lost by not taking the Fox deal by selling subscriptions for $12 a month to 500,000 homes. Without even looking I’m pretty confident in saying the average audience for Clippers games on Prime Ticket isn’t even a third of that as it is. So let’s assume that, regardless of price, the most households you can get to subscribe to a service that’s offering just Clippers games is 150,000. To make up the $60 million Fox is offering, you’d need to charge $400 a season. Even at $35 a month, that’s going to cut off a substantial number of households that can’t afford that much, forcing you to increase the price higher, forcing more homes out of the service, and so on. That’s before production costs Fox would have covered as well as the costs of hosting the games on your server and sending it out to customers.

Okay, so you don’t care about how profitable the deal is in the short term; you’re getting out in front on a business model that’s more sustainable than what Fox has and you want to control it all yourself. So long as it’s profitable or even takes a loss in the short term, you’re building a streaming infrastructure you can sell out to other teams and taking in all the advertising money instead of letting Fox take it. But even with all that, there’s another, deeper problem. LA is a frontrunning town to begin with, and despite your recent success and the Lakers’ recent floundering, you’re still very much the #2 team in LA, with even record low Lakers ratings not being enough to fall behind the Clippers. The Clippers aren’t even like most other places with two teams in the same sport (including LA’s baseball and hockey teams) in that they don’t draw from any particular geographic area; no one, I suspect, is truly a diehard Clippers fan, they just follow the Clippers because they can’t bring themselves to root for the Lakers. (In other words, most of your fans are probably Bill Simmons-types, in that they’re expatriates from other places who hate the Lakers too much to shift their allegiance to them but still want to see basketball games regularly as long as they’re in LA.) Donald Sterling’s decades of incompetence isn’t going to be washed away overnight; as successful as the Clippers have been in the last few years of Sterling’s tenure and the start of yours, it’s going to take many, many years, maybe generations, to build a fanbase that’ll follow your team through thick and thin, and that assumes nothing goes wrong in the meantime, that the Clippers will remain as successful and attractive as it is today. Your reign has already shown signs of mismanagement of its own, even if not at Sterling levels; what happens if Jimmy Buss gets forced out somehow, either relinquishing control of the Lakers to the more competent Jeanie or outright selling the team?

You’re counting on the team being and remaining attractive enough that people will pay up to see your team’s games that aren’t on national television. If the team starts to fall back to earth, people will cancel their subscriptions and you’ll have less revenue, and it’ll be that much harder to get back to where you were before. To those people, your team will become all but invisible, even further out of the LA sports conversation than under Sterling, and it’ll be that much harder to get those people back if the team does get good again. That’s before even considering all the fans you’d be pricing out of the market to begin with, or the casual fans who won’t elect to pay you for games they might not watch that much of and whom it’ll be that much more difficult to turn into hardcore fans who will pay.

Okay, so let’s say you go in the complete opposite direction and offer Clippers games to everyone in your television territory for free. You could even go one step further and offer Clippers games to everyone period for free, and try to build the team up as “America’s Team”, but the NBA is likely to frown on that; you’d be undercutting the NBA League Pass package and the RSN deals of all your opponents. So let’s just restrict it to your TV territory for now.

According to the Los Angeles Times, last season Clippers games averaged a 1.04 rating on Prime Ticket, a decline from either 1.25 or 1.27 the previous season. That means 1.04% of all television households were watching a Clippers game at any given time over the course of the season. That may not sound like much, but during the 2014-15 season the Los Angeles market boasted 5.5 million households with television. 1.04% of that number is a little under 58,000. Since you’re offering games for free to people who may have cut the cord, we can assume the number could climb a little higher; 1.25-1.27% would bring the number to around 70,000, but for particularly attractive games the number could top 100,000. Are you ready to provide the infrastructure required to deliver Clippers games to 100,000 devices at once, without buffering, lag, or other problems, especially as audiences demand better picture quality through technologies such as 4K? Can you handle the even larger audiences that would come with an “America’s Team” strategy?

This is why the prospect of streaming disrupting the live-event market in the way it’s disrupted the market for on-demand shows has always been overblown. The true reason sports has become so important to the linear television industry is that it’s the one place where linear television’s strengths shine – its ability to scale to deliver content to many people at once. That doesn’t mean you aren’t smart for blowing off Fox – they can only pay you $60 million because they charge hefty subscription fees to every household in the LA area that subscribes to cable, and if only 70-100,000 of them watch Clippers games (and it’s not like the Kings, Ducks, and high-school and lower-tier college sports are that much more popular), the rest of them aren’t going to take it much longer, and it won’t be long before that $60 million rights fee evaporates. Does that leave you completely trapped? Is there a way forward towards pioneering a new sports-rights paradigm for the twenty-first century suited for the challenges inherent in it?

Yes, and it’s a decidedly retro one: sign a contract with a group of broadcast stations.

Due to its size and relative isolation, Los Angeles has pretty much the most broadcast television stations in the country, even if a good number of them are foreign-language and other multicultural stations. Leaving aside the Big Four affiliates, KTLA, KCAL, KCOP, and KDOC are all general entertainment stations with histories with sports, and the first three have all aired Clippers games at various times in the past. As has always been the case all over the country when broadcast stations have aired local sports, they never aired more than a small smattering of Clippers games, which opened the door for regional sports networks to take the rest and, in most cases (including the Clippers), ultimately take them all. For this strategy, which is also a strategy for the very survival of broadcast television itself, that’s going to have to change.

The key is that, in the long term, this strategy is really a modification of the offer-games-for-free strategy, except it’s moving the delivery mechanism to one that’s better suited to the task, one that can better handle large audiences tuning in for at least the highest-demand games, and one that requires considerably less expenditure on infrastructure to start. You’re still producing the games yourself and controlling their distribution and advertising revenue; you’re simply syndicating the games to broadcast stations within your TV footprint as a means to manage demand while maximizing exposure, giving stations control of a small percentage of advertising in the process to target their specific markets. Selling advertising on the traditional linear television model may give you the chance to increase ad rates compared to the usual online model of serving up custom ads based on users’ personal information, a model there’s a lot of resistance to.

The amount broadcast stations can pay you will probably still be inflated by the cable bundle as stations hope to use Clippers games to maximize retransmission consent revenue, but if there’s no major change in the regulatory environment in the near term and cable operators continue to try to prop up their subscriber numbers with “skinny bundles”, that market may remain intact for longer than you think, or at least longer than the RSN market will. Moreover, in the long term linear television of all stripes, broadcast and cable, will be as much a demand-management mechanism for broadband providers as anything else. A typical optical node on a cable operator’s network, which serves as the last relay point before reaching individual households, serves 500-2000 homes, according to Wikipedia; even on the low end of that scale, if 1.04% of those homes are trying to watch a Clippers game that amounts to at least five households, which may not sound like much but which means serving them all with a single linear television stream could reduce the bandwidth demands to a fifth of what they would be otherwise. With continued technological development, especially the advent of ATSC 3.0 which should be finalized by this time next year, you should be able to reach a wide variety of devices with a bare minimum of need for the Internet to deliver video, including being able to reach mobile devices without needing to use viewers’ data plans or going through wireless carriers, something a cable network or streaming service can’t do. People could use any Internet-capable device, including what we call a television today, to watch the game directly from the broadcast signal (or a relay thereof sent over Wi-Fi) while going through the Clippers’ web site.

Of course, all this assumes the broadcast stations in question are even interested. KCOP is owned by Fox, the very same entity whose $60 million offer you rebuffed, and they are not going to take part in undermining their RSN hegemony and substantial investment in cable networks – unless you convince them that that hegemony and those cable networks are going to crumble anyway and at least this allows them to get a piece of your streaming plan and salvage something from the ashes. CBS, which owns KCAL, might be more receptive but has enough cable dreams and investment in retransmission consent of their own to be hesitant. KTLA might have a different problem – the prospect of regularly pre-empting CW network shows – and would only really be an option to the degree we’d like if the CW shuts down or Tribune no longer takes part in it, and KDOC is the smallest of the four stations we’re considering, and might well put up its spectrum for bid in next year’s incentive auction. But that just underscores the importance and impact what you do could have on two industries – and the urgency of it. We already know anything other than the traditional RSN model will help set the tone for the local sports media landscape of the future. But signing up with a group of broadcast stations won’t just establish an infrastructure that might be, technically, the best one available, one with direct and indirect benefits to numerous parties. By pointing the way forward to an era of increased importance and relevance, it might just save the broadcast television industry from itself.

Football season approacheth!

I suppose I should probably get this site ready for football season. To be honest, I’m tempted to stop following the lineal titles; I haven’t done anything with them outside of these introductory posts in a few years and here I am putting up this post with the start of the college football season literally hours away. Besides, the advent of a true college football playoff makes those titles more likely to see unifications and less likely to see split titles in the first place and thus less fun. But we charge forth into the breach regardless.

(I’ve had a few people ask me on Twitter when the Flex Schedule Watch starts. It has always started four or five weeks into the NFL season, whenever CBS and Fox’s protections are due.)

The NFL title is pretty straightforward, bouncing around a few different Western teams over the course of last season before winding up back with the Seahawks heading into the playoffs; I’ll be tracking a “DeflateGate” title that remains with the Seahawks. On the college side, Florida State went undefeated until the Rose Bowl so Ohio State starts the season with the 2006 Boise State title; Michigan State lost 2009 Boise State to Oregon in their second game of the season, but after Oregon lost to Arizona the title bounced around the Pac-12 for a while and never made its way back to Oregon, ending the regular season with Washington, so it starts with Oklahoma State and could be unified with Princeton-Yale, now in the hands of TCU (although TCU has to avoid losing to Minnesota first).