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Slumping NBC could drag down Channel 13

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Early ratings from the all-important May sweeps suggest WTHR-TV Channel 13's 15-year reign as king of local television news is secure for now. But the big test will come this fall when NBC's weakening prime-time lineup is expected to put the ratings crown in play.

The threat to the local affiliate will worsen in September when "The Jay Leno Show" becomes the nightly lead-in to WTHR's 11 p.m. news.

"'The Jay Leno Show' as a lead-in is an absolutely perilous situation for NBC affiliates," said Tobe Berkovitz, associate dean of Boston University's College of Communications. "No one really knows how the show will perform, but you can bet it won't do nearly as well as prime-time shows on CBS or ABC. And that could mean big trouble for WTHR."

WTHR's plight—and efforts by other stations in the market to overtake it as the ratings leader—has ratcheted up interest in this May's Nielsen Media Research sweeps period.

Advertising during local newscasts comprises 40 percent to 60 percent of a local affiliate's revenue. The price charged for advertising is a reflection of the number of viewers, which makes Nielsen ratings for newscasts especially important. This year's sweeps began April 23 and run to May 20.

"We're watching this situation closely," said Bill Perkins, longtime local media buyer and president of Perkins Nichols Media. "You do get the sense that things could be in somewhat of a state of flux."

On the late-night front, WTHR is holding its own, with its rating through the first 10 days of this year's rating period up slightly over last year's May sweeps. Meanwhile, its competitors—with much-higher-rated lead-in shows—have stumbled.

But WTHR also is facing a challenge with its late afternoon news. Ratings for its lead-in show, "The Oprah Winfrey Show," have fallen 20 percent in this market.

"We realize we have a big hill to climb, no question," said WTHR General Manager Jim Tellus. "Right now, NBC is a third-place network, sometimes fourth. But we're not cutting back on any of our local news coverage, and we think that will help carry us through."

For the 5 p.m. news, WTHR's ratings have dropped from 10.0 during the 2008 May sweeps to 8.7 so far this year. Each rating point equals about 10,720 central Indiana households. WRTV and WISH also have seen ratings drops this May, but not as big as WTHR's. Still, WTHR's rating almost equals WRTV and WISH combined at 5 p.m. The trend for WTHR at 5:30 p.m. is similar.

The importance of the situation hasn't escaped WTHR officials.

"The May sweeps is the most important sweeps period," Tellus said. "Our sales staff will use these numbers to sell for a full six months."

The next significant ratings period isn't until November. And those results won't be known until December.

NBC's decision to launch the hour-long Leno show at 10 p.m. and the uncertainty of the network's six other prime-time shows set to debut in the fall has made this May even more important for WTHR, industry experts said.

"You'd think this summer would be a time for WTHR to really build on their brand, and that starts with this sweeps period," Perkins said.

For NBC, moving Leno from his current spot after the local news to the slot right before it makes solid financial sense, Berkovitz said, because producing a talk or variety show is about one-fourth the cost of producing a scripted drama or sitcom. Conan O'Brien will succeed Leno as host of "The Tonight Show."

But since shows like Leno's are usually front-loaded with the most popular guests, industry observers wonder if ratings for the show will drop during his last half hour.

"That could be a real problem for WTHR, because there is a tremendous amount of carryover for your late night news from the lead-in programming, even more so than for the early evening news when people are first turning on their sets," Berkovitz said.

With CBS's and ABC's prime time line-ups both earning consistently higher Nielsen ratings over the last two years, advertisers and media buyers are on alert. The recent Leno announcement has ratcheted up the alarm.

CBS's CSI shows regularly earn ratings in the 10 range, while most media experts expect Leno to earn ratings closer to 5.

Media experts said WTHR has two things in its favor: a strong brand for its local news shows, and a parent company that has proven its willingness to outspend the competition.

"Most of these stations are owned by highly leveraged publicly traded companies," said Bob Gustafson, Ball State University journalism professor. "They can only afford or are only willing to spend so much on the local news."

WTHR's parent company, Columbus, Ohio-based Dispatch Broadcasting Group, is a relatively small, family-owned operation, Perkins added. Many media buyers expected WTHR to cut its news budget when Dispatch suddenly parted ways with WTHR General Manager Rich Pegram in late 2007.

"Nobody knew what to expect when Tellus came in," Perkins said. "But they've maintained their commitment to local news, and I think that commitment has helped them keep their brand really strong."

WTHR is somewhat of an anomaly among NBC affiliates.

"A lot of NBC affiliates are being hit a lot harder than WTHR," Berkovitz said. "Those stations' local news are taking a serious punch. They've seen revenue declines as a result."

NBC affiliates aren't the only ones seeing declining ratings. As cable and satellite TV networks continue to add channels, and technologies such as the Internet and Tivo proliferate, ratings for most stations have declined in the first part of this sweeps compared with the last sweeps period.

Ratings from the first week of this year's May sweeps are down 5 percent to 12 percent across all local TV news time slots compared with the May 2008 sweeps.

And the economy hasn't helped. Virginia-based BIA Financial Network predicts TV ad spending in the Indianapolis market will decrease from $197 million in 2008 to $157 million this year.

"The industry is changing, and to survive, you have to run as much original content as possible," said WXIN General Manager Jerry Martin. "Local news certainly falls into that category."
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