TV Networks Stuff in More Commercials Despite Vows to Cut Back

Shocking!  Many TV networks continue to increase ad loads despite public promises to do otherwise.

Why this is happening: In order, to maintain/grow revenue while ratings are down you can either increase the cost of advertising (CPMs) and/or you can increase the number of ads that run during a program.  Many networks are finding it easier to increase ad loads than ad rates.

Quote from Michael Nathanson – Analyst @ MoffettNathanson:
“Look at the decline in ratings…Everyone’s got pressure to make their quarterly numbers. Long-term, it’s a very bad decision, but you don’t want to miss your numbers and have your stock go down.”

Ad minutes per hour by network according to MoffettNathanson:
1) 
Viacom – 14.3
2) 
A+E – 14.0
3) 
AMC Networks – 13.0
4) 
Turner – 12.5
5) 
NBCUniversal – 12.0
6) 
Discovery – 11.6
7) 
Disney – 10.5
8) 
Fox – 10.4

Flashback #1: Hulu cuts ad breaks by more than half

Hulu commercial break lengths (% change):
1) 
Old – 180 – 240s
2) 
New – 90s (↓ 50-63%)

Flashback #2: YouTube begins showing twice as many ‘pre-roll’ ads

Key findings from NBCUniversal on the impact of reduced ad load:
1) Ad Likability — ↑ 38%
2) Likelihood to search for a brand — ↑ 39%

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