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Must-flee TV?
NBC's ratings tanked last season. Can Martha give the Peacock Network reason to strut their stuff?
August 31, 2005: 2:12 PM EDT
By Paul R. La Monica, CNN/Money senior writer
You're flambeed! NBC is hoping that the Martha Stewart version of
You're flambeed! NBC is hoping that the Martha Stewart version of "The Apprentice" will lift the network from its ratings slump.
NBC is a small part of General Electric. But ratings woes could be one reason why GE's stock has dipped.
NBC is a small part of General Electric. But ratings woes could be one reason why GE's stock has dipped.

NEW YORK (CNN/Money) Can NBC pull itself out of its ratings slump and become this year's ABC?

NBC, the No. 1 TV network in ratings during the 2003-2004 season with the 18-49 year old demographic that advertisers covet, took a nosedive to fourth place in the most recent season, according to Nielsen Media Research.

As a result of this slide, NBC took in only $1.9 billion to $2 billion in advertising commitments for the upcoming season during this spring's "upfront" ad buying period. That's down from $2.9 billion a year ago.

The loss of popular series like "Friends" and "Frasier" hurt the Peacock Network badly and it did not have any major new hits. In 2003-2004, NBC had three shows among the top six. Last season, its highest ranked show was the second version of "The Apprentice," which came in 13th and its top new show was "Medium," which placed 19th.

ABC, on the other hand, went from a distant fourth in 2003-2004 to a strong third place showing last season thanks largely to the monstrous success of rookie shows "Desperate Housewives", "Grey's Anatomy" and "Lost", which were the 4th, 9th and 15th most watched shows respectively.

Martha and not much else

But heading into the eagerly awaited fall TV season, there isn't a lot of hope that NBC can reverse its slide any time soon.

"In a nutshell, I think it's very unlikely that NBC will have a miraculous turnaround this year," said Josef Adalian, TV editor with the Hollywood trade publication Daily Variety. "The likelihood is that there will be more pain before any gain."

Among the new shows that NBC has planned, the biggest buzz is obviously for "The Apprentice: Martha Stewart."

"This is a highly anticipated show and it should be. She's a bigger-than-life character," Bill Carroll, vice president with Katz Television Group, a programming consulting firm.

Still, some analysts wonder if the show will have the long enough legs to return NBC to prominence. After all, ratings for last year's third season of "The Apprentice" were lower than the ratings in season two.

"NBC is working on filling holes instead of making a schedule that can maintain itself over the years," said Sararuth Delice, senior research analyst with Carat USA, a media buying firm. "Martha Stewart will breathe new life into 'The Apprentice' franchise but it's not something that you can count on year after year."

Other than Martha, there's not much that looks promising, analysts said. A quirky sitcom called "My Name is Earl" has gotten some favorable coverage from critics and there are hopes that "E-Ring", a Jerry Bruckheimer-produced drama about the Pentagon starring Benjamin Bratt and Dennis Hopper, could also emerge as a sleeper hit. The company was not available for a comment for this story.

But analysts said that NBC's biggest problem is that many of its core shows are showing their age.

To that end, Delice said she doesn't understand why NBC didn't overhaul its Thursday night schedule considering that "Friends" spin-off "Joey" was not a big hit (it finished the season ranked # 43) while its other shows, "Will and Grace", the Donald Trump version of "The Apprentice" and "E.R." all lost viewers when compared to a year ago.

"Thursday night has always been the NBC staple and what's so weird is that even though last year it didn't do well, they returned that entire lineup intact. That perplexed a lot of people," said Delice.

Wait until next year?

What does this mean for NBC's parent company, General Electric? NBC Universal, the division that owns NBC, cable networks USA and the Sci Fi Channel, Spanish language network Telemundo and film distributor Universal Studios, accounted for about 15 percent of GE's sales and operating profits in the second quarter.

And even though NBC is just one part of the overall entertainment division, another season of poor ratings could hurt the company and possibly the stock, said Robert Schenosky, an analyst who follows GE (Research) for Jefferies & Co.

"NBC is still arguably the face of that division. Should NBC have another year like last year, there could be advertising fallout and the perception of NBC may change for investors," he said. (Schenosky does not own shares of GE and his firm has no banking relationship with it.)

Nonetheless, there is some hope that NBC could turn things around in the not-so-distant future. Brad Adgate, senior vice-president of corporate research at Horizon Media, a marketing firm, said that NBC should be able to use the Winter Olympics in February as a platform to promote new mid-season shows. And in the fall of next year, NFL football returns to the network on Sunday nights.

Katz's Carroll agreed. "This is a rebuilding year. Next year is going to be the huge turning point," said Carroll. "The one positive they'll have is NFL Sunday night football. That could be a game changer for NBC."

And who knows? As ABC demonstrated last year, it didn't take much for it to snap out of its ratings malaise.

"TV can be so fluid. If you can get a hot show or two you can build around that," said Adgate.

What's next for Martha Stewart now that the ankle bracelet is off? Click here.

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