Ten Years Later, Cable Industry Finally Realizes More Ads Is Not The Solution To Cord Cutting
from the who-knew? dept
For years we’ve noted how the traditional cable TV industry is slowly-but-surely bleeding customers tired of paying an arm and a leg for bloated bundles of often terrible programming. And for just as long we’ve documented how far too many cable and broadcast executives are hell bent on doubling down on all of the bad behaviors that cause these defections in the first place. That has ranged from knee jerk price hikes in the face of growing streaming competition, to efforts to stuff more ads into every viewing hour, whether by editing down programs or speeding them up to ensure maximum commercial load.
The ugly truth most cable and broadcasting executives can’t face is that the era of the sacred cable TV cash cow is over. Television simply isn’t going to be as profitable in the wake of real competition and the more flexible, cheaper pay TV alternatives that competition is providing. And while countless industry executives still somehow think this is a fad they can wait out, there’s growing evidence that at least a few industry executives are finally getting the message.
Fox executives, for example, last week signaled that they intend to dramatically lower the ad load to two minutes an hour across their networks by 2020 (it’s currently 13 minutes for broadcast networks and 16 minutes for cable):
“The two minutes per hour is a real target for Fox, and also our challenge for the industry,? said Ed Davis, chief product officer for ad sales at Fox Networks Group, in an email. ?Creating a sustainable model for ad-supported storytelling will require us all to move.”
By “move,” Davis means “actually compete and adapt,” which should be a no brainer after watching ESPN lose ten million audience members in just the last few years. The old model of hammering customers with as many ads as they can stomach (and then some) while also charging massive subscription fees is finished. That’s something even Comcast NBC Universal execs seem to realize as they also aim to cut ad load during prime time shows by 10% and the number of ads during commercial breaks by 20%:
“The industry knows that television is already the most effective advertising medium there is, but we need to make the experience better for viewers,? said Linda Yaccarino, chairman of advertising and client partnerships at NBCUniversal, in the statement. ?We?re reimagining the advertising experience for consumers, marketers, and the entire industry.”
It can’t be understated how hard it was for the industry to come to the realization that perhaps it needed to annoy its paying customers less and compete a little more. Many of these same executives have spent the better part of the last decade either ignoring or downplaying the cord cutting threat, many arguing it was just a fad that would end once Millennials began procreating more (that didn’t happen). Combined with the rise of more streamlined and expensive alternatives (Dish, Sling TV, AT&T’s DirecTV Now, etc.), there’s some real signs of evolutionary traction in the stubborn sector.
That said, there’s still plenty of opportunities for these companies to double down on bad behavior on other fronts. As TV becomes less of a money maker, many companies have just started jacking up the price of broadband (via either usage caps and overage fees or obnoxious hidden fees), given there’s no competitive repercussion. And with the looming death of net neutrality, the use of anti-competitive tactics to jack up your TV/Phone/broadband bill in other “creative” ways is going to grow as these companies seek out their pound of flesh elsewhere.