The Downhill Slide of The Evening News

Reports this week that NBC Universal is cutting 700 jobs—mostly in the news division—could hardly come as a surprise to anyone who has been following the trends. Falling ad revenues and increased competition from both cable and online sources have exacted a toll on all the network news operations. The State of The News Media 2006 annual report from the Project for Excellence in Journalism clearly illustrates the problem.

Total viewership for the combined nightly broadcast news hit a peak way back in 1969 and has consistently fallen since that time. The audience loss accelerated in 1980 with the launch of the Cable News Network (CNN). Today, there are about half as many television viewers watching the Big Three evening news as there were back at the beginning of the ‘80s. And the loss appears to be accelerating.

The reasons for the decline are detailed in the State of The News Media report. Major factors include:

• Competition from immediate, “always-on” sources for news including the Web and full-time networks such as FNC and CNN.
• Younger television audiences have become accustomed to getting their news in shorter segments and from different sources (the average age of the Big Three’s nightly news audience is 60).
• The reluctance of network execs to take risks on new solutions (younger anchors, different formats) in the face of these substantial declines.

The story about the job cuts at NBC also point to another reason behind the layoffs: the growing need to reorganize for a digital broadband future. NBC decision-makers have seen the writing on the wall in Google’s purchase of YouTube and New Corp’s (the parent company of Fox News Channel) acquisition of MySpace. Targeted broadband channels can be created and implemented with less cost and risk than is associated with major television programming. The networks have always been major content producers, and with broadband, they can make that content available 24/7 and look for new opportunities to sell advertising. That probably appears to be a viable option in the face of reduced advertiser demand for broadcast television time.

The NBC Universal announcement won’t be the end of realignment at the Big Three. Adjustments to the new order at ABC and CBS may be less cathartic than what happened at NBC, but all the networks will need to change substantially if they are to stay relevant and continue growth.