Netflix Pushes Cable TV To Cut Commercials
Every time you turn on the TV someone's trying to sell you something. Most TV-watchers agree that commercials are a hassle. There have been commercial breaks for as long as there's been TV, but it seems in recent years you end up watching more commercials than actual programming. That might just be changing in the future, thanks to the streaming pioneer Netflix.
Broadcast and cable TV make the majority of their earnings not from your cable subscription but from what companies are willing to pay for airtime during your favorite shows. Before a show begins to air, networks present them to advertising companies that carefully choose which shows they want to feature their products. It's been largely understood that networks would allow as much time for commercials as possible and charge a premium for ads to run during their most popular shows.
In recent years, commercial time has been stretched on nearly every network in order to increase profits. Since 2009, the average commercial time during one hour of programming has increased by over a minute, making it just over a quarter of the total time. Companies achieve this by reducing time for programming and by speeding up content. Meaning that most of your favorite shows and movies are being played just a fraction faster than they were originally recorded.
The introduction of TiVo and DVR-type technology in 1999 began to change the way commercials are made and played. The ability that consumers have to fast forward through commercials forced advertising agencies to come up with ways to get their products seen anyway. One example of this is movie trailers that have a bar visible at the top of the screen throughout the trailer. Even when fast forwarding, you're likely to catch the title.
When Netflix began to offer streaming services with no commercials at all, television executives really started to worry. Netflix has 65 million subscribers. That's a lot of viewers that may decide not to watch cable television at all. The options don't end with just Netflix although it is the largest. There are many subscription streaming services with limited or no commercials at all such as HBO Go, Hulu and Amazon Prime. Advertisers and television executives have no other recourse than to drastically reduce the amount of commercial time in order to compete.
Television giants like Viacom and Fox are reducing the time of their commercial breaks in the hope they will make a more lasting impression on viewers. Fox has announced that their Hulu-aired shows will now feature a one minute interactive advertisement instead of a two minute commercial break. Normally, more ads means more money, but with less total time allotted advertisers will be paying more to position their products. It becomes a question of how valuable a few ads are instead of how many ads can fit into the commercial space.
Warner Bros. is going to begin testing their fewer commercials model on their channel TruTV in 2016. The channel has a younger viewing audience than many of their channels and the media company wants to see if they can keep an audience that has always had other streaming options. If successful, Warner Bros. will switch all of their channels, like CNN, TBS and TNT to fewer commercials.
The future of TV will always be changing, but for the first time in decades that change might not include more commercials. So thank you, Netflix.