NBC Universal took the unusual step of giving advertisers cash back for weak performance in prime time ratings during the Fall 2006-Spring 2007 season, The Wall Street Journal reported Wednesday [subscription].

Typically, a broadcast network will offer advertisers additional time if a ratings shortfall occurs, but NBC has none to give, Reuters reported. NBC, a division of General Electric (NYSE: GE), is in fourth place in the network ratings wars, and currently has no standout new programs that media buyers desire, The Journal reported. GE's shares gained 30 cents to $37.33 in Wednesday morning trading.

Some industry executives blame the ratings dip partially on the Writers Guild of America strike that began November 5 and that has reduced the supply of original material, Reuters reported. Others cite technical changes in a new ratings formula, or the continuing audience 'fragmentation and dilution,' whereby the networks are losing viewers to specialized cable TV channels and internet activities. However, one experienced analyst believes that while the above variables play a role, the key driver of any ratings change remains a television network's core component: programming.

The viewership of the evening news among CBS Corporation (NYSE: CBS), General Electric Company (NYSE: GE)'s NBC and The Walt Disney Company (NYSE: DIS)'s ABC has always been a dogfight. Each competitor tries to add more value and one-up the next guy (or gal) with flashy anchors, exclusive stories, or engaging content. It's a death match, and it always has been. In an age of instant news viewed through the Internet, though, the jobs of all three are increasingly becoming harder. That is, grabbing new viewers won't be getting any easier soon as a generation of news hounders who live on the web shun television and the associated glitz for the instant gratification of news fixes, even on their cellphone screens.

But, that is not stopping the news networks from still obsessively worrying about which one has the highest viewership in the U.S. As reported recently, NBC's decade-long dominance in the evening news segment has seen a recent upstart surge from ABC World News Tonight, anchored by Charles Gibson. Bryan Williams, who replaced NBC vet Tom Brokaw just recently, probably isn't worried that much for now. But Gibson has been around for a long time at ABC, and he's a familiar face to millions. So is Williams, but he may not have the viewer-gaining power that Gibson is most likely enjoying at the moment.

Which network will end 2007 with more documented viewers? That can't be called right now, but with advertisers becoming more protective of their ad money (and shifting more onto the internet), the battle for ratings has never been more important than it is now. Media distribution is changing rapidly, and only the last success is the best form of present success. So far, the 25 to 54 demographic, which is the top prize among advertisers, watched ABC's nightly news broadcast more than NBC's nightly program for the first time in 11 years recently. If this is a sign of things to come, it'll be a dogfight once again.

According to the latest Nielson ratings, network television has 2.5 million fewer viewers tuning in to the four major stations this spring than in 2006.

Early daylight-savings time, reruns, recorded or downloaded shows -- take any excuse you want -- people stopped watching. One reason at the top of my list: the creation of the middle-of-the-season hiatus. It truly was a horrible idea.

Despite every network's desire to increase public viewing, ratings are probably going to get worse. I think they will get worse for one network in particular: General Electric's (NYSE: GE) NBC.

Primetime hasn't been doing well at NBC for the last few years. The network had three consecutive fourth place finishes in primetime viewing since 2004, behind CBS, ABC, and Fox. Strangely enough, the powers that be continue to keep the people who bring the worst to primetime on their roster. Jeff Zucker, the former head of NBC television who presided over the decline, was promoted last October to President and CEO of NBC Universal. Kevin Reilly, NBC's President of entertainment since 2004 (note that he's been president for the same three years NBC's been in fourth place) had his contract extended in February.

Sounds about right.

It's a new name and a new future for Court TV, the Time Warner (NYSE:TWX) unit that surged in popularity during the mid-1990s, as it covered every bit of dripping minutiae in the O.J. Simpson Trial. As of January 1, 2008, the network will emerge with a new name, look, and logo.

Programming will be fresh as well, building more reality series and revamping daytime shows. On the docket for the afternoon hours are two talk shows hosted by the widely abhorred but habitually watched Nancy Grace and ousted View co-host Star Jones. The evening will feature gritty looks into the underbelly of criminal justice, including shows about police interrogations and con artists. The network is also formulating a deal for quarterly specials with TheSmokingGun.com. Already in the works is a special on The Dumbest Criminals in the World.

According to a release from Broadcasting & Cable, "The network's recent research, which in part prompted the upcoming changes, shows the fringe, primetime and late-night audience is male and loves real people, situations and stories, especially action-focused stories."

Beth Gaston Moon is an analyst at Schaeffer's Investment Research.

iTunes rounded out its network television offerings today by adding primetime CBS shows including all three CSI franchises, NCIS, Numb3rs and Survivor. The shows will be $1.99 each, just like shows from NBC, USA, Showtime, ABC, and (all importantly) Comedy Central's The Daily Show.

Investors seemed just as pleased as customers (the ones who will now be able to watch a bullet ripping through some poor sap's body over and over and over on their iPod's tiny screen). AAPL rode the tech sector up $2.195, or nearly 4%, to $60.76.

With this addition, iTunes carries virtually every popular primetime TV show, all for $1.99 each, and making the company the vendor of choice for watching television on the (very) small screen. The question: do customers want to download their TV, or record it on their DVRs for fullsize viewage? I'd much rather buy my shows one-by-one than navigate the complexities and scheduling required to remember to record them. How 'bout you?