The battle between cable television and streaming services has gone a step further in its intensity and reach. Netflix, Amazon Prime Video and the other streaming services are replacing traditional TV in homes around the country, causing cable subscriptions to drop and ad revenue to plummet. Now it’s culminated in TV dragging advertisers into the middle of the fight just to help keep themselves afloat, but it’s a move that will only hurt cable in the end. All advertisers have to do is hold their ground and television will finally have to make more meaningful changes.
TruTv has decided to cut commercial times significantly in order to win back customer trust and prevent more viewers from fleeing to streaming services. Starting in the 4th quarter of 2016, the Turner-owned network will only show 10-11 minutes of commercials per hour, down from their current 18-19 minute standard. President and head of programming at TruTv, Chris Linn, believes that “we have a generation that has grown up with access to content that does not have commercials. In order for us to remain relevant to them, we have to deliver the most premium experience possible.” As part of that premium service, viewers will see less commercials, but advertisers will have to pay more per ad, since there will be less space and fewer competing advertisements.
TruTV isn’t the first network to experiment with a move like this, as Viacom has also decided to cut commercials on MTV, VH1, Comedy Central, and Nickelodeon during primetime, displaying 14-15 minutes instead of 17-18. They will also be charging advertisers more, due to less advertising space. It works great for the customer, but it becomes problematic for the advertising industry, as heightened ad costs cut into profits.
While less commercials might stem the tide of subscription cancellations for now, it won’t prevent people from jumping to Netflix or Amazon. The price of network television just can’t compete with streaming, especially when the latter comes with no commercials and its own original programming. If this practice of cutting commercial time down catches on and becomes a new standard, it will crush local advertisers who can’t afford premium pricing and force the bigger firms to reevaluate–after all, Netflix doesn’t have commercials.
Advertisers will then see the obvious: since TV is decreasing their ad times in order to keep customers from jumping ship, they are admitting that less people are watching. No one wants to to pay more money for a smaller audience, so it is in the best interest of the advertisers to not support this new status quo. Instead of dealing with higher prices and smaller profits, advertisers could look to internet content producers like Youtube and social media ads, which might be a more productive use of their time and money anyway. There is then a real possibility that television’s own plan to save itself will actually doom what is left of cable.
Advertisers can’t align with Netflix or Amazon, but they can take themselves out of the fight entirely, by finding lucrative opportunities elsewhere. If advertisers show they are unwilling to pay for cable’s mistakes, the industry will have no other choice but to find a more permanent solution. Networks like CBS and HBO have already developed their own streaming services and this might be the direction television ends up going in.
Once streaming services take over, there are bound to be companies that will go with tiered membership platforms that could feed ads to customers who are not premium users–like what Hulu does now. In order to help local advertisers, services could offer a targeted ad platform that would serve advertisements based on internet service–like TV already does –or even GPS. By standing their ground, advertisers can tap into the possibilities of the internet and influence a new age in television without losing any revenue.