Streaming Forces TV Networks to Cut Back on Commercials

TV networks plan to show fewer commercials, and we have streaming to thank

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The TV networks’ trend of adding more ad time per hour of TV is finally going to be reversed. After seeing the success streaming services have had in reaching younger viewers, several media companies, including Time Warner Inc., 21st Century Fox Inc., and Viacom Inc., now plan to reduce the amount of air time dedicated to commercials, reports Bloomberg.

As TV ratings have been falling, so has demand from advertisers; as such, TV networks have been trying to make up revenue by showing more ads. Nielsen data reveals that the average ad time per hour has increased from 14:27 to 15:38 minutes on cable TV and from 13:25 to 14:15 minutes on broadcast networks since 2009.

Many viewers, however, don’t have much tolerance for TV programs packed with ads, especially not when there are ad-free alternatives out there like Netflix. On top of that, Bloomberg points out that advertisers worry that their messages are being lost in the chaos of so many commercials. Media companies, in trying to mitigate these conditions, have put different strategies in place, but each of them now looks to cut back on commercial time for viewers.

In an earnings call last week, Time Warner CEO Jeff Bewkes announced that truTV will air half as many ads during prime-time original shows beginning late 2016. Not coincidentally, the network skews toward a younger audience — one that is thought to be particularly ad-adverse. Should the experiment go well, the strategy would be introduced across additional Time Warner channels. Meanwhile, Viacom has already cut back on commercial breaks on its networks.

Fox, on the other hand, plans to shake up its online ad experience on Hulu. Instead of showing two-and-a-half minutes of commercials, the company announced that it will offer an alternative: a 30-second interactive ad. The idea is that showing viewers a shorter ad that they must engage with will be more effective — and therefore more valuable to advertisers. “The customer can avoid a whole number of other ads, so we’ll charge a higher price,” said Fox CEO James Murdoch said at a conference in September.

Should these theories prove to be effective, it would be a win for viewers, advertisers, and media companies alike. It remains to be seen if these strategies will be enough to stave off streaming services like Netflix, Hulu, and Amazon, but it’s further proof that such streamers are keeping networks on their toes.

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