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%.