Leave a Comment
As rates of live television consumption have plummeted over the past decade, many analysts have looked toward football as the stabilizing force that would ultimately keep the current model in place. Unfortunately, ratings for even the mighty NFL have taken a tumble this season, and whether there are mitigating factors or not, the poor performance is starting to cost the major networks a fortune thanks to ADUs.
An ADU is an Audience Deficiency Unit. Basically, it means the advertiser bought a commercial, or more likely group of commercials, and was promised a number of viewers the network didn't deliver. Instead of actually giving back a portion of the money the company invested for advertising as a penalty for not delivering, the network typically gives them ADUs, which are basically additional commercials that make up the difference. An ADU here or there is no big deal, but the more each network has to give away, the more future revenue it loses.
Take NBC as an example. According to AdWeek, The Peacock Network used 5.2% of all its football ads in 2015 as ADUs. This year, it has been forced to use 20% of its total NFL inventory for ADUs. That means it basically had to give away 1 out of every 5 commercials for free thanks to the low ratings, which ads up quick when you're charging more than $700,000 on average per thirty second ad.
Exactly why the NFL ratings are done so much this year is probably television's biggest current mystery. The pessimists would have you believe that the slumping numbers are simply part of the larger pattern of users ditching cable in favor of less expensive streaming alternatives. The optimists would have you believe the biggest problem was how overwhelmingly interested people were in this year's utterly bizarre Presidential Election Campaign.
Over the past few weeks, NFL ratings have steadily improved, but once again, the why is very much open to interpretation. Is it because the election is over? Maybe. Is it because this is statistically the most competitive season in more than eighty years? Maybe. There are simply too many factors at play to know exactly what's going on, but even with the recent bump, the numbers are still down from last year.
At some point, television is going to fundamentally change. That may be through giving users the option to make their own cable packages. That may be through eliminating cable companies and moving every single network to streaming. Regardless of what happens, football will play a major role in how that transition happens, but even so, it's probably time to admit that the NFL definitely isn't big enough to single-handedly save a cable model most people just aren't happy with.