Traditional cable TV networks -- and others -- are looking to make an uncomfortable advertising transition.
Viceland, a venture with A+E Networks, has already drawn in big advertisers in
preparation for its launch. Unilever PLC, Bank of America, watch and apparel maker Shinola, Samsung, T-Mobile and Toyota are among those that have signed on, according to the Wall Street Journal.
The network says it will carry only about 9
minutes an hour of advertising time -- about half of the 17 minutes to 18 minutes per hour many cable networks air. And, within a year, the plan is that half of that advertising will be native
advertising.
At the same time, more-established cable networks like Viacom’s MTV, and Turner Broadcasting’s TNT and truTV pledged to cut advertising time on their networks. Turner
has said it could make up to a 50% cut.
This has been long overdue: For years cable TV networks have had on average, more advertising clutter per hour than broadcast networks.
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And now
you have companies like CBS toying with the idea of creating an ad-free option for its budding OTT
service, CBS All Access. Besides its current $5.99 a month option -- which includes advertising -- there could be a $9.99 a month ad-free option.
Last fall, Hulu -- perhaps to compete
more effectively with the likes of Netflix -- started up an ad-free option for $12 a month, to supplement its limited-advertising subscription of $8 a month service.
What gives?
Can we guess some futurist minds are looking at the bigger picture, foreseeing a time when revenues aren’t coming from traditional cost per thousand viewer prices, and their expected yearly
increases?
Future revenues may come from a combination of higher priced “native” advertising -- a modern form of traditional TV ad “branded” entertainment -- and from
increased customer revenues from new apps and/or new over-the-top platforms.
Even then, in the near term, OMD’s Chris Geraci wonders how the new Viceland network model can survive in
today’s short-term-driven profitability model for new TV network ventures.
Sure. For Viceland, and others, if consumers get the hint their networks offer less messaging, perhaps they
will stay around for longer periods. Advertisers would like that.
But how will consumers get that message? Will networks deliver this via on-air TV promotions that say “We run less
advertising, come watch us.” Perhaps, “We run less advertising. Pay your bills, and we’ll still give you great content.”
If they can somehow figure out that
all-encompassing new TV brand identity, it would be a key model for many to copy.