TV networks cutting back on commercials
The emergence of Netflix and other streaming services that offer subscribers a commercial-free TV viewing experience means a generation could grow up without ever knowing the meaning of the phrase: “we’ll be right back after a word from our sponsor.”
The broadcast and cable networks that took in $19.7 billion for advanced sales of commercial time last year don’t want to see that happen. That’s why Fox and NBC plan to reduce the amount of commercial time in their shows starting next fall. Both are looking to offer advertisers the chance to run commercials in shorter breaks during which they might reach a more attentive audience. Other media companies have begun similar initiatives to reduce the number of commercials on their cable channels.
But doing so comes with a risk. Airing fewer commercials could mean less revenue for the networks, unless they can convince advertisers that it’s worth it to pay more to have their spots running in a less-cluttered program. The topic is being debated ahead of the upfront market, where most of the advance ad time for the 2018-19 TV season is sold.
The TV networks need a new selling strategy as their ratings continue to decline. The primetime audience of the broadcast networks is off nearly 20 per cent compared with the previous year and many of the major entertainment cable networks have experienced double-digit declines as video content is seen more on digital platforms.
Fewer commercials could help reverse that trend and advertisers would welcome a less crowded environment for their messages.
“I absolutely think a shorter commercial pod is better for the advertiser,” said David Campanelli, senior vice-president and managing director of video investment for the ad-buying firm Horizon Media. “How much better will it be versus how much more they charge for it? That’s a big outstanding question.”
Networks have reconfigured their commercial breaks to deal with changing technology before.
Once remote controls were used in most homes by the early 1990s, the networks eliminated the breaks between programs because they found that was when viewers most often flipped channels.
When digital video recorders started reaching critical mass in 2008 and cut into prime-time viewing, Fox, with great fanfare, reduced the number of spots in several of its new series to encourage viewers to sample them.
Still, those changes occurred when broadcast and cable remained the only places for viewers to go for original programming. That’s no longer the case, with the explosion of new programming across multiple platforms. Streaming video is the greatest challenge yet to adsupported television — and it’s not just from Netflix.
Millions of people are watching their favourite network shows such as NBC’s This Is Us on a streaming device or through a video-on-demand service within the week after they air for the first time on television.
Those viewers are seeing commercials too, just fewer of them, and it’s conditioning them to expect fewer.