For decades, there have been some consumers that would go to excessive lengths to skip ads. They would record shows on VCRs (by today’s standards a complicated affair). They purchased DVRs. They resorted to piracy where ad-free versions of shows could be found. Overall, they engaged, not only in the program by program costs of ad removal, but also invested in sometimes expensive technology to help them do so. In 2002, Turner broadcasting CEO, James Kellner, called this behavior:
… theft. Your contract with the network when you get the show is you’re going to watch the spots.Otherwise you couldn’t get the show on an ad-supported basis. Any time you skip a commercial or watch the button you’re actually stealing the programming.
And today, we have NBC chair, Ted Harbert responding to Dish Network’s new ad skipping function on their DVR:
And finally, we all know that advanced technology provides new options to virtually every business. But just because technology gives you the ability to do something, does that mean you should? Not always.
Here’s a good example that popped up late last week. Did you hear about the new Hop initiative from Dish? With their new DVR, you hit a button on the remote and all the commercials in a program just disappear. Gone. You don’t even have to fast forward through them. Please refer to my earlier comments about our ecosystem. This is an insult to our joint investment in programming, and I’m against it.
So broadcasters don’t like ad-skipping. That is hardly news.
But I wonder: when we see consumers continually trying to evade something, is it time to ask: what happened if TV networks relaxed somewhat? Would it really be that dire?
Let’s work it through. Who are the people spending money and time avoiding ads? Remember, ads interlaced with TV programs are designed to slip into the attention of the mesmerised but otherwise inactive viewer. So the people who are actively trying to avoid ads really hate them. Now, if you are an advertiser, do you really want to know that your content provider is doing everything possible to keep those most annoyed consumers? It would not be a stretch to suppose that consumers who get annoyed by ads don’t exactly get positively influenced by them. So if networks embraced ad-skipping and perhaps got from providers like the Dish network some real statistics on the numbers of consumers who actually viewed the ads, then they could tell advertisers that their metrics comprised viewers who had the option of skipping over ads but did not. Surely, that is a more valuable product to advertisers.
Now the implications of this are, in part, worked out in a paper I recently published with Simon Anderson. What could happen is that what broadcasters make up for in higher advertising prices does not compensate for the loss in advertising views. But equally the reverse could be true. A more significant risk is that there are some programs where consumers will go to more lengths to skip ads than others. This technology could jeopardise their funding. However, this would suggest that such programs will move to ad free/subscription networks. Think about what program came to mind that you wanted ad-free. Chances are it was already on HBO.
Embracing ad-skipping could have a positive effect on advertisers too who would have an incentive to make ads more relevant and less broadly annoying. All in all, I wonder if networks might be better off in this day and age by accepting ad-skipping and retuning their business models to the positive aspects of it rather than a long and, I suspect, ultimately unsuccessful fight against it.