AJR  Columns :     THE ECONOMICS OF TELEVISION    
From AJR,   October 1998

On TV, The LusterIs in the Cluster   

To attract advertisers, networks aim their shows at specific demographic slices.

By Douglas Gomery
Douglas Gomery is the author of nine books on the economics and history of the media     


Forget the image of the family crowded around the television set. Today's TV industry is best characterized by fragmented audiences, often with wildly different tastes, easily targeted by advertisers.

In the current media climate, cable television executives sell "demographic clusters" to advertisers: male-dominated audiences, for instance, for Comedy Central and ESPN; female-dominated audiences for Lifetime and The Family Channel.

Advertisers then pick the clusters that contain people who might be tempted to buy their products. In particular, advertisers reason the young (18- to 34-year-olds) are susceptible to persuasion, and so this fall one of the main TV battlegrounds will be Saturday late-night.

Madison Avenue has rediscovered NBC's long-running "Saturday Night Live" as college student-aged audiences have returned. Advertisers drool at this version of "appointment TV"--millions of regularly available, impressionable 20-something viewers who don't channel surf.

But rivals are hardly ceding this lucrative turf. This season, CBS is challenging SNL with the fireworks of Howard Stern. Indeed CBS, long stuck with the label of the "old folks' network," is using bad boy Stern to help recast its image and broaden its generational appeal. And its heralded new programs--three prime time comedies, four one-hours and the return of professional football--all aim to woo the under-35 crowd.

Yet no demographic cluster is very appealing to an advertiser if it doesn't have money in its pockets. Thus, the other key battle will be for the hearts and wallets of the affluent.

As a consequence, because advertisers love its relatively well-off audiences, "Dateline NBC" this season is set to expand to a fifth night. "Dateline" occasionally attracts more viewers than long-reigning newsmagazine champ "60 Minutes." Indeed, in April the advertising rates for the Tuesday editions of "Dateline" (at $149,000 for each 30-second spot) surpassed the average "60 Minutes" charge of $120,000.

"Dateline" also offers advertisers audiences divided by gender. For its new Wednesday edition, NBC plans male-oriented pieces on dangerous animals and risky adventures. When it's up against ABC's "Monday Night Football," "Dateline" regularly programs "softer" news aimed at women.

Television has always sought female viewers because research indicates women make the bulk of the buying decisions for their households. One need only look to the example of ice skating.

During the 1990s, TV screens have been filled with triple axels by figure skating rivals Tonya Harding and Nancy Kerrigan, Michele Kwan and Tara Lipinski. This season will have its share of made-for-TV skating championships, but less than in the recent past as ratings and interest seem to have peaked.

For males, the battle rages on the weekends. TNN: The Nashville Network, for example, will re-inforce an already strong weekend block of motor sports programming. "Race of the Week," "My Classic Car," "Shadetree Mechanic" and "Hot Rod TV" all lure men ages 18 to 49. This CBS-owned cable channel makes huge profits as advertisers--from soft drink and beer bottlers to auto makers--willingly ante up millions to sell their wares to young, male car enthusiasts.

Another key factor in flourishing on TV is ethnicity. A generation ago, one would have been mocked for predicting that by 1998 the top-rated TV station in a top-20 market would be broadcasting in Spanish. But that's what happened in February when Miami's WLTV finished first in the sweeps.

With the Spanish-speaking U.S. population on track to surpass African Americans as the nation's largest minority group within the next 20 years, advertisers have begun to rethink TV audiences. Some major TV markets, such as No. 7 Washington, D.C., do not make the top-15 list of Hispanic viewers, while San Antonio, 38th in overall market size, vaults to 6th in its number of Hispanic viewers.

There is an altogether different map for African Americans. Memphis ranks but 42nd among all TV households but jumps to 13th for African-American viewers. Seattle drops from 12th in overall market size to 54th.

Ethnic groups do watch different TV shows than white audiences. A February 1998 study by TN Media highlighted the disparity: While "Seinfeld" was the top-rated show among whites, it ranked a mere 54th in popularity for African-American audiences. By contrast, Fox's "Living Single" came in second with black audiences, but ranked 115th in white households.

As these numbers underscore, things are quite different than in the 1980s, when "The Cosby Show" ranked No. 1 in both black and white households.

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