BOB GARFIELD: While TV runs into problems when it fails to separate advertising from programming, it certainly can't do without advertising all together, and sponsors aren't picking up the programming tab out of the goodness of their hearts. They need an audience to watch the commercials. And the steady shrinking of network audiences is creating a gathering terror. The latest shocker from the A.C. Nielsen Company, a report that since last season alone, 750,000 men, aged 18 to 34 --advertisers' most coveted demographic -- have simply stopped watching TV. Joining me now to discuss this bombshell is David Poltrack, executive vice president of research and planning at CBS. Dave, welcome to On the Media.
DAVID POLTRACK: Thank you, Bob.
BOB GARFIELD: All right, 750,000 human souls vanishing, just disappearing. What's going on?
DAVID POLTRACK: Well I wish I had the answer to that question. This is one of these anomalies that turns up in the audience measurement system occasionally, and would just be sort of a idle curiosity if it didn't mean so much economically.
BOB GARFIELD:Fine. It may be an anomaly, or it may just be some sort of blip that will be self-correcting. But what if it isn't? Is it possible that this is, as someone put it, the canary in the mineshaft?
DAVID POLTRACK: Advertisers are not going to abandon network television to any significant degree unless they can find something better, and the fragmentation in the television marketplace has impacted the television network audiences significantly, but it hasn't really created any new alternative. The fact that the networks have maintained their pricing is really a function of the fact that the top 20 shows have had significantly less erosion than the balance of the shows. So the premium product of network television has relatively held up. And in this particular case, of course, it's not just the network audiences going down. It's the overall audience that's going down. So there will be no relative winner in this, if it continues, which means that there's not an alternative out there that's getting stronger as a result of this, so it'll probably have very little effect in terms of the supply and demand mechanics of the marketplace.
BOB GARFIELD:I want to ask you for a moment to at least consider taking off the rose-colored glasses. Recently you were quoted responding to a projection that the use of personal video recording devices like TiVo was going to quintuple by the year 2007, which will in effect dramatically reduce the number of people actually watching commercials broadcast on over the air television. You were quoted as kind of shrugging, saying, well you know, we lose a certain percentage of our audience every year to cable, and yet the model continues to be going strong. Is it possible that between the growth of the internet, between the introduction of such devices as TiVo and other PVR technology, and the overall fragmentation of the audience that networks are close to losing the critical mass of gigantic audiences that enable them to sustain this model, and that there's a death watch on for the goose that lays the golden egg? Is that one of the possibilities?
DAVID POLTRACK: Well these are all changes that we have to adapt to. We recognize that we can't count on just our distribution system to keep us on top, and we have to look at cross-platform types of arrangements, re-purposing, all of the different things that are going to be very much a function of an environment where the viewer has more control. We have a challenge ahead of us. There's no question about it. I mean that's why we're, you know, we're pushing so hard for the FCC relaxation on the ownership limits, because the economics of local television station ownership support the finances and the programming investments of the television networks. The more stations we own, the more stable the advertiser model is for us, and there are a lot of pressures on that model. There's no question about it. You know, we're not being complacent or blase about the fact that it's just going to continue to go on.
BOB GARFIELD: Well, David, thank you very much.
DAVID POLTRACK: Okay.
BOB GARFIELD: David Poltrack is executive vice president of research and planning at CBS. He joined us from his office at Black Rock. [MUSIC]
BOB GARFIELD: Coming up, a documentation of terror using the terrorists' own video. This is On the Media, from NPR. [FUNDING CREDITS]