UPDATE, THURSDAY PM: Some of those increases in ad clutter were’t as egregious as MoffettNathanson Research’s Michael Nathanson first thought, he says today in a correction to his analysis. The data he received from TiVo “incorrectly calculated the number of commercial minutes,” he says in a note. That included “a massive error” for Fox Broadcasting: Its ad load in Q4 was “flat-to-slightly down” — not up 12% vs the period in 2013. He adds that the calculation for Viacom didn’t count all of its networks. A complete tally shows ad time up “mid-to-high single digits” vs the +8% he reported. And Discovery was “up low-single digits,” not +5%.
Although the corrections don’t change the basic thrust of his piece, he says that from now on he’ll compare the data from TiVo against Nielsen Monitor Plus.
Bernstein Research’s Todd Juenger, who also used TiVo data, says he calculated his numbers differently and is “completely confident in the report, our methodology, and conclusion.”
PREVIOUS, WEDNESDAY AM: Bernstein Research’s Todd Juenger calls it “desperate,” and MoffettNathanson Research’s Michael Nathanson calls it “dangerous.” But both analysts, using data from TiVo, say this morning that the trend is unmistakable: Major TV network owners led by Viacom, A+E, and Discovery significantly increased the amount of prime time commercial minutes in their shows in Q4, helping to compensate for a decline in viewing.
It’s an important consideration for investors as they await media companies’ Q4 financial results — and views about whether digital platforms are beginning to siphon ad dollars from TV. Increasing clutter is short-sighted, Juenger says, because “viewer engagement is certainly reduced” leaving buyers reaching the “brain-dead.” And that “doesn’t seem like an attractive audience target for many brands, except maybe certain infomercial products.”
He singles out Viacom, A+E and Discovery as “the worst offenders” among major cable network owners when you factor out sports and kids programming, with commercial time increases of more than 3.5% vs the last three months of 2013. Time Warner “was close behind,” particularly at Adult Swim and TBS. Indeed, Viacom and A+E accounted for nine of the 10 most ad-loaded cable nets. Leading the list are CMT (with 109.1 prime time commercial hours in the quarter), Lifetime (98.6), MTV (98.4), TV Land (97.4), and VH1 (95.5). [It should be noted that Juenger is one of Viacom’s most vigorous critics.]
Nathanson — who has identified the ad clutter problem before — also observes that it’s easy to become hooked on the strategy and to keep adding spots to cover up for weak programming. As radio companies discovered a decade ago, “once the genie is out of the bottle, it is nearly impossible to put it back in.”
Among the broadcast networks, his tally shows that Fox increased commercial time by 12%, with CBS +1% while ABC was down 2% and NBC dropped 7%.
But in cable “the most aggressive network owners were those with the worst ratings trends,” Nathanson says. His measure of commercial time showed Viacom +8% (with its target demo C3 audience down 15%), A+E +6% (audience -24%), Discovery +5% (audience -6%), Scripps Networks +2 (audience -4%), and NBCUniversal +2% (audience -13%).
The only company that cut airtime for ads was Disney, -4% even though its cable audience was down 5%.
This is exactly why I have given up on paying high cable rates. Why should the consumer get hit both ways? Enough is enough.
Yikes, where are all the viewers going? I knew broadcast viewers were rapidly aging, but it doesn’t look like younger viewers are going to cable. I think it would be good to see some in depth analysis of industry trends here, as something bigger than the success/failure of specific programs is clearly going on here.
Viewers (especially younger ones) are going to streaming services. I cut the cord years ago and no longer have broadcast or cable. Don’t miss it one bit. Netflix could work on their streaming library (I have to supplement it with their DVD service) but even adding that, for $16/month, you get eveeeeerrryyything imaginable – old and new shows, old and new movies, documentaries…what cable service costs $16/month? For thousands of titles, easily accessed via search? And remember, this is with NO ADS.
What’s missing here is a streaming service with a healthy sized library offering free streaming with ads. (Hulu charges for their ad-based service – nope, you show me ads, I don’t pay). I don’t think the market has vanished for ad-supported free viewing, as long as nobody goes crazy with the ads (and definitely none of that obnoxious crap with ads at the bottom of the screen while the show runs). To advertisers, this would be El Dorado because of the ability to track the behavior of viewers and target ads. They’d all come flocking back for a service like that, with a decent sized viewership.
works unless you are a sports fan
Boo hoo.
I have a nephew who is 13, and I don’t see him ever owning a land line telephone or a conventional broadcast TV connection. He carries a mobile phone everywhere he goes and rarely makes a call, just texts and social media mostly via WiFi. He watches more YouTube than anyone I know.
The generation that says goodbye to the current phone and cable providers isn’t coming, they are already here. It’s all going to come down to which service can bring the biggest data pipe to the customer. Any provider that hasn’t spent most of their development dollars on strengthening themselves as a dedicated ISP will be bankrupt inside of 15 years.
Hell, I’m 42 and we cut the cord in 2009 and have not looked back. We watch Netflex, Youtube, Amazon Prime, and ‘other’ sources. We have no land line either. Not just the kiddies doing this.
Don’t they realize that just makes us watch less?
And don’t they realize that all it takes is, I dunno … a good show?
I won’t watch any Network shows until they’ve been on long enough to hit Netflix because I got sick to death of getting invested in a show only to have them cancel it. How can so many of these idiots not realize they have to revamp the business model? They remind me of vaudevillians trying to hang onto vaudeville long after it’s dead.
Netflix IS the “revamped business model.” It’s all going to the streaming services…the studios will create content they license to Netflix/Amazon, et al while cable companies like Comcast become fully ISPs. Aggregating huge (global) audiences into a few streaming services allows for niche content targeted at specific tastes without demanding large audiences, so nichey, interesting little shows will not get cancelled so quickly.
The missing business model here is a truly free, ad-supported streaming service with attractive content. Advertisers would adore the ability to target viewers. Amazon was making noises about that a few months back, I wonder if that will happen.
Yup. Circling the drain…
I pay a rather large fee each month to my cable company to watch TV, over 200 per month, for that I get to watch TV shows that are sadly lacking in entertainment value, I think a hour long show is down to 40 minutes or so once you get past the commercials. I know find it much better watching Cable Channels I pay for HBO, Showtime and so on, watch a show with no commercials, has 10 to 12 shows the run uninterrupted, these long layoff’s of shows in Winter, Spring Breaks or what ever we lose interest in the show and momentum a story may be telling.
I see the time coming real fast were I pay to watch each show I want with no commercials, entertainment companies cover their production costs, and make money cause in the end this is all about making money, I’m sure some companies would be very content to make 20 million or so for a show weekly.
Network TV is all but dead, actually it is dead, the giants they are they do not realize time has passed them by.
DVR everything (including live sports). Then watch about 1 hour later, zapping through the commercials. On Verizon Fios, the remote has a “fast forward 30 seconds” button to zap through each commercial pod within seconds, or about 6 zaps (= 3 minutes of commercials).
I am ALL for any effort to reduce the number of ads on TV. We started paying for cable because it was “no-ads” TV, supposedly the money we paid for cable made up for the advertising. Now there are more ads than programming. I will definitely watch more of any network that reduces ads.
Its pretty pathetic how many cable nets have instituted the promo bump in the last 10-15 minutes of a show where two ad pods are separated by a non-sequitur piece of 30 second content from the show meant to get DVRs to stop FF and watch hoping they don’t FF the second ad pod. Its like Carls Jr coming out with a “Natural” burger, admitting the weakness of its product, Carls Jr doesn’t make real burgers and TV consumers don’t watch commercials in cable content they DVR. Advertisers are wasting their $$$
This is simply one more reason to get out of watching Live TV. I almost never do – except for football. Every other program can wait, even an hour to watch, so that the commercials can be run through. And with these additions to commercials, even the DVR is becoming a pain in the ass with the time it takes to get through them, vs. the seamless ability to watch on digital platforms.
Pay-TV is skating on thin ice, and their habit of raising prices while lowering the quality of what are offering (In this case cramming even more advertising into what’s being shown) will only lead to one thing, OBLIVION. In the 50+ years the Lord has seen fit for me to live in this world I have seen LEGIONS of businesses, many of which were once household names do the same thing and where are they now? They are all dust in the wind. A house divided against itself CANNOT STAND.
I own an online horror channel, American Horrors, and because of the corporate attitude of grinding a viewer into the ground, we launched our network with zero commercial breaks during the feature films. Same with the short films. They play through, then we play commercials. Our network is free to watch online via the Filmon.com platform & we’re finding our viewership numbers climbing & climbing due to corporate bumbling.
So if you’re tired of all those boring commercials selling drugs with endless warning lists, tune to American Horrors & keep the horror fictional.
Hart D. Fisher
Here come the cord cutters. They’ll blather on about how much they are saving and the quality of content they have access to. But there is one thing cord cutters will not mention. Advertising always finds a way.
Avoiding ads isn’t 100% perfect, I see advertising all the time with newspapers and magazines as well as other means (Things that DON’T make me a member of a “Captive” Audience). In three days one of the most unusual days of the year will fall upon the land. On this day (February 1) an event will be televised, and people will actually LOOK FORWARD to watching commercials. They will cheer at the good ads and boo the bad ones. Ironically most of the good ads will only be seen on this Sunday, while most of the bad ones will run on and on and on…
If Advertisers want people to see their ads why don’t they look at the ones airing during the Super Bowl that get the best reviews. You can attract more flies with honey than you can with vinegar.
PS. Mounted on the dashboard of my pickup truck is a device that emits soun effects such as machine guns, phasers, photon torpedoes, Bombs and Missiles. With the exception of the first effect all have explosions at the end. I use this device every time I pass by a billboard (ESPECIALLY the one with that infernal reptile hawking his insurance!). I block spammers on my computer and whenever the phone rings and caller ID indicates its a telemarketer I have a tape player which has several songs recorded on it that can play tapes BACKWARD! I say “Hello!” turn on the player and then sock it to ‘em!!!
So advertisers are female dinosaurs?
In every failed their is a success waiting just never lost hope God is watching ..
Waaaaaaaaaat?!!
At the rate viewership is going, it will soon be more ads than show.