Fox announced a goal of reducing TV ad time to 2 minutes per hour by 2020.
Current/Proposed ad time per hour (% change):
1) 2018 – 13m
2) 2020 – 2m (↓ 85%)
How could Fox potentially make up the lost revenue from fewer minutes of ads?
1) Increase the cost of each remaining ad
2) Run shorter ads (6s, etc.)
How would the math for #1 work?
1) 2017 Primetime — $43/CPM
2)2020 Primetime — $280/CPM
A 3rd option. Hulu is testing interactive ads that let the user buy products such as movie tickets directly in the ad. Ads that lead directly to sales would command higher prices (think Google search CPMs).