CBS And NBC – Competition As Viewed In Ratings Battle And Marketing Strategy

CBS And NBC – Competition As Viewed In Ratings Battle And Marketing Strategy Essay Sample

The manner by which information was being demanded and transferred from source to receiver experienced an important change when technology made it possible for the creation of newspapers, television and the radio – the three important vehicles for mass media. Television, in particular, experienced not just technological growth but as well as an increase in social significance.

Television became responsible for the change in the social behavior of many individuals and because of this, television owners were dealt with bigger and bigger responsibility, not just to its audience but to itself as well. Networks expanded and network wars came to life, with every network trying to outperform rivals with better shows. Many entities joined this battle, and today, two of the constant participants in the active network war for audience share include CBS and the National Broadcasting Company or NBC.

NBC was formed in 1926, one year older than the origin of CBS (1927). Throughout its history operating as a broadcast entity, it managed to amass several stations which it currently owns and operates while at the same time maintained affiliate relationship inside and outside US soil. The original focus of NBC as well as of CBS was news reporting through radio but soon expanded to television operations and most recently, with activities that depend and involve the Internet.

NBC and CBS shows and programs are seen in Asian and European territories; some shows have localized translations or have subtitles so that viewers who cannot speak English can still appreciate and enjoy the program. NBC is one of the leading networks before other networks dethroned NBC for the crown, and that includes networks like CBS and ABC.

How they survive network competition is characterized by their business strategy and how they react to the changes that happen not just on the viewers but on other aspects as well (socio-political, technological etc). CBS and NBC are two of the most popular networks today because of the shows that they featured.

            Ever since CBS and NBC managed to establish itself as two of the most prominent broadcast networks in the country, the ensuing competition that was presented between the two networks was always been tight, and neither CBS nor NBC was willing to yield to the opposition. Competition was one of the important aspects of the relationship that CBS and NBC shared, and both networks attended dutifully to the rigors brought about by the presence of competition.

Deanna Myers admitted to the presence of a competition that is getting stiffer and stiffer by the day. In a news article about how NBC was losing still nearing the close of 2005 to the shows of ABC and CBS, Myers was quoted by reporter La Monica (par. 8) as saying that ‘there is too much competition now’ that even the day and timeslot that NBC used to rule – Thursday night – is now being dominated by the top two networks at the time, ABC and CBS, respectively.

Thesis statement – The thesis statement of this paper therefore is this – that the competition that is existing between rival broadcast companies NBC and CBS forced both companies to resort to several marketing strategies as well as business plan re-evaluation to ensure the dominance of a particular network via the maximization of new fields like the use of the Internet, mode of transportation, fixed locations and the different types of mobile gadgets that can increase the visibility of the shows of both NBC and  CBS, with both networks not knowing that in the process, the people whom they are trying to please, the people that they want to please because these are the people that will catapult them to the top of the ratings, end up confused and negatively affected by the motions that each network is taking, making the efforts sometimes bordering excess and is characterized by foolhardiness especially for ventures that are experimental on the part of the network. At this juncture, can anyone really point out who between NBC and CBS was more successful in drafting action plans that have kept them in control of the viewership they are all jostling for?

Cheng, in a news report about NBC which was published in the Internet, commentated on this particular attitude of NBC in particular. Cheng criticizes the fact that NBC cannot seem to make its strategies simple and free from complexities that seemed to be the cause of trouble for NBC in the long run (Cheng 6).

To prove the point that what NBC was doing was unnecessary and detrimental for the company in the long run, Cheng kidded that NBC’s sureness in steps taken made it resort to ‘launching new ideas’, which according to Cheng, is something that happens more often than the frequency of Internet users upgrading their computers. It was a statement directed at pointing to the fact that like the spacing of the time that is necessary and practical for the upgrade of a computer, NBC should also take heed that it should allow for a considerable amount of time so that the people can get used to new schemes and features that NBC offers its clients before it changes the direction of the eyes of its customers and give them something new even before they were able to fully digest and understand the previous NBC-sponsored amenity.

Battle for Ratings – Indeed, network personalities like programs anchors and top management executives understand that the continued tightening in the competition for ratings, patronage and visibility maybe a very problematic point of concern for the network bosses and top men and women, but it is something that in the end benefits the viewers. This was the opinion of Brian Williams in an interview published in the Internet. Competition, and its toughness, was the reason why his show in NBC was losing what it previously enjoyed, ratings wise, yielding to the rival ABC. Thankfully, CBS, another rival of NBC, was at third with its own show that shares the same timeslot as that of William’s program.

NBC’s history of ratings woe is not just limited on its news shows though. In 2004 Bauder reported that it also showed a weak performance in the shows and airtime slots targeting the 18-49 year old audience when NBC found itself weak in the standings without its Friends to help out, literally and figuratively (many believe that Friends was one of the reasons NBC made it to the top of the rating before, but without Friends, NBC was being outmuscled by two of its rival companies). In this particular battle, ABC was, at the time, the clear top winner in the podium followed by CBS, which was fueled by the ratings performance of its shows including Without A Trace and CSI: New York.

Because of these ratings problems, NBC was also reeling from the impact this have on other important facets of running the network, including the effects of poor rating in the  profitability of the company. During the 2005 slide of NBC from the top position in the ratings battle, there was a decrease of .9 billion when it comes to comparing the figures on advertising sales generated in 2004 and 2005 (2.9 billion and 2 billion respectively).

NBC is no stranger to the reason why they need to be consistently in search for new and innovative ways to ensure that there audience remains glued to their programs – and that is the ratings. In its history, some of NBC’s programs experienced a dip in ratings and serious dents when it comes to looking at the number of people missing in the audience count. This happened to NBC’s Nightly News three months later Williams replaced former host Tom Brokaw, to a tune of nearly three million viewers.

Certainly, the absence of big named personality is not the reason for the decline of the ratings and popularity standing of the shows of NBC and the weakening of the market share of NBC all in all. They have popular personalities in what was conceptualized as a very interesting story, only to boil down and surrender to rival shows. Martha Stewart and her presence in the apprentice was not enough to give NBC the ratings lift by the start of the final quarter of 2005.

If that is not the case, then maybe the reason is not just found in NBC’s programming, but also in the manner by which it conducts its strategies and how the people reacts not just to NBC’s programs but to the manner by which NBC was doing business that has a significant effect in the positioning of NBC and CBS when it comes to competition analysis.

Integrating New Media – Both companies are aware of the fact that television is no longer the reigning medium for mass communication, as the Internet is slowly chipping away at the audience share that television previously had. Before the coming of the Internet, people are dependent on the television as well as in newspapers and in radio for information, but when the Internet proved to be a media capable of doing what the three forms of mass communication did in the past, companies like NBC are already making sure that they are making good use of the new technology to their advantage.

While NBC will not directly admit that the move to integrate the Internet technology and Internet-dependent information dissemination is more of a move to rake in more money and become a more stable mass media company, the public seemed to be less concerned with whether or not it is true, since people generally see the move to integrate new technology to previous technologies for mass information as a good thing that will, in the end, benefit all of them.

In a news about the partnership that NBC and Netflix entered upon sometime in the last quarter of last year, Frances Manfredi, who at that time was the NBC Universal executive VP, stressed that NBC was indeed cognizant of what she defined as a ‘changing landscape of entertainment marketplace’ and how they are as much in a search for more traditional customers as they were actively scrounging for ‘new buyers’.

Problems with newfound strategies – Because of the focus on being able to provide something new and cutting edge compared to its competitors, NBC was resorting to doing things and exploring possibilities that the top management may have thought to be something that the target audience / market will appreciate and enjoy, but somehow, the things that NBC does sometimes yield results which are contrary and contradictory to its long term and short term plans.

Cheng reported in her news article about how one of the latest agreements that NBC made out with a company that can help them improve their hold of the audience share seemingly backfired at the company. Exploring how they can better utilize the presence of the Internet to their advantage, NBC hooked up with Netflix and designed a way wherein NBC exclusive shows will make itself available to Internet users via Internet streaming (Cheng 1).

There is proof in the seemingly messy web of events that NBC left in its path towards ruling market share, particularly about its strategy that involves the use of the Internet media and the streaming of the NBC shows through the Internet. Working hand in hand with ITunes, one of NBC’s first options was to use this avenue for the streaming of limited NBC shows. It can be recalled that before the end of August last year, Apple was reacting to the fact that NBC was somewhat overcharging the per-episode price of NBC shows and was even pushing Apple to a corner by threatening that the company is set to forfeit the agreement it made with Apple.

Under the new terms that NBC was insisting on Apple, the price per episode of every NBC show would make a 200 percent increase from 1.99 to 4.99 US Dollars. This event was followed by the tie -up NBC Made with Unbox, which is characterized generally by the availability of the previous full season shows of NBC via the use of the Internet.

After that, NBC unveiled the utilizing of Hulu, which may seem an attractive move since the ad-supported content of the new video distribution site featured both new and old shows; the only catch is that it can only run for a limited time and expiration date is set for every show available in the Internet through Hulu. But NBC obviously were not yet out of worse ideas that will make its previous bad ideas unnoticeable in hindsight. After Hulu came in NBC Direct which was NBC’s own way of saying maximum consumer restriction – imagine having to resort to watching shows in the Internet with the use of a means that has several requirements (which Cheng identified as the presence of Windows, Internet Explorer, Windows Media Player, a proprietary NBC video client and an Internet connection).

But the real kicker that made the package a totally inconvenient option is the presence of the renewable licenses that the consumer has to renew every 48 hours; NBC Direct, according to Cheng ‘was just downright bad’ (par. 5).

Surely, it is understandable as it is common sense marketing that people would love the variety and the options given to them – provided that all of these options are characterized with convenience and ease of use and not as an additional burden. In the effort to win the hearts, eyes, remote controls and URL destination of every computer-owning individual who opts to watch television shows via the use of the Internet, NBC seemed like it was feeling its way around and fumbling most of the time, being all too reckless with how the supposed innovations of NBC as a broadcast brand is being carried out and delivered to the target audience.

Cheng believes that while the variety and constant change of options for consumers may stir excitement among its target market, NBC, at this point, would be better off if they could focus on just one strategy and fine tune it first (Cheng 6). A Variety of options and ever changing scheme is at best hilarious and at worst totally irritating for customers who just want to catch the episodes of the shows they want to see.

If NBC cannot do that, they are in great danger of losing loyalty and patronage to its rivals, and CBS is just one of those companies who is more than willing to take in what NBC would lose or what the company is losing at the moment, and when that is the end result of a marketing strategy, it usually means that the strategy is a failure all in all.

The CBS Strategy – The trouble that seemed to have brewed between ITunes and NBC was as much bad publicity for NBC (mainly because people believe that NBC was being too selfish with its intent for price increase) as it was a chance for rival CBS to reiterate how it has a stable relationship with ITunes. While this move in no way greatly affected the ratings battle between the two companies, this is indicative of how CBS is running the show management and marketing wise, compared to the very mercurial course of action that NBC seemed to be bent on taking.

And yet, there is still more to CBS’s strategy that may have helped the company get an edge over the competition in some point of the companies operation, and that refers to the efforts of the company to see beyond the internet and beyond ITunes (while ITunes and IPod are popular in the United States, not everyone who loves watching television is equipped with this new technology, and that is why CBS is not limiting their strategy with its business relationship with ITunes).

For one, there is the Internet-based video-friendly mass media platform that is very popular these days. In 2006 CBS entered into an agreement with You Tube. This move enabled many CBS shows to be viewed with the use of You Tube, and just a month after the agreement was made official and executory, CBS content in You Tube become one of the hottest items to be viewed by You Tube patrons. But CBS is both looking at the increase in viewership in You Tube as well as the success that CBS is experiencing because of its partnership with You Tube, saying in a press release that shows including the Late Show with David Letterman and The Late Late Show with Craig Ferguson were experiencing the entry of new viewers because of the impact of You Tube to this programs.

While CBS is also in the thick of the fight towards finding new ways to maximize the use of the Internet to make visibility and constant connection with viewers as consistent as possible, CBS can be hailed for its move to expand visibility by the use of not just the Internet but through Outernet as well. In a press release made available to different websites in 2006, CBS announces its new strategies so that the television shows that people are watching regularly can be made available to them even when they are not in the house or in the place where they commonly sit down to watch their television shows.

This move maybe in response to the fact that today’s lifestyle dictates that more and more people do not necessarily stay put in one place in a routine cycle and because of this lifestyle they tend to miss out on shows that they wanted to see because they were on a plane or somewhere else which was does not feature CBC television shows before. CBS answers that by the implementation of the action plan that is composed of several different strategies found in one comprehensive plan designed to allow people more opportunities to watch CBS shows. CBS called this effort their marketing initiatives, and this include the agreement it made with American Airlines.

Through the CBS – American Airlines agreement, the latter would feature CBS shows as part of its in-flight entertainment. This was a move that has very promising results and impact on the market share of CBS. For one, the 30,000 flights per month that is targeted by American Airlines is expected to result to about four million passengers exposed to CBS shows and programs.

The only downside is the fact that (1) the frequency of flights in the coming days and months maybe affected by how global market and local business performs, and (2) a large part of the plan is dependent on the participation of sponsors which may renege on the deal sooner than either American Airlines of CBS expects. But that was the gamble that the two companies are willing to take during the planning phase, and when it was set in motion, the public, especially those who are followers of CBS shows, were delighted of such news.

CBS’ exploits to use mode of transportation as a jump off point to reach CBS viewers as well as influence new audience to make the shift was not limited to air transportation system. The same action plan was implemented by the network in select cruise ships, particularly Caribbean cruise ships that will have television entertainment exclusive to CBS shows. CBS also made itself visible in fixed public locations like supermarkets, as well as integrated television show marketing via the use of postage stamps, water coolers and autonets and roving RVs as a means for mobile marketing and promotions.

Conclusion – While it may not be the direct intention of NBC to earn the ire of the public for resorting to marketing strategies and implementing business plans that made people less and less interested in pursuing the use or patronage of these mediums (i.e. the Internet, the Outernet) to access shows they missed on regular television airings, there is a huge blame that the planners should take for the many wrong moves that NBC apparently took as the two were completely blinded by the desire to outmatch and outperform the other network. For its part, CBS should be commended because unlike NBC, CBS is displaying the true business acumen that is necessary for a network company to compete and come out on top – not just in rankings but as well as in audience appreciation.

NBC had a problematic history when it comes to integrating the use of the Internet so that the NBC shows are accessed by more and more individuals, particularly those who are more Internet-dependent. This problem is something that NBC should fix because it does not only damage their credentials and in turn make them an unfavorable option for its target customers, it is also viewed by many as one of the poor moves that the company made in the name of hasty maneuvering designed to outflank rival like CBS.

Cheng opined that the action of NBC to confuse its customers and make accessing the shows of NBC more and more difficult, as well as being just as confusing as their marketing scheme is an act that is definitely diluting the strength of NBC as a broadcast network brand. While it did not say how this translates to gains for other competing brands like CBS, economics will dictate that for the losses that one of the market players is experiencing, another competitor is taking advantage and is rising up from its former position via the avenue that the brand’s lost market share provides other competitors.

Works Cited:

Arrington, Michael. “CBS Is Pretty Damned Excited About YouTube.” Tech Crunch.com. 22

      November 2008. 28 March 2008

      http://www.techcrunch.com/2006/11/22/cbs-is-pretty-damned-excited-about-youtube/ 

Bauder, David. “The Associated Press.” The Ledger.com. 26 June 2007. 28 March 2008

http://www.theledger.com/article/20070626/NEWS/706260362/1021/RSS06&source=RSS

Cheng, Jacqui. “Analysis: new NBC deal with Netflix adds to confusing list of TV

      offerings.” Ars Technica. 29 November 2007. 28 March 2008

http://arstechnica.com/news.ars/post/20071129-nbcs-tv-deal-with-netflix-adds-to-confusing-list-of-digital-services.html

La Monica, Paul R. “Despite new hit ‘Earl,’ NBC is still struggling while ABC and CBS keep

      racking up strong ratings.” CNN/Money. 26 September 2005. 28 March 2008

      http://money.cnn.com/2005/09/26/news/fortune500/falltv/index.htm

“The CBS Marketing Group Implements Outernet Strategy for the 2006/2007 Television

      Season.” CBS. The Futon Critic. 17 July 2006. 28 March 2008

      http://www.thefutoncritic.com/news.aspx?id=20060717cbs03

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