The State of Network Television - Article by Vulture

Here is a really great article. I strongly suggest you read the whole article when you get time. A couple of bits I thought were very insightful and might help explain to some of you not familiar with ratings why some shows get renewed and others cancelled.

Ratings still matter — but not as much as they used to.
Falling Nielsen numbers (and the decline in ad revenue that sometimes results) are by no means a good thing for networks. But increasingly, broadcasters are realizing they don’t have to be fatal to the bottom line. “As recently as five years ago, [TV] was still 80 percent about winning and being competitive,” one industry vet says. Today, the equation has changed. Nets still want Nielsen numbers, and they want to draw more of the right kinds of viewers (i.e. young people) than their rivals. Nearly as important now, however, is what Hollywood suits like to call “asset creation.” That means using the network platform to create shows that bring in revenue from sources other than advertising — sales to international markets, U.S. cable networks, and, increasingly, streaming players such as Netflix or Hulu. Even programs that don’t grab that many viewers when they air on traditional linear TV — think NBC’s Hannibal or the second season of CBS’s Under the Dome — can still turn into moneymakers for networks through these alternative revenue streams. Ideally, of course, networks want every show to be like Empire or How to Get Away With Murder — a blockbuster that prints money every which way. But since such big hits are increasingly an exception, broadcasters are figuring out new ways to get by.

Owning the shows you air is crucial.
All of the aforementioned alternative revenue streams only kick in if a network has some sort of financial stake in a show. If a series is produced by an outside studio, the network only has one big way to make money from it: selling ad time. That’s fine when a show is a big hit, but with so many series now getting by with modest ratings, broadcasters don’t have any interest in modestly performing shows they can’t fully exploit. That’s why Fox axed Almost Human last season (the show came from Warner Bros. TV) and why ABC might pull the plug on Cristela (which has actually improved ABC’s Friday ratings). The downside of this corporate synergy: Some really good pilots may die next week because they were produced by the wrong studio.

Source:

Full Article @ Vulture