Where did the TV network viewers go?

When Nielsen Media Research released the prime-time ratings for the 1998 TV season premiere week, the data showed there were about a million fewer viewers watching the Big Four broadcast networks than the year before.

There was a 14 percent decline for NBC, 8 percent for Fox, 4 percent for ABC and 3 percent for CBS, which topped Nielsen's ratings for the week with an average of 14.8 million viewers. (NBC is a partner in the joint venture that operates MSNBC.)

Taken by itself, the broadcast season premiere week decline isn't incredibly noteworthy. It's just more of the same audience erosion that Nielsen and Madison Avenue executives have been recording for the last several years.

But where are they going?

"The mass reach broadcast networks have been losing audience reach to more specialized forms of media," says Marshall Cohen, senior vice president of brand development at America Online.

For the most part, that means cable television. The fact is, total TV viewing (including cable and syndication) was up 4 percent, or about 3.25 million households.

Yet media watchers note that the news that the networks' audiences are eroding -- even as they go into a heavily hyped new season -- at a time of the Internet's highest profile ever.

Internet's Starr rises
Out of 40 million to 53 million wired U.S. homes, an estimated 24.7 million unique users logged onto the Web on the Friday and Saturday the notorious Kenneth Starr report was released, according to Web measurement service Relevant Knowledge. News and government sites had the highest audience leaps, with portals averaging about 7 percent more traffic than usual. Home use of the Web skyrocketed 72 percent for those two days.

In addition, America Online CEO Bob Pittman told a Forrester Research conference audience in New York on Thursday that 4 million to 7 million households are coming online each year and that the online audience is growing faster than cable (which reaches approximately 78 percent of the almost 100 million U.S. TV homes).

"Online will reach 75 million homes before its growth begins to slow," Pittman said, noting that AOL has more than 13 million subscribers.

"The expectation is, even if it's not happened yet, online will really impact TV usage, and it's going to happen really soon," says Joe Mandese, editor of the Myers Report, a media industry newsletter. "It may already be happening, we just don't have hard evidence yet."

It's who is gone
Furthermore, it's not so much that viewership numbers are down but that ratings in key demographics are down.

For example, the Big Three networks (excluding Fox because it programs a fewer number of primetime hours each week) saw a 13 percent decline in adults 18-34 years old, one of the demos most prized by mainstream marketers, according to Nielsen's data.

While total household viewing on basic cable was up 15 percent, for adults 18-34, cable viewing was up 16 percent compared to premiere week last year.

"Basic cable didndt attract that much more of that younger demo relative to its total households, so it looks like they were going somewhere else," says Mandese.

Did they go to the Internet?

It's difficult to say, but adults 18-34 are among the fastest-growing demos online, researchers say.

More specifically, from first quarter to third quarter 1998, female adults 18-34 on the Net grew by 22.4 percent, according to Relevant Knowledge research.

Follow the media money
For Madison Avenue and the Wall Street financial community, which have been championing the stock prices of ad-supported online companies like Yahoo! and America Online, the media habits of American consumers are vitally important.

The pressing question is whether leading marketers, seeing the broadcast audience decline, will shift any of their advertising dollars away from TV.

At the ballyhooed Procter & Gamble interactive advertising summit in August, the packaged goods giant waved the hefty carrot that it would move 80 percent of the billions it spends yearly to online -- if the medium could improve its audience tracking and measurement system.

Still the migration of money from one medium to another takes time. Cable television struggled for a decade or more to get its "fair share" of consumer goods' TV budgets.

Influential media executives acknowledge Internet parallels to cable beginnings.

"We're recognizing that more people are on the Internet and more time is being spent there," says William Croasdale, president of national broadcast at Western International Media, a Los Angeles firm that handles more than $1 billion in TV media buying.

"More and more leading-edge advertisers will take the [Internet] gamble in the hope that, by being on the ground floor, they will have an edge on their competitors as the medium grows," says Croasdale.

As AOL's senior ad sales executive Myer Berlow sees it, online is already benefiting from the ad pursuit of online audiences.

"If you think about it, two years ago we did about $5 million a year in advertising. Now we're in excess of $100 million a quarter in advertising."