Everywhere you look these days, network TV executives seem to be shredding their playbooks and experimenting with their programming. The prevailing sentiment seems to be: We'll do whatever it takes to cut costs and keep viewers tuning in. Exhibit A: Jay Leno, who has stepped out from behind his late-night desk to yuck it up on NBC during prime time.
Then there's CBS (CBS), where it's same old, same old. Yes, the Tiffany Network has added a Los Angeles spin-off to its military crime show NCIS, and launched The Good Wife, a ripped-from-the-headlines drama about the lawyer wife of a philandering politician. But mostly CBS is relying on sitcoms and police procedurals—the very definition of Old Media.
How is that working out for CBS? Pretty well, it seems. Three weeks into the fall season, it's on a roll. With 12 shows in Nielsen's top 20, including the top-rated comedy, Two and a Half Men, and its most popular drama, NCIS, CBS draws an average of 12.4 million prime-time viewers, 2.4 million more than runner-up ABC (DIS). Meanwhile, the stock has been handily outperforming those of its peers. "They've proven anyone wrong who thought that no matter what a network did, their audiences would continue to erode," says Andrew Donchin, who works for the media buying agency Carat North America and helps buy ad time on CBS for such companies as Pfizer (PFE), Black & Decker (BDK), and Papa John's International (PZZA).
Of course this year's ratings champ can quickly become next year's chump; such is the nature of a hit-driven business. But here's the interesting part: While CBS attracts older viewers than the other networks (its average age is 55 vs. Fox's (NWS) 44), its ability to attract large audiences is prompting advertisers, long obsessed with viewers aged 18 to 49, to give CBS a second look. Donna Spurrier runs Spurrier Media Group, which places ads for companies. One client, Identity Guard, which helps consumers ward off ID thieves, had a small ad budget and chose CBS because it has large numbers of loyal viewers. "When you have a limited budget, you have to fish where the fish are," she says.
Advertisers still pay a premium to reach the 18-to-49 set, say media buyers like Donchin, "but we're no longer as fixated on that. We look at who gets the eyeballs and who makes the buying decisions in a household." It helps, too, that viewers aged 25 to 54—CBS's strongest demographic—watch 90 minutes more of TV a night than 18- to 49-year-olds, says Brad Adgate, a research executive at the ad buying agency Horizon Media.
Fox can still charge advertisers a hefty premium for shows like Family Guy that have built huge followings among young viewers. But CBS's large audiences have helped it to an additional 10% or more for 30-second ads compared to earlier this year. As a result, estimates industry analyst SNL Kagan, CBS will generate $4.7 billion in advertising revenues this year, allowing it to sneak past NBC.
For years, CBS CEO Leslie Moonves has called advertisers' fixation on young viewers simplistic. Now, with 18- to 49-year-old Americans among the hardest-hit casualties of the Great Recession, his theory makes more sense. As Moonves told BusinessWeek in an interview: "Someone needs to show me where an 18-year-old consumer buys more than a 50-year-old." The question for CBS is whether big audiences of graying Americans will jazz advertisers once the economy recovers.