
To combat falling ratings, TV networks are increasing ads up to 10% - bane
http://www.businessinsider.com/bernstein-report-confirms-tv-networks-are-increasing-ad-stuffing-2015-8
======
bane
There must be a law somewhere, where some business exec comes up with terrible
schemes to squeeze more and more blood from a stone:

\- let's fire the engineering staff to improve the profit figures

\- let's slowly fill up content channels with so much advertising, consumers
can't read/watch/listen to the media they're trying to access

\- let's sell subscription access with a promise of no ads, then slowly
introduce ads until the subscription payers are also earning significant money
per ad

\- let's reduce the quality of our product so we can improve the profit
percentage

\- if cars only last 5 years, consumers will have to buy new ones! (planned
obsolescence)

\- let's see how much we can carve out of this shrinking pie

\- etc.

These kind of harebrained schemes seem so obviously stupid from the outside,
but they keep showing up over and over again. It's like there's a population
of con-artists who've managed to get into positions of influence in lots of
companies, and will pitch and sell these ideas and make them happen, then
everybody is aghast when the company tanks shortly after...meanwhile the
"proven idea guy" goes on to another company and shows "improved profitability
by 21% and revenue by $3mil/quarter blah blah" and slithers in to another
decision making position where this happens again.

~~~
hliyan
It works because of the short term nature of modern corporate goals. A lot of
stockholders are institutional investors looking to buy low and sell high,
rather than long term stakeholders in the company. Neither they, the board and
there for the CEO has any reason to see beyond a 1-2 year horizon unless the
company is in really good shape.

~~~
billforsternz
I think there is quite a lot of related irrationality outside the corporate
world. You see it in environments like a committee of volunteers running a
club for hobbyists. "Subscription income is down therefore we must raise our
subscription fees" seems to be obvious and common sense to many, maybe most
people. Pointing out that this is most likely to have the deadly unintended
consequence of driving current members away and further reducing income often
seems to be fighting against the tide.

~~~
altoz
"Tax revenue is down so we must raise taxes"

Yep, definitely happens a lot outside the corporate world.

~~~
ptaipale
It also works as "Tax revenue is up, so this is proof that taxes are not too
high, so we must raise taxes".

~~~
gjm11
You get the reverse too. Tax revenue is down, so we must help the economy grow
by reducing taxes. Tax revenue is up, so clearly we are taxing more than we
need to and we can reduce taxes.

Taxation doesn't quite fit the pattern we're talking about here, anyway. If a
TV channel increases its ads, the obvious failure mode is that viewers go
elsewhere instead (and hence advertisers spend less and revenue falls). But
inter-country mobility is small enough that even quite large changes in tax
rates aren't likely to make a lot of taxpayers go elsewhere. You occasionally
hear rich famous people threatening that if some potentially tax-raising party
comes into power they'll leave the country, but they don't generally actually
do it.

(That may be different for corporate as opposed to individual taxes. Large
multinational companies may be willing and able to move their operations
around to minimize the taxes they pay.)

~~~
darkmighty
I believe he was thinking of runway economic effects -- e.g. tax revenue is
down so 'Let's increase taxes!', while doing so could lead to further economic
slowdown and less taxes; this effect is less obvious and doesn't necessarily
happen imo.

------
downandout
It isn't just that they are stuffing more ads in. I have noticed a huge spike
in what I call "program guide fraud" \- networks indicating in the program
guide information they provide to cable systems that an episode of a show is
new, when it is in fact a rerun. This causes any DVR programmed to record only
new episodes of a show to record the rerun, which fraudulently inflates DVR
views, which leads to increased ad rates and ratings.

Some shows have taken a slightly less fraudulent, though equally frustrating,
approach. 60 Minutes remixes old segments into "new" shows, but the only thing
new about them is the order in which the segments appear, along with a total
of maybe a minute in added commentary or updates on the segments. Whenever you
hear "as we first reported..." at the beginning of a segment, that's a remixed
segment. Nightline has also been remixing old segments into most of their
"new" shows over the summer.

TV is dying, and the networks are turning to fraud and annoyance to try to
save themselves. I can't imagine that it will work.

~~~
a3n
I don't know if it's "fraud," but Netflix's "Recently Added," "Recently
Released" etc categories are just plain cynical, at the least.

~~~
HCIdivision17
I've been wondering if maybe they just switched something in the backend and a
whole bunch of shows got confused metadata. They're not at all what would be
interpreted as "Recently Added". Charitably, my only guess is the system just
doesn't detect that certain shows used to be in the line-up. Cynically, I
imagine someone in their management is taking advantage of a bug and calling
it a feature.

------
brc
TV is already mostly unwatchable. As people channel-surf more to avoid ads or
boring TV, the TV shows try and adapt by regularly recapping what has happened
before the last ad break. So they spend less time on the content and more time
on ads and then recapping after the ads.

The results are poor quality shows which are even less desirable to watch.

It's hard to view it as anything other than a death spiral.

~~~
tajen
I live in France where I wonder whether there's a law against abusive ad
sequences, because they're much less intrusive:

Movies/programs start at 9pm. The ad breaks are at 9.45pm and 10.30pm. It
means most movies (1.30) have only 1 ad break, series such as X-Files and 24
hours are displayed with uninterrupted episodes. Football games match this
format.

At high school, those who went to Spain or UK discovered the poor state of TV
in the rest of the world. We're lucky.

~~~
umanwizard
Must have been strange watching 24 in France, then. In the US, the time in the
story was set up to align with ad breaks, so when it was XX:47 (for example)
in the story, it was always 21:47 in reality.

~~~
david-given
Living in the UK with the ad-free BBC, you could always tell US import TV
series because they had 45 minute slots rather than the 30 or 60 minute slots
of the local content.

The first (and only) time I saw an episode of Star Trek on US television I was
shocked when I realised there was a commercial break immediately after the
credits. (I turned it off in the disgust.)

~~~
petepete
This is why I cringe every time I hear people badmouth the BBC. I'd pay double
the licence fee for it, it's that good.

------
nvader
"The beatings will continue until morale improves..."

------
optimiz3
Sort of related, it's always felt odd that Hulu Plus (paid) forces ads on the
user.

Seeing as time is extremely valuable, why not provide an option to skip ads?

F2P games figured this out long ago, you annoy users into paying to make the
pain go away.

~~~
alyx
Apparently there is a subscription version of Hulu on the way, which will be
ad-free.

~~~
HNaTTY
A Hulu++ you say?

------
mc32
This tactic is desperation. Short-term profits for a long-term loss. People
will migrate to a more tolerable alternative.

Alternatively, they're just squeezing as much juice as they can from the last
fruit. They know the end is nigh for network TV so they might as well burn it
all the way down.

------
venomsnake
I think that Steve Jobs nailed it. People are willing to pay a lot for the
experience. Right now bittorrent gives the best TV viewing experience at all.
You click, you download, you watch. No logins, no DRM, no bullshit.

Until TV can beat the quality of that experience - they are doomed.

~~~
joshstrange
I'd argue usenet + sonarr/sickbeard (+sabnzbd/nzbget) + plex is even better
but I agree overall. I pay for TV, Netflix, Amazon Prime, etc but I rarely
watch content on those platforms. Plex is just so many times better and I'm
not dependant on my crappy ISP.

------
icanhackit
Would it be safe to deduce that the decision to counter-intuitively add more
of what people dislike is due to executive remuneration being tied to share
performance i.e. they don't give a shit if the whole things tanks as long as
they vest and get out while they're seemingly profitable?

I say this under the assumption, perhaps naively, that the people in charge
are aware that the decision, long-term, is not a very good one and they're
playing strategically for their own ends (rather than simply being pants-on-
head stupid).

~~~
Asbostos
Is it really a bad idea? Will people actually get off Facebook and watch more
TV if the ads were shorter? I suspect ads aren't the reason TV viewing is
declining and aren't going to accelerate it much.

------
tired_man
When I was very young, and broadcast television was still in its infancy, a 60
minute network show contained about 50-52 minutes of content.

Today, you can feel _very_ lucky to see as much as 44 minutes of content per
show.

Personally, I don't care if they stuff 54 minutes of commercials into each 60
minute show. I'm not going to watch the show as it's broadcast. I'll watch it
on netflix, stream it, or download it. In any event, as far as I'm concerned,
the commercials never happened :-)

------
oldpond
That's the same logic as "ratings are down, let's create more channels, cuz
people like variety". They ended up diluting their captive audience even more
resulting in even worse ratings. Time to turn off the TV, and that includes
internet TV. You really won't miss it.

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mullingitover
Well, when you're in a death spiral, spiral as hard as you can I suppose.

------
dragonwriter
I think the relationship between falling ratings and increased ads may be
different than the title communicates.

In fact, it has to be for the specific numbers cited, since they are
simultaneous rather than the action occurring before the response, but even
though the reported numbers are simultaneous, its likely one occurred first
and there is some kind of cause-and-effect relationship, but even assuming
that the decline trend leads the ad increase rather than the two being
lockstep or the order being reversed, it may not be that the ads are strictly
to "combat" the falling rating so much as being a response to the perceived
market characteristics of the remaining audience -- if networks believe that
the remaining audience is less sensitive to the quantity of advertising,
increasing advertising makes sense (just as if a product has a smaller but
less price-sensitive market because of a new competitor stealing the most
price sensitive part of the market, increasing prices and focussing on other
differentiating features may be a more successful strategy to maximize profits
in the new market reality than price competition -- this is a fairly exact
analogy, since ads are essentially a price consumers pay for TV content.

------
acomjean
As someone who lives in the US in a competitive senate race (and has a nearby
state that are politically important, competetive and share tv markets).

If more states had competitive elections in the US, including splitting
electoral college votes, they could solve their stations revenue shortfall and
get a cut of that sweet sweet PAC money.

Plus I'd like everyone in the country to feel the pain of non-stop election
advertising. Maybe then campaign finance reform might show up.

------
rickdale
No surprise TV ratings are falling. The graphical user interface for my cable
has to be over a decade old and zero updates have ever been done to it. DVR is
an alright option, but I always pass right into the show, and on some networks
it disables! fast-forward.

As ESPN continues down the road of being unwatchable, I honestly think the
only thing carrying cable television in America is football. This year the NFL
will broadcast one game over the internet. If, or rather when, that becomes
the norm, cable subscriptions are going to drop at a faster rate than they are
now. I enjoy being able to put something on really fast, but cable television
reminds of the music industry as CD's died.

------
ddingus
This isn't going to help the ratings.

If they were paying any attention at all, they would see what happened to
radio when they jacked up the ADS. More ADS per hour did improve revenue, but
that improved revenue came at a loss of audience.

There is a curve function, and it's complex. No ADS will deliver a nice
audience, assuming the program is compelling enough, but no revenue. A few ADS
will do just about the same thing, but deliver revenue.

From there, as the AD rates ramp up, audience will drop off and at some pivot
point there the value of the AD, due to insufficient audience impressions,
drops off impacting both revenue and audience.

If you ask me, TV is already well into the pivot point.

~~~
jfoster
It's more complicated than that, though. Content quality/cost is also a
factor. This problem is multidimensional.

~~~
ddingus
Indeed it is.

I do believe the AD / content axis is dominant. Quality can do some damage on
the problem, but the move to lighter AD loads is clear. We are close to 50/50
and worse at times now. Completely unacceptable to growing numbers of us.

The thing is almost nothing can't wait. So I will, if nothing else. Buy it
straight up AD free. Worth it.

------
mirimir
Originally there were no ads on cable ;)

------
PhantomGremlin
I've got one four letter word that really helps counter this trend:

    
    
       TiVo
    

But they get very little love. People would rather watch 10 hours a month of
commercials than pay $10/month to bypass them.

And there's also laziness. I've seen so many people with cable company DVRs,
but they don't FF thru commercials. Huh? Not only are the commercials mind-
numbing when viewed for the 50th time, but there's also the matter of 20
minutes lost per hour of viewing.

~~~
danieltillett
I think a lot of people like ads. I personally hate them, but I have noticed
other around me don’t seem to care.

~~~
WalterBright
Back in the 80's when I first got a VCR, I taped some shows. Ironically, today
the old commercials are more interesting than the old show.

~~~
tomswartz07
For your viewing pleasure: [http://www.retrojunk.com/commercial-
index/new](http://www.retrojunk.com/commercial-index/new)

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toast0
This is like stuffing more ad units on a page. It might help your revenue in
the short term, but it turns off viewers, and it turns off advertisers; so
next quarter you're in the same spot, but with less room to put in ads.

If I were running a tv network, I would be doing whatever it takes to get ad
rates up now, since next year is an election, and there's some rule about
charging all political ads the same price, fixed based on earlier rates.

------
nugget
I saw an interesting stat recently: the average hour of broadcast TV has
traditionally had between 12 and 18 minutes of advertising, whereas on the web
the most people seem to put up with is about 6 minutes per hour. That means
that even in a best case where ads transition over to web along with all tv
viewership (and people don't favor ad free, subscription services), 2/3rds of
that advertising medium is gone.

~~~
wldcordeiro
That's for now, I wouldn't be surprised if over time it meets or exceeds the
TV minutes.

~~~
yareally
I'm sure it will eventually meet TV in # of commericals, just most potential
advertisers haven't made the full leap into online video ads yet and content
publishers are probably reluctant on increasing video ad quantities until
they're certain they have an audience that will accept them.

People once said the same thing about satellite and cable being great because
they didn't have as many commercials as traditional broadcast TV. Once cable
channels had broadcasting quality on par with traditional TV and audiences
committed to watching their shows, commercials increased until they were on
par.

------
antihero
What I do hope is that things like Prime and HBO Go succeed. TV is already
going down the shitter, and I don't know any millennial peer that actually
still watches it (it's so backwards, why would we want to tell us what we can
watch and at what time?).

What I do hope is that Netflix doesn't become a complete monopoly, else
they'll stagnate.

------
mifreewil
I feel bad for older folks who are less capable/willing to adopt newer
technology. Give the grandparents a hand, eh?

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anigbrowl
That's why I don't like watching it! Cut the number of ads and increase the
price, watch viewers flock back.

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syense
seems a bit like they are punishing the loyal. id think that you could drop
commercial percentage in an effort to lure viewers back and make up for the
loss of revenue by time with an increase in viewership? or perhaps the
commercial boat has already sailed and a new revenue model is needed.

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user_235711
This is hilarious. I would never pay for cable anyway because advertisements
are just repulsive, even when the volume of them (in both senses) was slightly
lower a decade or two ago. But whenever I happen to be in a hotel room and
happen to turn the TV on I am just amazed that it is actually possible to
click through nearly 100 channels in sequence and see nothing but commercial
after commercial on. And if I do find something to watch it seems like every
two minutes or so I have to mute the TV because it starts yelling at me to buy
pharmaceuticals. Definitely not sad to hear that this medium of communication
is in trouble because the internet alternatives are amazingly and obviously
much better.

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stephen_cagle
I really find it amazing that even to this day there is not a dynamic process
for inserting adds into tv programming. Cable box should simply see that this
tv watches NOVA, Star Trek, and Saturday morning cartoons. Because of this, I
am a nerdy guy who may have kids. Reduce if from 3 minutes of 6 ads to a
single minute long add. Something really specific like Disney Vacations,
science kits for the kids and their parents, whatever. It isn't even a privacy
thing necessarily. Cable box could be the only one that actually "watches"
what you watch; streams in all possible adds and decides which adds to display
to you based on its private (and un-shared) knowledge.

------
forgotAgain
Original source article: [http://adage.com/article/media/commercials-
tv/299810/](http://adage.com/article/media/commercials-tv/299810/)

------
tempodox
So, that would mean, the audience hates the program but if you show them more
ads instead, they will not switch channels because the same ad is so much
better on your channel than on any other?

That's really fascinating, I had no idea.

------
Animats
Myspace tried that. How'd that work out?

~~~
danieltillett
-$545 million. Not one of Rupert’s finest investments, but I suspect he lost more on the WSJ.

------
asnyder
If anyone's interested, I know Telestream's Tempo
([http://www.telestream.net/tempo/overview.htm](http://www.telestream.net/tempo/overview.htm)),
is super popular as it can actually cut and/or interpolate frames from
content, to allow content producers to run more ads, without any perceptible
difference from the viewer perspective.

------
fapjacks
I'm pretty sure this tactic is going to work brilliantly to get people to
watch more television. I'm pretty sure.

------
jacquesm
Which will drive more people away from watching TV which will require an even
more aggressive approach.

Maybe TV networks should start an 'ad free Saturday' or something like that to
combat the failing ratings?

Show the first episode of something without ads on that Saturday and the
follow up on some random day of the week.

------
xupybd
Oh no we are getting out competed by online vendors, I know lets crap all over
our product.

------
wheaties
Radio did the same thing. Now we all use anything but radio.

------
RobLach
That's like your if solution to surviving an increasing number of hemorrhages
is to pump in more blood.

~~~
nvader
Hmm, I'm not a doctor, but that sounds pretty reasonable to me.

------
Radle
They are feeding the cancer, that is feeding upon them...

------
ryanolsonx
Seems counterintuitive..

------
Everhusk
Fighting fire with fire

------
justwannasing
For some reason I can't access the article at the moment but, when I was in
radio and TV, years ago, the FCC restricted how many advertising minutes you
could run in an hour or per show. I want to say that, in radio, you couldn't
go over 13 minutes in any hour but few dared to approach that limit except the
kiddie rock-n-roll stations lest they turn away listeners.

iirc, that ruling has been removed.

