TCA 2016: “I think it’s got to be acknowledged that clutter is not good for consumers, it’s not good for networks, it’s not good for advertisers,” network boss Kevin Reilly tells TheWrap
Would you watch a three-minute long commercial in exchange for being force-fed fewer total minutes of commercials during an hour of television? Kevin Reilly thinks you will.
The TNT and TBS president announced in a Television Critics Association panel that TNT will begin experimenting with the amount of traditional adverting in its shows. TNT will premiere three new dramas in 2016 that will have 8- to 10 more minutes per hour of programming time than a typical ad-supported TV drama. Those extra minutes will come courtesy of shorter commercial breaks.
But parent company Turner also wants to experiment with ad structure. As it moves to reduce the number of ads in its original shows, it will also play with new ideas, such as three-minute commercials and integrated ad campaigns.
Reilly believes viewers are hungry for that kind of change.
“They’re certainly not loving what we have now,” Reilly told TheWrap. “I think it’s got to be acknowledged that clutter is not good for consumers, it’s not good for networks, it’s not good for advertisers.”
Zero clutter is a big selling point for ad-free streaming services such as Netflix, which has had subscriber levels grow while cable sheds customers at a rate that has alarmed Wall Street. Reilly is betting that fewer, less-intrusive ads will improve the viewing experience.
But it’s a high-stakes bet. Turner won’t be able to sell fewer commercials without leaving money on the table.
“In the short run, do we subsidize some of this? Perhaps,” Reilly said. “Look, if we as an industry don’t stand up and meet the challenge, so be it. But we’re saying this is what we’re willing to do.” So far advertisers have been “pretty enthusiastic,” he said. The depth of that enthusiasm will be tested this spring at upfronts, the ad sales orgy where most television advertising is sold.
Long-term, Turner hopes audiences will migrate to a network with better programming and less invasive advertising, and that ad buyers will migrate with them.
“One component is that as program time increases, viewing time increases, therefore the ratings increase,” Reilly said. “So that does give us the ability to potentially charge more.”
But TNT and TBS are already, on the strength of syndicated reruns of shows like “Law & Order” and “The Big Bang Theory,” among the top-rated networks on cable. They’re not going to grow ratings so much that they could then jack up ad prices to levels that would compensate for all the revenue lost from selling fewer commercials — especially at a time when customers are ditching cable and advertisers are turning to digital. A recent report by Magna Global predicted that digital ad spending would overtake television ad spending by the end of 2017.
Reilly is trying to prepare for a future in which cable channels are less important to Turner’s overall business. The Time Warner-owned company acquired video streaming company iStream Planet last year with an eye toward streaming.
“There’s a reason television advertising does work,” Reilly said. “I know nobody watches ads, quote unquote. But if that was the case, advertisers would have left and stopped spending billions and billions years ago.”