Commentary
Cord-Cutting Isn't What's Killing Broadcast And Cable
- by Wayne Friedman , Staff Writer, May 21, 2021
Seraj Bharwani, Chief Strategy Officer of AcuityAds, put it more plainly: “Ad loads of 20 minutes and more per hour destroyed broadcast TV.” He says it doesn’t help that rising adoption of Netflix, Amazon Prime Video and Disney+ -- ad-free streaming at comparably inexpensive costs to consumers -- is helping much, either.
For over 20 years, TV consumers have been able to skip TV commercials. At the start, they may have felt this was revolutionary -- time-shifting technology was a breakthrough.
What’s the problem now? All these years later, modern TV consumers want it even easier.
They don’t want to bother with trying to master subtle, tactile thumb moves on TV remotes to skip every nanosecond of TV advertising.
In return for this ease, they will still get less advertising -- at least with streaming services that promise a slight five minutes of ad time per program hour.
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Over the last several years, networks began proselytizing cutting back on that 20 minutes per hour of non-program content time -- stuff that includes paid-national TV advertising, local TV advertising, and on-air promos.
But as of today, the bottom-line result has showed little overall progress. This isn’t to say that some networks have tried. But it can be difficult when traditional TV viewing keeps plummeting, and advertising slipping.
Follow the trends lines in both directions: How fast can TV boost streaming services' ad revenues versus drifting lower live, linear TV ad revenue?
In the streaming world, advertising supply has a theoretically unlimited ad supply -- even with that limited five minutes or so of ad time per hour. Legacy TV networks can open up huge libraries of content for streaming, which can be ad-supported.
This isn’t possible on limited broadcast and cable TV network schedules. Still, much of this depends on getting viewers to raise "time spent" with services.
And then figure out what remains for ad avails on those linear TV network schedules.
The hope comes in the form of addressable advertising -- a process that enables marketers to micro-target their key consumers with little to no waste. For marketers, the downside means it’ll cost more to ensure highly valuable targeting. This is where TV networks hope to make up ground.
At this year’s upfront, all major TV network groups talked up addressable and advanced advertising as a competitive advantage against digital media platforms. Marketers aren’t giving up on legacy TV media; they still yearn for its massive reach and scale.
The question is: What will those traditional advertising loads per hour look like five years from now on CBS’ “Young Sheldon” or NBC’s “The Voice”?
Even then, will consumers still stand for that 20 minutes per hour of non-program time? How about 10 minutes an hour? Five minutes? Go lower.
Wayne Friedman is West Coast Editor of MediaPost. You can reach Wayne at wayne@mediapost.com.
Interesting theory, Wayne. However from the beginning daytime TV had two or three times the ad clutter of primetime TV and early evening TV had about double, yet this didn't destroy those dayparts---people---the same ones who watch primetime just got used to many more commercials in the daytime and early evening hours and when late night became popular and the number of commercials rose rapidly, late night viewers---the same ones who watch primetime ----also got used to it. More commercials didn't stop people from watching Johnny Carson, Merv Griffin, etc. In fact commercial recall scores for the daytime and fringe evening hours were about as high as for primetime.
One might say that that was then but now viewers are really in revolt against rising ad clutter on broadcast TV---though not on cable which has 25-30% more commercials than broadcast? And that may be true for some---it's the kind of response you get from polls which ask such questions. But if too many commercials has "destroyed" TV---especially among young viewers who have reduced their time spent the most-----how can it be that TVision's "eye cameras" find that 40% of the program audience still watches an average commercial and keeps their eyes on the screen for about 60% of the message? And how can it be that young adults are only slightly below older ones in this regard? What's more, studies using observational methods found just about the same thing fifty years ago.
So,yes, I agree that ad clutter is a factor--- but only one factor causing cord cutting and the rise of streaming. People are trying to cut their rising TV bills and they like the on-demand aspect of streaming. Moreover, ads are coming to streaming. You just have to find ways to avoid those you don't want to watch---just like in the old days.
I find agreement with the commentary and the comment. Probably the three of us have been in the business quite some time and wonder what is going on. I find myself after 35 years in media, hitting that button changing the channel when I see redundancy with ads and promos on my favorite cable shows. For me, just too many. There should be limitations in commercial time for the success of a business spending marketing dollars.
Yes large commercial breaks are part of the problem. In addition, the wide spread viewing on Netflix and Amazon has given viewers a commericial free environment they are now what for everything.
Daniel, I agree that long, cluttered commercial breaks are disliked by viewers and heighten commercial avoidance. But this is only part of 'the problem" faced by "linear TV" programmers as they lose share of time spent to streaming and other venues. I mentioned the desire to save money on rising "pay TV" bills as well as people liking the on-demand option that streaming offers. Another issue is the nature of "linear TV" programming. The broadcast TV networks ---except for little CW-----all present look alike fare and, typically, it's geared for what they percieve is the mass audience even though this doesn't exist anymore in terms of garnering very high per- episode ratings. As a result, young people who once gorged themselves on shows like "Happy Days", "Three's Company", Get Smart", "The Man From UNCLE", "Laverne and Shirley", etc. etc. watch much less than they once did and now we see older folks also becoming streamers, which means that the attrition will continue for "linear".
My point is that it's a very complicated situation with many factors involved and, frequently, interacting. I bellieve that it's way too simplistic to say the rising commercial load factor"killed" TV. For one thing, "linear TV" still captures 75% of all viewing---maybe only 50% for young adults and 90% for old adults---but collectively, it's far from dead. However, it's evolving, with the TV networks moving into streaming to recapture cord cutters that "linear TV" is losing with essentially the same kind of fare, including commercials.Only in streaming, consumers can make up their own bundles by picking which ad-free and ad-supported services they pay for. That, in my opinion, is probably the most important ---though not the only one---motivation for cord cutting.