With US Network Television Viewing Numbers Down This Year Fox Is Going To Try Something New For The New season To Lure Them Back – Cut Back On The Ads

Philip Stone May 22, 2008

True culture shock for most Europeans visiting the US is to turn on the TV and watch around 18 minutes of ads in every hit one-hour series – programs that they could watch at home a few months later with likely no ads at all.

Truth be told when one has gotten used to spending just 41 minutes without commercial interruption watching Grey’s Anatomy, House, CSI, Desperate Housewives and all the rest, it’s real difficult to watch them when they have so many interruptions that last 18 minutes in total.  Yes, there’s a price to pay to be rid of the commercials – in Switzerland for instance, an annual television license costs  462 Swiss francs ($440, €290), but you know what, for the enjoyment value it’s probably money well spent.

Fox, the most-watched US network for the TV year that has just concluded, has decided less commercials may be a good thing, too. It says it is going to cut the advertising in half for two new shows that it will premiere this fall.  Instead of just 41 minutes of actual series, there’ll be 50 minutes of actual series.

Not that Fox is being benevolent; it is going to charge advertisers much more to be part of the 10 minutes given to ads, the thinking being that less clutter, less ads, will draw viewers and with more eyeballs that means the ads should cost that much more.  It’s calling its gamble “remote-free TV” – meaning that with less commercials the viewer will be less likely to switch channels when a commercial comes on.

“We need to give viewers a reason to come to broadcast,” says Fox chairman Peter Liguorri. “We’re going to have less commercials, less promotional time and less reason for viewers to use the remote. We’re going to have more character, more content, more value.”

Jon Nesvig, Fox’s advertising sales president, said, “This is a huge risk, but we have to do a better job for our viewers.” In reality he’s probably onto a winner – less commercials means tighter inventory and thus higher-priced ads.

It’s all part of television reinventing itself in the new digital age. Ben Silverman, co-chairman of NBC Entertainment, said at a symposium earlier this month that he believes within 15 years broadcast television will be mostly live events such as big sporting events and award shows. For other shows to be a success, he said, they’ll have to be available on multiple platforms.  

And multi-platform seems to be taking off with the networks experiencing huge increases in their monthly streaming. Nielsen Online says, for instance, that Hulu – a joint venture between Fox and NBC – transmitted 63.2 million streams watched by 2.4 million unique viewers in April.  And networks are selling ad time for their streaming, usually to one advertiser per show and with just a couple of interruptions per program and that doesn’t seem to bother the viewer. Indeed, the Starcom media agency says its research indicates that viewers are more apt to remember ads they see on those network streamings than they do when watching TV. Because of less clutter?

Streaming TV programs may still be in its infancy but it is advancing so quickly that many advertisers now are signing up when buying TV time also for the digital streamings. The networks are convinced that in the years to come they will make millions from multiple platforms for their programming.

And while there may be a move on to limit the number of commercial interruptions in a program there seems to be no limit how many times a product gets promoted within a program. Nielsen says that the broadcast networks saw a 39% increase in product placement during Q1, 2008.  The top 10 programs featured 15,404 product placements during the period compared with 8,893 in the same period in 2007.

Fox and the other networks are seriously worried that in today’s TV world when the commercial comes on the remote goes to work – either changing channels or on the digital video recorder to zap through the ads. That’s a particular problem since this was the first television year in which the networks sold advertising based on a rate of how many people watched the commercial rather than how many people watched the entire program.

That’s why Fox Chairman Liguori told advertisers, “The business needed a jolt. Everybody has been talking about business initiatives that have nothing to do with the audience.”

Most of the Madison Avenue seemed to think that indeed less may be better than more. Gene Dewitt, who has worked in the media advertising business for more than 40 years and who is now a consultant, told Advertising Age that he thinks Fox’s initiative is “brilliant”. But he scathing in his view of how ad agencies are reacting to the new realities of television, indeed he sees the agencies as a big problem.

“The ad agency industry needs to wake up to the fact that ‘the new media’ are not going to save them from obsolescence; in fact, the new media options give people even more control over the ad exposure experience. More importantly, television in its broadcast and network forms remains the most effective marketing communications medium yet devised and since it is the driver of content for virtually all platforms it will be around for many years to come.

“Perhaps the ultimate result of integrating ads into programs will be that the ad creation process will be taken over by people who understand what viewers want: the networks and their production companies. Something has to replace the damage being caused to TV by the destructive dinosaurs we call ad agencies.”

The Fox initiative to reduce by half the time taken by ads has the possibility to really change TV habits. Before, it was how many ads can be sold rather than how many ads were okay. A change in that kind of thinking is yet another reason to welcome the digital world.