Programs are the heart of broadcasting, while sales provide the muscle. Ratings with their feedback element are the nerve system that largely controls what is broadcast.
In 1983, broadcasting and cable were part of a $21 billion industry. A pervasive element influencing all aspects of the electronic media is the audience rating. It is difficult to imagine a successful system of free commercial broadcasting without this important feedback. The ratings report the size and composition of the audience that is reached by a given program, station, or schedule of commercial announcements. These data are crucial to the activities of broadcasting management, sales representatives, program producers, advertisers and their agencies, writers, performers, and their agents. More important, from a public standpoint, the rating expectation for any program under consideration is a major component in network and station decisions as to what programs will survive and when and where they should be scheduled.
Ratings are a powerful force in broadcasting and telecommunications. They determine the price that will be paid for programs and the pay that performers will receive. They govern the rates that advertisers will pay for 60-second or 30-second or smaller commercial units in and around each program. Ratings determine stations' audience and rank order in their market, and to a large degree they dictate the profitability of broadcasting stations and their value when put up for sale. The salary and bonus compensation of key network and station officials are also governed by ratings success. Ratings results ultimately determine whether top management and program and news management in television and radio broadcast organizations will retain their jobs, be promoted, or demoted.