TV advertising has hit a wall thanks to streaming options like Netflix

https://qz.com/1240255/netflix-and-other-streaming-options-are-crushing-tv-advertising-in-the-us/

by prostoalex • 8 years ago

73 121 8 years ago

qz.com

msoad• 8 years ago

Only if there was an HBO for sports too. I hate watching those stupid ads when I watch live sports!

jasonkostempski• 8 years ago

I might pay for that if the arena and equipment wasn't also covered in ads. That's never going to change.

antimatter• 8 years ago

Exactly. I think NBA League Pass cuts out the advertising from the local tv networks during timeouts and half time to show the in arena feed (kiss cam, etc). But those are often times ads now as well.

majormajor2• 8 years ago

I'm meh on those sponsorships, but would definitely pay for a commercial-removed sports experience.

People don't realize how much dead time is introduced to professional games solely for commercial breaks.

You can ignore a sponsor logo, you can't get that time back.

tenken• 8 years ago

its called PPV, a showing of an ad-free event. :)

dragonwriter• 8 years ago

Only if there was an HBO for sports too.

There are several. HBO itself is one of them. The sports on them are fairly limited, most notably boxing, however.

alsetmusic2• 8 years ago

Only if there was an HBO for sports too. I hate watching those stupid ads when I watch live sports!

Funny, I came here to comment on my distaste for services, such as hbonow, that throw ads in front of paid content. They place ads for their other shows in front of the thing I’m trying to watch (at least, the web service does). I hate it and I am considering dropping my subscription as a result.

crysin3• 8 years ago

I don't really get this sentiment. I get not wanting to see ads that have nothing to do with the service you're using, but I personally have never been upset or revolted at HBO running their trailers for other shows before the show I want to watch. Everyone has their own tastes and to each their own I just wish I could understand the absolute revolt some people feel at even content relevant ads.

_asummers• 8 years ago

If you get the individual league streaming services, they often show "Commercial Break In Progress" across a semi-static image with no audio during ad breaks.

diggernet2• 8 years ago

Yeah, that's one thing I really liked about MLB.tv.

It's gone. :(

kevincennis• 8 years ago

What would a service like that do during television timeouts?

I’ve found silent “we’ll be right back” screens to almost be worse than ads in some ways. It’s just a weird feeling.

scottwernervt• 8 years ago

Scroll tweets from fans.

diggernet2• 8 years ago

I've always enjoyed those quiet ad-free breaks on MLB.tv. This year they've started filling them with loud , annoying, repetitive ads. Starting to wonder why bother paying for the service.

Spivak• 8 years ago

Just treat it like any other timeout that's shown: show the fans, cut to the coaches, cut to the commentators -- call it exclusive content any you're pretty much golden.

js23• 8 years ago

I rarely watch sports events live. Each sport has a fairly predictable timeline. For example, an NFL game is about 3.5 hours of clock time for what's an hour long game (skipping clock stoppage and half-time). So just start watching 2.5 hours after kickoff and you catch up with real time by the end of the game.

eertami• 8 years ago

The BBC in the UK airs the Superbowl every year, but the BBC is not allowed to show advertisements.

They show the main feed except when ad-breaks happen, at which point they cut to a studio with a host and a couple of pundits who talk about things related to/that are happening in the game.

Works pretty well. We used to get a VPN on and find a US stream to have a laugh at the absurdity of American advertising but these days the Beeb's coverage is more than fine.

ars• 8 years ago

What do people who are there in person do?

The screen can just show the players milling around, or show the fans, or the announcer can give random factoids.

jasonlotito3• 8 years ago

Overwatch League handles this by displaying the stats from players as it counts down till it comes back from ads. I like that. I know exactly how long I have, and if I don't have to go anywhere, the stats are still pretty interesting.

losteric2• 8 years ago

It does depend on the sport, but for basketball they could replay interesting plays, talk about players, theorize strategy, broadcast in-stadium fillers, or just show the team talking.

js23• 8 years ago

During the Winter Olympics, I tried to figure out what I would have paid NBC for an ad-free experience (I watched as much as I could via CBC, but sometimes I just wanted to watch on TV without the VPN rigeramorale). I came up with $300. I would've paid NBC $300 for two weeks of ad-free Olympics coverage.

maxerickson2• 8 years ago

You think there are 3 or 4 million other households that would set the same price?

(they had $900 million+ in ad revenue)

It'd be a fun gimmick if they could figure out a way to auction ad free broadcasts to their viewers.

ChrisLTD• 8 years ago

Advertising has invaded nearly every waking hour of our lives. I'm glad there are services like Netflix that can give us some respite.

marnett• 8 years ago

they have product placement out the wazoo, don't think otherwise.

thewarrior• 8 years ago

Examples ?

ceejayoz• 8 years ago

We've cut the cord, and it's really remarkable when visiting relatives just how frustrating TV ads are to encounter now.

trentnix• 8 years ago

And that constant bombardment has reduced the effectiveness of advertising as well. So it makes sense that advertising dollars would be distributed differently than they once were.

Kenji• 8 years ago

That's weird. There's almost no advertising at all in my life. It all depends on how you structure you life.

paulcole• 8 years ago

You do know there's tons of advertising by way of product placement in pretty much every modern show/movie.

jerf• 8 years ago

I don't find myself terribly upset when someone is just ambiently using a product. It's almost more jarring when something set in the current time & place has someone is using a "Banana" computer, with a bite out of the banana, or something like that.

Of course, if the actors actually take a moment to start extolling the virtues of whatever that's a different story.

thaumaturgy• 8 years ago

Netflix just has some horrifyingly bad and not-at-all-subtle product placement instead (example: http://www.adnews.com.au/netflix-slammed-for-product-placeme...).

And smoking. Lots of smoking.

I liked Netflix insofar as they challenged cable networks and studios, but ultimately it was just more TV and I finally recently gave that up too, and it's been an improvement overall.

0xfeba2• 8 years ago

Everyone and their mother will soon have a streaming service. I predict eventually there will be some streaming conglomerate to allow you to pick and choose streaming providers (Netflix, Hulu, NBC, etc.) with a single sign-on. Right before they package them up as bundles, and we have Cable Company 2.0.

ams61102• 8 years ago

I don't see the value-add there. We already have the common viewer (the browser) and oauth single-sign-on is already widespread -- we don't need a Comcast or any other conglomerate to do that.

time0ut2• 8 years ago

A single monthly bill and maybe a small bulk discount could entice me.

0xfeba2• 8 years ago

Not just OAUTH. A single provider where I can subscribe and add Netflix, CBS All access, HBO Go, etc. at will, without having to register for each. A single monthly bill. And, it works on my Smart TV, not just a browser.

ranger207• 8 years ago

Like Sling? My mother uses them for sports not available OTA, and they have packages like you describe.

googletron• 8 years ago

start advertising through https://brave.com

doubt_me• 8 years ago

Can't install umatrix or uorigin.

Nope.

ams61102• 8 years ago

Incidentally I'm pretty annoyed that Amazon has started running promos for other content in front of the content I selected. I pay for Prime, I don't want to see ads. Even Amazon's.

firloop• 8 years ago

HBO has done this for a long time on their streaming service as well, which is maybe why Amazon thinks they can get away with it. Super annoying.

ibdf• 8 years ago

I agree. I think they can get away with it because Prime is more than just Amazon Videos.

blktiger• 8 years ago

At least you can skip these ads.

munk-a10• 8 years ago

Why do I need to intervene to avoid the crap you're throwing at me?

More precisely, if you threw a water balloon at someone's computer in the office, does the fact that they could have moved their computer make it so that the water balloon throwing never happened?

behrlich• 8 years ago

I've never encountered one of these that wasn't immediately skippable.

lordnacho• 8 years ago

If you have kids they often don't understand that, or they don't quite have the motor skills to click the tiny little "skip" area.

stephengillie• 8 years ago

Do you not wander around your apartment, performing other tasks, while watching shows? It's difficult to skip an ad when your hands are full of pancake batter - or when you're standing across the room, to have a smoke out the window.

mmanfrin• 8 years ago

The worst for me is that FX/FXX shows have ads in the beginning of episodes you pay for. Obnoxious.

undersuit• 8 years ago

Ugh. like how some DVDs would try and make you watch ads for the studios other shows.

freeGuerrilla• 8 years ago

Now advertising will inevitably saturate online content, I am looking at you YouTube

lowmagnet• 8 years ago

This is really the only reason I have a play/red subscription. Of course, this doesn't stop YouTubers from placing sponsored messages everywhere.

crysin3• 8 years ago

YouTubers get a lot more money for their product placements than they do for their views. Hell, almost universally all the Tech tubers did promos for Dyson's new battery powered vacuum. YouTubers don't get a direct benefit for you being a Red member, they're not salaried, and I'd hazard a guess that there are a signifigant fewer amount of Red subscribers than there are subscribers who just use adblocks. Personally no matter the amount of content YouTubers put out I could never justify myself paying YouTube directly for the privilege of not having to use an adblocker on their site.

2474• 8 years ago

I don't watch much TV or streaming services but I do appreciate a funny advertisement[1] when I see it. Granted it never makes me want to purchase the product.

[1] https://www.youtube.com/watch?v=TaldfjkrHy4

Yes, I have childish humor.

sharkweek• 8 years ago

Plenty of data shows people will pay more to avoid ads (https://exstreamist.com/poll-79-of-netflix-subscribers-would...)

Anecdotally, the $4 more a month I pay Hulu for an ad-free version of their streaming service is the easiest money I spend on any entertainment.

SubiculumCode• 8 years ago

I wonder if Netflix or Amazon prime will try to introduce advertising. I notice that they are sometimes inserting ads in the beginning of a movie/episode, but so far only to promote their new show offerings.

lambda_lover• 8 years ago

It's only a matter of time before it's needed to maintain revenue growth...

otakucode• 8 years ago

Thank goodness. We have the Internet. Distribution of content is no longer a task worth a kings ransom. A clever 12 year old can do it in their spare time. These 'professionals' who fall on their face time and time again trying to resurrect their antiquated system which is based solely on the difficulty of getting content from A to B should have been eliminated a decade or two ago. Let us see how well they like capitalism now.

chomp• 8 years ago

Even marquee cable TV shows like The Walking Dead are having trouble holding onto viewers.

You can't cite that, The Walking Dead has story and writing problems outside of general TV viewership declines.

I really hate advertising. There's a lot of investment in human psychology, and I sometimes find myself being seduced by a piece of advertising. They really know how to push my buttons.

It's insidious. Even news articles have paid content. Paid placement for TV and movies (Netflix is not immune to this). It's everywhere, and impossible to escape.

munk-a10• 8 years ago

For me the most revolting evolution of advertisement was when paid content made it's way into the content of articles, i.e. "The Circular investigates which brand of laundry detergent is best for getting out that wine stain"

But I think down the road a bit we'll find out how much advertising has cost us as a society in terms of lost efficiency, it's an externality just like dumping waste into a public water source except the water source is our brain's attention span.

mohaba• 8 years ago

Good. I was long tired of paying to be advertised to.

knightofmars2• 8 years ago

This is all my opinion, I've never understood cable television. You are paying for someone to provide you with advertisements. Sure, you get a lot of channels and content but how many channels does the average person watch and how often are you just turning on "something" to have on? I've never paid for cable but as soon as Netflix DVD delivery came along I was on board and haven't looked back. Going back to watching television with advertisements is akin to nails on a chalkboard now. Which is odd because I still use free Pandora and have no problems whatsoever with their advertising.

wvenable2• 8 years ago

If you're paying for Internet, you're paying for someone to provide with you advertisements in exactly the same way. Cable is merely the delivery method -- the networks and stations themselves are providing the content separately and using advertising to fund it.

If you pay for premium cable channels like HBO then you're actually contributing your money to the production of advertisement-free content.

staplers• 8 years ago

Except Cable is purely an entertainment-consumption medium. Whereas the internet provides tools and services vastly beyond entertainment including creation of content, goods, and services.

The value-cost ratio is absurdly better on the internet.

munk-a10• 8 years ago

It is (or was, I haven't checked recently) very difficult to actually just pay for HBO. I had wanted to get a subscription for a few different shows they offer and every way to get access to them involved paying for cable channel bundles.

I assume cable companies are shoveling money at HBO as fast as they can manage as otherwise it'd be a wise idea for HBO to just begin offering ala carte access to their content and get oodles of free money.

flying_kangaroo2• 8 years ago

If it helps you understand, originally cable tv was a way to pay for tv (as opposed to free OTA) that then had no ads, almost like how HBO operates today. Of course, that could only last for so long.

DaiPlusPlus2• 8 years ago

Cable TV was originally a way for communities outside of broadcast OTA TV reception areas to receive TV signals with little signal-degradation. People paid only for the ability to receive channels - not for the channels themselves. Premium TV came later.

malux85• 8 years ago

I agree - I was staying in a hotel a few weeks ago, and flicked the TV on. I never really thought about it, but it's probably the first time I've watched TV in about 5-8 years - and the number and frequency of ads was just painful. I couldn't understand who the heck would put up with that!

fao_• 8 years ago

I'm pretty sure that this is (or should be) a classic example of boiled frog effect.

Your brain is used to the ads so it tunes them out, the advert makers figure out (using the metric of "how many users complain about advert frequency") how to increase them so that users don't notice. Eventually you end up with a fifteen minute advert block every ten minutes, and you're wondering how it got to that level, but you're still invested in this-one-show-that-nobody-else-has, so you put up with it -- your brain tunes it out the rest of the time so you don't really notice it unless you've had a break from TV long enough.

I think that the UK does the right thing. In legislature they mandate that you can have no more than 12 minutes of adverts per hour of television[1]. Apparently in 1980s America a similar agreement was ruled illegal[2]. Sometimes I wonder how the Americans can put up with American courts, given how obviously biased towards corporate interests they are.

[1] https://www.telegraph.co.uk/culture/tvandradio/8341764/TV-fi...

[2]: ""Many countries regulate the amount of advertising per hour, but a similar industry agreement in the U.S. was ruled illegal in the 1980s."", from: http://articles.chicagotribune.com/2011-02-06/opinion/ct-per...

6DM• 8 years ago

It's the sheer volume of advertising, if you ask me. I remember once trying to sit through an old western flick with my grandpa. It felt like it took the entire day but in retrospect it probably was around 4.5 hrs to completion which is still an absurd amount of time. As a result I never paid for cable until it came bundled with the internet recently.

raverbashing• 8 years ago

It wasn't that bad, let's say, 20 years ago.

Also it was one of the main sources of home entertainment.

munk-a10• 8 years ago

It was indeed that bad, and 20 years ago there were less regulations about advertisement volume so a lot of the ads ran louder than normal programming to make sure the guy who went to go and get his popcorn could still hear about the wonderful effects of fakedrugalenta.

smacktoward• 8 years ago

You are paying for someone to provide you with advertisements.

As was the case with newspapers and magazines for hundreds of years, as well as more and more subscription-based sites today.

The advertisements defray the cost of the thing you are paying for. If they weren't there, you'd have to pay much more for it.

dougmany• 8 years ago

Is it really much more though? Whenever I see a number for how much an advertiser pays per viewer, it is typically small.

drivingmenuts• 8 years ago

And if we had a-la-carte we wouldn’t have to pay for/subsidize channels we don’t need.

ESPN, I’m looking directly at you.

michaelt• 8 years ago

  The advertisements defray the cost of the thing you are
  paying for. If they weren't there, you'd have to pay much
  more for it.

Given that cable with ads averages over $100 a month [1] while Netflix without ads charges $14 a month for the most expensive package [2] I think the purported cost savings from having ads are not in evidence.

[1] http://fortune.com/2016/09/23/average-cable-tv-bill/ [2] https://www.theverge.com/2017/10/5/16429126/netflix-price-ra...

JoeAltmaier• 8 years ago

Nonsense. The cable company is a local monopoly charging what the market will bear. Their costs are a tiny fraction of what they're raking in.

knightofmars2• 8 years ago

While in theory this makes sense the underlying profit motive of the companies being discussed lead me to believe that reality will not conform to the theory. The major cable companies can push upwards of 90% profit margins. If what you posed was true, then wouldn't the cable companies set a maximum percentage for their profit margins (e.g. 30%) and return the gains in the form of reduced cost to the consumers? Additionally, these companies often have their infrastructure subsidized by our tax dollars which further enhances the the actual profits being realized by these companies.

upofadown• 8 years ago

The lack of a change is the surprising thing here. The article could as easily spun it as "TV advertising holding steady in the face of streaming".

milofeynman• 8 years ago

This is only going to increase the cable companies attempts to add more Netflix-taxes to your internet bill. Comcast started it with their bandwidth soft-caps, with $10 per 100gb over 1TB (it was originally 300gb). I'm lucky to be on an isp that doesn't have a cap right now, but I'm sure it's in the pipeline as cable subscriptions fall and advertising dollars decline.

farresito• 8 years ago

Thanks god. Fuck those guys, seriously.

oflannabhra2• 8 years ago

Once the Great Unbundling Event of the 2010s completes, I look forward to the Great Rebundling Event of the 2020s to begin.

But seriously, cable actually did solve a lot of problems. I've never paid for a cable TV subscription, but having to manage multiple services individually is not an ideal solution, either.

maxxxxx• 8 years ago

At some point Netflix will realize that there is money in selling ads and soon Netflix will look like cable TV. It's just a matter of time.

Freak_NL• 8 years ago

Only if its competitors all do this too, and no new competition can fill the gap. Their current business model is profitable, so why resort to something that can only cost you users and risks your current market leader position?

oflannabhra2• 8 years ago

Except Netflix isn't a bundle.

munk-a10• 8 years ago

This will happen when all the smart people have moved on and only the less intelligent sales people and accountants are left.

It definitely will happen eventually but then a great ship-jumping will commence again.

I am paying Netflix to provide a service for me, I will stop paying Netflix if that service includes shoving an advertising pipe directly into my brain.

johnmarcus• 8 years ago

Netflix content has gotten so f&ing boring I'm likely going to cancel my account soon. I'm tired of 500 shows season 1&2. Would much rather prefer 100 shows with season 1-4+. At this point, it's clear they have recruited Hollywoods most seasoned producers, and with it, all the garbage that was already being produced.

wetpaws2• 8 years ago

Based on their revenue I'm pretty sure they know what are they doing

pkulak• 8 years ago

I recently switched my family's main TV over from using the OS on the TV (WebOS, pretty good actually, which is why we used it this long) back to good ol' Roku. My youngest heard about this and burst into tears for a good 20 minutes.

Turns out, he thought "Roku" was DirectTV, which his grandparents have. He was sobbing about how on "Roku" shows keep stopping in the middle (ads, I assume), if you turn off the TV the show doesn't stop, and that if you don't watch a show in time, you have to wait weeks to watch it again.

Once I got everything powered up and he saw Netflix, Amazon, et all, he was just fine again.

soared• 8 years ago

The "downside" to this is that advertising will switch from the old tv model (buying ads based on which show they'll air during) to buying ads in the internet-way (all the creepy facebook targeting, etc). I'm already managing three of these campaigns, using third party data to buy tv commercials on devices like roku and smart tv apps. So it doesn't matter what show the ad airs on because its targeted to the user (household) who is watching the show.

Its around 5-10x more expensive than normal online video ads right now, but 50x cheaper than normal tv ads. Plus you can actually prove someone made a purchase after seeing an ad.

This is called advanced tv or connected ctv (atv, ctv) if you're looking for more info. Streaming on a pc/mobile is called full episode player (fep) and is similar.

thrillgore• 8 years ago

Right now, a third of the TV ads I will see on broadcast are political ads for a candidate that praises the leadership of President Trump. On YouTube, I get ads for the "non-profit" Prager University, which is just full of bullshit.

I personally love that Netflix doesn't have any advertisments, especially polarizing ones.

jasonlotito3• 8 years ago

For YouTube, YouTube Red has been wonderful. No ads at all. At least they have the option.

TV advertising has hit a wall thanks to streaming options like Netflix

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