TV Ratings Stink Because People Are Watching More TV

Earlier today, the Bureau of Labor Statistics released the 2014 data for their annual American Time Use Survey. The survey measures how Americans spend their time, from working to sleeping to leisure. In an environment where TV ratings declined 50% in the decade following 2002 while subscription fees have steadily increased to make up for lost advertising revenue, surely we would see a similar decline of television viewership in the survey data.

Well now, that's rather curious, isn't it?

These are average hours per person, which means that even if the graph were flat, the total number of hours watched would have increased due to population growth; U.S. population increased from 290 million in 2003 to 319 million in 2014.

To be fair, the 50% figure is for broadcast networks, but the disparity is striking and undeniable, raising a number of questions. Are Nielsen ratings are flawed? Are we merely watching more cable? Is everyone just streaming Netflix? Whatever the reasons, and there are many to be sure, the majority of television consumption is now unaccounted for by traditional metrics. For all the complaining from studio, network, and advertising executives about declines in viewership, it seems the actual problem lies with their inability to measure and monetize what is actually a growth in TV watching.

Financial Media Coverage 2

A month ago, I wrote an entry about the failure of my favorite CNBC show to recognize that Apple probably wasn't in for a (short-term) pullback. A month is a reasonable time frame to follow up on people's buy/sell calls, so let's see how things turned out:

I'm sorry, you were saying?

Financial Media Coverage

CNBC is an interesting animal. Many praise its coverage of market events and interview exclusives while just as many criticize its sensationalism of market movements and oversimplification of investing. Something I think almost all investors and traders could find useful is Fast Money, a daily digest of market developments and analysis from industry professionals. Despite its name, the show is not some wasteland of stock tips and get-rich-quick schemes, despite what Jon Stewart may believe.

Wednesday's price action in Apple (and the market as a whole) was certainly worth the attention given on Fast Money: everyone agreed that Apple's morning move from $509 to $526 followed by a close at the daily low of $497, all on five times normal volume, signaled an important reversal and intermediate price top, and that while you shouldn't necessarily get short of the stock, long positions should be lightened.

What happened yesterday with Apple, however, received hardly any attention at all. The panelists spent less than one minute discussing what today's gap lower open, followed by stabilization, followed by a close near the daily high meant for the price reversal thesis.

Those unfamiliar with the show might attribute the producers' decision to self-preservation - they don't want to look bad. However, the show has a segment specifically for revisiting bad calls made previously by the panelists called "Fast Fire." And really, did you actually expect coyness from a show entitled "Fast Money"? That the price action caught the producers off-guard isn't an entirely meritless argument, but I'd say the chart below offers strong counter-evidence:

No, there really doesn't seem to be a good reason for what happened on yesterday's show. It bothers me, not just because I'm a fan, not just because I'm an Apple shareholder, but primarily because there are people who watch the show who also control vast sums of investment capital.

We should all think critically about the financial information we consume. We know that investors have home bias for stocks to the detriment of their portfolio returns, and that's partly driven by media consumption vis-a-vis frequency of exposure. Consideration of content presentation will make you not only a more conscientious investor but also a more successful one.