CBS Finds Success in Original Formula

This was supposed to be the year that network executives burned their rule books.

Several network titans proclaimed last spring that the TV industry’s traditions and economic model were as dated as episodes of “Dallas.” Viewers, they said, crave sizzle! Fewer reruns! And 52 weeks of original programming!

Leslie Moonves, co-president of Viacom Inc., apparently didn’t get the memo.

Good thing.

Moonves’ CBS network currently boasts seven of the top 10 shows among the audience that advertisers prefer most: 18-to-49-year-old viewers. That’s quite a feat for an operation long derided as the “geezer network” because of its older-skewing audience.

Instead of concentrating on younger viewers, Moonves continues to champion the old-fashioned model of a broadcast network as a “big tent” that attracts all viewers. So far, CBS is the only network this summer to post ratings gains, albeit a modest 4% compared with the same period last year.

“It’s pretty amazing,” Moonves said this week. “We’ve been the most conservative, but quality programming and slow and steady win the race.”

General Electric Co.’s NBC -- while maintaining its first-place mantle in the key 18-to-49 demographic group -- is down 13% over last summer. News Corp.’s Fox Broadcasting Co. is down nearly 20%. Walt Disney Co.’s ABC network is off by about 4%, and its losses could have been even larger if not for the well-watched matchup between the Los Angeles Lakers and Detroit Pistons in the NBA championship.

What’s more, in a summer when other network executives have been grateful to have their ad revenues remain flat rather than decline, CBS has been muscling prime-time rate hikes of as much as 10%.

“CBS is standing pat with the old business model, and it’s working,” said Brad Adgate, research director for advertising firm Horizon Media.

Advertisers are continuing to closely watch the summer showdown to help handicap the fall season, when more money is at stake. Advertisers are betting that when the new season begins in September, CBS will make an even bigger ratings surge.

Unlike its more flashy rivals, CBS has stuck with reruns of its established shows this summer, such as “CSI: Crime Scene Investigation.”

And instead of experimenting with new unscripted offerings, Moonves opted to bring back some favorites, “The Amazing Race” and “Big Brother.” New installments of those shows quickly scored well with viewers.

By comparison, rivals have launched new shows, including “The Jury” on Fox, “Next Action Star” on NBC and “The Ultimate Love Test” on ABC. Some have failed to stir viewers’ passions.

“In a risky and inconsistent business, Les Moonves has been the most consistent,” said Bill Cella, chairman of media-buying giant Magna Global USA. “He gets it.”

As a result, Moonves has ensured CBS a profitable year.

The TV business has long been built on a simple financial formula.

Networks order a season’s worth of shows -- typically 22 episodes -- and run each episode twice during the year. On the first airing, the network recoups the fees it pays for the shows by selling advertising time. On the second airing, the network rakes in the money.

But in recent years, network executives have watched a summer exodus of viewers who turn to cable channels rather than watch reruns.

Executives have found that even their most critically acclaimed dramas, such as NBC’s “The West Wing,” ABC’s “Alias” and Fox’s “24,” don’t repeat well. That has prompted some network chiefs to respond with year-round programming spiced up with “reality” shows.

But, Moonves said, that “trend might not be working out so well.... The cost model doesn’t work if you have too much original programming in the summer. Advertisers don’t pay as much for time in June and July as they do in October and November.”

In addition, Moonves said, “reality programming ain’t as cheap as it used to be.”

Fox launched six shows in June, but only the Paris Hilton-Nicole Richie cross-country caper “The Simple Life 2: Road Trip” has become a hit. And shows that Fox executives had been planning to stretch into the fall have already fizzled in the ratings.

Fox has already canceled “The Jury” and will soon end its new Las Vegas-based reality show, “The Casino.” Fox hasn’t delivered a verdict on its new scripted show “North Shore,” which it bills as “sun, surf, sand and sex” at a Hawaiian resort. The show has produced ratings 15% lower than those of the reality shows in the same time slot last summer.

Fox Entertainment President Gail Berman conceded that her network’s results had been mixed, but Fox never said it would be easy to introduce so many shows in the summer.

“We are forging ahead in uncharted territory,” Berman said.

NBC blames its summer swoon on the loss of “Friends” and not some flaw in its year-round strategy.

Ratings for reruns of the hit comedy, which ended its run in May, have been down nearly 35% compared with last summer. NBC experienced similar declines after the finales of “Seinfeld” and “Cheers.”

“When those shows are over, they’re over,” said Jeff Zucker, president of NBC Universal Television Group.

CBS’ higher ratings have been driven by a mix of proven shows.

CBS executives say its strategy to rely on reruns in the summer helps recruit new viewers.

For two summers now, CBS has watched the ratings soar for reruns of Thursday’s 10 p.m. missing persons drama, “Without a Trace,” which launched in fall 2002 in the shadow of NBC’s ratings giant “ER.”

The program showed a 19% ratings increase over last year among 18-to-49-year-old viewers. This summer, among all viewers, “Without a Trace” reruns have been beating “ER” reruns by more than 7 million people.

CBS’ newfound strength in the 10 p.m. hour is helping to boost the fortunes of CBS-owned TV stations by funneling more viewers into the 11 p.m. newscasts.

Stations make most of their money from local news. KCBS-TV Channel 2 in Los Angeles, for example, has seen its 11 p.m. news ratings grow 8% compared with last summer.

Moonves said other networks could try to rewrite the rules of the business all they want.

But, he said, “the system is broken only if your shows don’t work.”

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Summer hits

CBS is scoring among 18- to 49-year-old viewers, who advertisers covet most, with seven of the top 10 shows in that age group.

Viewers aged 18-49 (In millions)

The Simple Life 2 (Fox): 6.08 CSI (CBS): 5.89 CSI: Miami (CBS): 5.65 The Amazing Race 5 (CBS): 5.53 Last Comic Standing 2 (NBC): 5.29 Without a Trace (CBS): 4.90 Two and a Half Men (CBS): 4.87 Big Brother 5-Tues. (CBS): 4.85 Law & Order (NBC): 4.78 Big Brother 5-Thurs. (CBS): 4.75

Ratings are from May 31 to July 11.

Source: CBS