Skinny TV Bundles Could Impact Ad-Free DVR Watching

New digital live, linear TV network services sound great when compared to pricier traditional pay TV packages. But one major component won’t necessarily be similar with new so-called "skinny bundles" — the ability to skip TV commercials via DVR technology.

For Google’s new YouTube TV, the DVR option will be eye-opening for many new customers: You’ll be forced to watch commercials on time-shifted programming.

Perhaps that doesn’t come as much of a surprise. Versus other new so called “virtual” multichannel program distributors, current YouTube TV deals are mostly only with the big TV-media network groups, which own broadcast and cable networks. 21st Century Fox, NBCUniversal, CBS, and Disney-ABC Television, all big companies which have depended on traditional TV advertising for years.

TV advertisers, naturally, favor their commercials to be seen, not skipped over.

TV network groups already started protecting this process years ago with ad-supported video on demand that runs on many traditional pay TV providers. Viewers can’t skip through commercials on those VOD platforms. It makes sense that they would want to continue this effort with new business.



Ironically, Hulu’s proposed live, linear TV service gives consumers the ability to fast-forward through commercials. At least right now, anyway. Hulu is owned by three major TV-based companies: Comcast Corp. Fox, and Disney-ABC. Time Warner has a smaller stake than the three original media owners.

All this isn’t to say that cable-only network groups, such as Viacom or Discovery Communications, want their advertising clients commercials to be skipped over. But it does bring up value issues for new digital services vis-a-vis their network partners.

Looking at other OTT services, Sony Playstation Vue and Sling TV currently allows fast-forwarding of commercials.

And then there is price.  

Attached to the $30 or $40 one might pay for these skinny bundles, you may have to pay $5 extra for a “cloud” DVR a month. That’s the case with Dish Network’s Sling TV.

Big TV-network players not only want to find ways of reversing the growing commercial avoidance trends, they would like to keep most of the same deals points from pay TV providers -- cable, satellite, and telco -- when it comes to new VMVPDs in the future.

They have been able to leverage all -- or most -- of their networks in deals with cable/satellite providers’ basic networks packages -- including significant revenue producing sports networks, such as Disney’s ESPN and Fox Sports channels, shows not all TV customers may want.

Other growing commercial avoidance options for consumers are those ad-free SVOD services, Netflix, Amazon, and the ad-free service from Hulu -- which could be paired with digital TV antennas to get over-the-air ad-supported TV stations -- with full DVR capabilities.

Will customers continue look to traditionally skip TV commercials? Maybe they'll just skip the skinny bundle.

1 comment about "Skinny TV Bundles Could Impact Ad-Free DVR Watching".
Check to receive email when comments are posted.
  1. John Osborn from Turnstilâ„¢, April 17, 2017 at 11:24 a.m.

    Thanks Wayne - great piece.

    As a former agency planner and buyer, I always knew some commercials were being avoided. We all (content providers and agencies) got too greedy in the 1990s when TV networks could make more money with more ads, and buyers could keep prices down with more supply. DVRs and now ad-blockers have put technology for ad-avoidence in the hands of the consumer. No one, especially younger viewers who have no intention of buying bundled cable, will willingly be "forced" to watch commercials.

    Such options, I believe, are a strategy by the networks for up-selling to higher cost commercial-free streaming services. See recent CBS All Access/The Good Fight marketing that supports this theory.

    Where does that leave advertisers? It's time to rethink the entire approach to T/V (TV & Video) buying and using technology to track viewability on a census level data. It's time for paying a higher CPM for ads that are actually seen, and end the cat and mouse game.

Next story loading loading..