A PRIME TIME FOR TV NETWORKS Big 3 and Fox are holding off cable rivals

THE BALTIMORE SUN

New York--When television's Murphy Brown said that all her 6-week-old baby lacked to become vice president was a set of golf clubs, she may have been just rehashing a feud with Dan Quayle.

But her snide aside also showed that in many ways, television's major networks are still alive.

Despite their oft-heralded deaths, the networks remain the only forum for national debates and cat fights. And ratings from the past year indicate that, after more than a decade of decline, the networks might be holding their own against cable television's inroads.

In fact, as the new fall season got under way, the big three -- ABC, CBS and NBC -- plus newcomer Fox were really battling among themselves for the vast majority of prime-time viewers and advertisers.

Cable television may be growing, and it may appeal to sports nuts, the MTV generation and other viewers with special interests. But the networks are the only way to bring advertisements or political messages to 75 percent of television-owning households.

"Although there's been a lot made that the networks are dying, they still . . . are the only way to reach a mass audience. I don't

see them vanishing soon," says Audrey Steele, who researches television and new media for the advertising company Saatchi & Saatchi.

The networks can be heartened by several key statistics as they start their annual jockeying to win viewers. Last season was the first in 15 years when the networks' share of prime-time viewing did not decrease. From a high of 91 percent of evening viewers in the 1978-1979 season, the networks sank steadily, to 61 percent in 1990-1991. Last year, the networks' audience share held at 61 percent.

"This year takes on special importance for the networks, to see if they can do it again -- can they hold the line on cable?" said Edward J. Atorino, a network analyst for Salomon Brothers Inc.

Although most attention will be focused on the big three, Fox will be closely watched to see if it can repeat last season's performance, when it boosted its share of prime-time viewers from 11 percent to 13 percent.

That's still far behind NBC's 20 percent prime-time share. But Fox has expanded its offerings to a complete seven-night schedule. And several of its shows -- "Beverly Hills 90210," for example -- are so hot among teeny-boppers that it could win one of the nightly prime-time battles.

Although Fox may be winning the fight for the glazed eyes of youthful viewers, it has not hurt the established networks, ratings show. Fox's ratings increase last year came at the expense of cable competitors -- not the big three.

Experts point to several factors when explaining why the networks didn't continue their nose dive. One factor: the huge audiences attracted by such major sporting events as the Olympics and the 1991 World Series, which went to seven games. Another: the absence of the Persian Gulf war, which boosted ratings for cable stalwarts like Cable News Network in early 1991.

The networks' new stability was reflected in the modest increase in advertising sold in advance of 1992's fall premiers. Advance advertising dropped from $4.5 billion in 1990 to $3.5 billion the next year. This year, revenues from presold ads are up 3 percent, a small boost but one that is noteworthy during a nationwide economic slump.

Almost no analyst believes that the networks have hit bottom in their duel with cable television. Still, most agree that only the networks can offer original shows such as "Murphy Brown" that can tap the nation's pulse and even draw criticism from the vice president. Unlike most cable stations, the networks boast shows that are topical and can react to current affairs.

The networks still command the resources to develop such shows. Most cable stations, meanwhile, dish up reruns of "Gilligan's Island" and old movies. Or they offer shows for specialized audiences, such as 24-hour news reports, minor sporting events and cultural programming.

"It says something that in a world of 30, 40 or even 50 channels, four can dominate 75 percent of evening viewers," said Paul Bortz, a Denver-based media analyst.

One reason: Each of the three big networks spends an average " of $2 billion a year on developing new programs. That figure, he said, equals the entire budget of all basic cable stations put together. Although cable operators have accepted this and are willing to show a disproportionate number of reruns, many viewers still want new shows, he said.

The new shows' success in attracting viewers won't be determined for a month or two. Ratings released for the first full week, which ended Sept. 27, showed CBS back in first place, followed by ABC, NBC and Fox. Early ratings, however, are unstable and are unreliable guides for the rest of the season.

The first-week rankings showed a few surprises, including the success of ABC, which had three of the top 10 shows. NBC dumped many old favorites, like "Golden Girls," in favor of Fox-style youth shows.

Another surprise: NBC's failure to improve on last year's rating of a 20 percent audience share.

CBS, meanwhile, had six of the top 10 shows during the first week, including first-place "Murphy Brown," with a 29 percent rating.

Regardless of ratings, each network would benefit from a stronger economy. Of the four companies, only ABC, owned by ABC/Capital Cities Inc., publicly reported a profit last year, of $374 million.

CBS Inc. lost $98.7 million despite its excellent ratings. The network paid extravagantly for the right to broadcast major sporting events and lost badly, being forced to write down more than $300 million.

Analysts estimate that NBC lost money, too, although it is owned by General Electric Co., which does not release separate financial data for the third-place network.

FTC Fox is believed to be profitable, although its corporate parent, News Corp. Inc., lost $93.7 million because of weak revenues from subsidiaries.

Wall Street, meanwhile, views the networks with mixed feelings. Analysts generally are high on CBS, which is expected to be the ratings winner again this year. They also like News Corp., although it's considered a riskier stock. Despite ABC's high ratings, most analysts rate it a "hold," possibly because the stock is already highly priced.

In the end, the networks' financial health will depend on their ability to attract the viewers advertisers cherish.

Advertisers still rely on network air time as the most trustworthy way to sell many products. An ESPN hockey game may deliver some male viewers, but shows like "Murphy Brown" can deliver the vice president.

As Mr. Bortz said, "After an initial enthusiasm for cable, advertisers have realized that one thing it can't do is deliver mass audiences across the U.S."

TV NETWORKS: NOT DOWN THE TUBES YET

CBS

1991-1992 SHARE OF PRIMETIME AUDIENCE: 23

AUDIENCE SHARE IN THIS SEASON'S FIRST WEEK: 22

LAST YEAR'S REVENUES/PROFITS: $3.03 billion/ ($98.7 million)

INVESTMENT ADVICE: Buy/hold

POSSIBLE FLOPS: Brooklyn Bridge, Frannie's turn

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