Company Town : Troubles at CBS
Westinghouse Electric Corp. has its hands full in turning around CBS to justify its planned $5.4-billion purchase of the ailing network. The problems are even worse than when Westinghouse made its bid in August.
The Problems
* CBS is a distant third in the ratings and lags Fox in key demographic ratings that determine advertising rates. This fall, ratings fell even further as CBS’ core audience of older viewers tuned out the hipper programs the network scheduled in an attempt to reach the young viewers advertisers crave. Trouble is, those young viewers didn’t know to tune in to CBS for such highly touted new shows as “Central Park West,” the “Melrose Place” copycat that has yet to find an audience.
* Part of the ratings decline is a result of a weakened station lineup. In the past year, longtime affiliates in such key markets as Detroit, Atlanta, Cleveland and Milwaukee switched to Fox, forcing CBS to reach for weaker UHF stations in those markets. In Atlanta, for instance, CBS went from Channel 5 to 46. The percentage of households CBS reaches in Atlanta fell to the low teens from nearly 20%.
* The station lineup weakness and prime-time slump have hurt two bright spots in CBS’ schedule: “60 Minutes,” a top 10 show for more than two decades, is hovering at about No. 20 for the first time. Lacking the powerful carry-over audience from the National Football League games on Sunday afternoons, the program has fallen 17% in the ratings. “The Late Show With David Letterman,” lacking a strong promotional base in prime time, has lost its lead to NBC’s “The Tonight Show with Jay Leno.”
Possible Remedies
* A huge prime-time hit would be a good starting place for CBS. That would be the beginning of a platform to promote news, specials and shows airing on other nights.
* The network could rebuild its station group by buying or affiliating with stronger stations in key markets. That would be difficult to accomplish quickly, because most strong stations are tied up in long-term affiliation agreements.
* CBS could branch out into cable channels, which would spread the cost of its franchise and offset its dependence on a cyclical advertising market.
The Ratings Game
Legend and season-to-date* ratings:
CBS: 9.4
ABC: 12.0
NBC: 12.3
Fox: 7.3
* Through Nov. 5
Source: Nielsen Media Research
