NBC Smells Cord Cutting On The Wind, Will Reduce 'SNL' Ad Load By 30% Next Season

from the adapt-or-die dept

Tue, Apr 26th 2016 6:31am — Karl Bode

For several years now we've noted how instead of adapting to the cord cutting age, many in the cable and broadcast industry have responded with the not-so-ingenious approach of aggressive denial, raising rates as fast as humanly possible, and stuffing even more ads into every television hour. And when broadcasters can't get the ads to fit, they'll just resort to speeding up or editing programs to ensure that they're hammering paying customers with more ads than ever. Given the rise in alternative viewing options, this obviously isn't the most ingenious form of market adaptation.

But in a sign that somebody over at the Comcast NBC Universal media empire is at least making a fleeting attempt at sector evolution, the company has announced that it will be dramatically reducing ad loads in some programs. More specifically, the company says it will be reducing the advertising load in each episode of "Saturday Night Live" by around 30%:

"NBC's "Saturday Night Live" is paring down its commercial load, with plans to cut about 30% of ads out of the sketch comedy show next season. It will do this by removing two commercial breaks per episode, giving viewers more content, said Linda Yaccarino, chairman-advertising sales and client partnerships, NBC Universal."

The catch? The company's going to be experimenting with more native, sponsored, and product placement advertising as part of the attempt to combat cord cutting and ad-skipping simultaneously:

"And for advertisers, NBC will also be offering a limited opportunity to partner with "SNL" to create original branded content. These native pods will only occur six times a year, Ms. Yaccarino said. "As the decades have gone by, commercial time has grown," Lorne Michaels, creator and executive producer, "Saturday Night Live," said in a statement. "This will give time back to the show and make it easier to watch the show live."

While it's not entirely clear what these "native pods" will exactly look like, it's not so much an evolution in advertising as it is a return to the bygone era of fifties TV sponsored product placement:This isn't NBC's first flirtation with making a 180 industry turn back to content of this type, and the company has previously stated that advertisers can pay $300,000 or more just to get their feet in the door with product placement and native ads. And while quality and humor are certainly subjective, the problem is NBC's past experiments on this front really aren't that funny, and occasionally stumble into what feels like desperation. That opens the door to damaging your brand if your attempt to pitch laundry detergent or pharmaceuticals during a sketch is too ham-fisted.

NBC and advertisers are responding to the fact that prime time ratings and traditional cable TV subscribers continue to drop. Nielsen (the same company that used to call cord cutting "purely fiction") notes that most broadcasters continued to see up to a 4.1% decline in the number of homes tuning in to traditional television last month. That's again thanks to both cord cutting and "cord trimming," or the act of cutting back on the number of channels or premium networks a users subscribes to -- both in turn a response to high prices, restrictive viewing options, and flagging quality.

And while creatively experimenting with how ads get delivered is certainly part of the solution, it's not going to be a substitute for the one thing broadcasters (and by proxy cable companies) have been totally unwilling to do: offer the same content at a lower price. Ultimately the sector's going to have to take it on the chin, lose significantly more money, and begin seriously competing on channel bundle flexibility and price. That's an utterly unappealing proposition for an industry used to raising prices at four-times the rate of inflation, but the alternative is letting pesky, innovative upstarts walk away with legions of younger, disenfranchised television viewers.

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Filed Under: ads, commercials, cord cutting, native advertisers, product placement, saturday night live, snl

37 Comments

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Violynne (profile), 26 Apr 2016 @ 6:08am

"As the decades have gone by, commercial time has grown," Lorne Michaels
What hasn't grown is an ability for a CEO of an entertainment industry to think beyond its own damn idiocy.

If the industry wants to change, it needs to do the following:
-Remove the mindset that the captive audience exists. Long gone are the days of forcing people to pick one show over another, so why still program shows like it exists? Stupid.

-Stop with the idiocy of affecting DVR recordings. The stupid "end a show early or start a show late" to purposely screw with DVR recordings is a fantastic way to ensure people stop using cable services, morons.

-Definitely stop with the 1/3 screen bombardments of whatever show the network is showing next, or tomorrow, or Thursday. Viewers are well informed on what shows the network airs, so stop treating them like they're two.

-Stop with the hiatus crap. If the network can't put out a show consecutively, don't waste our time. Reruns? Save those for future Netflix or Amazon licenses.

-Here's a brain tumor inducing idea to some executives: STOP PAYING ACTORS MORE MONEY THAN THEY'RE WORTH. Pro-tip: most people tune in for the story, not the actors. As we've seen many times, you can replace people without anyone caring (Fresh Prince, Bewitched, Last Man Standing) or completely remove them without anyone caring (Happy Days, Family Matters).

To pay a bunch of kids $1 million each to sit around a damn couch and make jokes is the reason why "commercial time" has grown.

Oh, and one more thing: perhaps, and this is just a recommendation, NBC actually make its own content instead of paying an arm and a leg for other productions?

Netflix is doing it, and NBC should be mindful of this, because once Netflix has enough original content of its own, no one will need NBC anymore.

So wake the hell up.
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Ninja (profile), 26 Apr 2016 @ 6:54am

If done right, ads won't really annoy. It's just that it has gone out of control lately. Companies try to place ads everywhere they can to the point some placements actually look silly. And if they can they will flip the same placement to show more ads.

I'd say this is as bad to them as it's annoying to us. If you increase the number of ad placements and time ten-fold then you are greatly increasing the offer. But this takes value away from advertisement as their effectiveness start to drop.

And, really, if I'm paying for no ad then I want no ad. End of the story.
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Ninja (profile), 26 Apr 2016 @ 6:58am

Re:
STOP PAYING ACTORS MORE MONEY THAN THEY'RE WORTH

This. I'd go for soccer players too and paying scientists what they are worth but that's another story.
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Anonymous Coward, 26 Apr 2016 @ 7:18am

Almost makes you feel sorry for the industry
Almost.
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PaulT (profile), 26 Apr 2016 @ 7:36am

Re: Re:
With your point, there's fundamental issues at play - namely that too many people value ball games over science. While those players continue to bring in obscene amounts of money, they will get paid whatever FIFA or whoever think they bring in. Same with TV stars, what they're "worth" is how much money they inspire others to spend, not what they contribute back to humanity.

That's a sad reality, but there it is.
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Andy, 26 Apr 2016 @ 8:06am

in the UK there is a free to air channel that offers a catchup service. Over the last couple of months they have started inserting more and longer adverts into their online catchup. Of course you cannot skip these (while you can fast forward the DVR'd broadcast version).

While I will happily accept some ads on a free to air TV channel offering catchup (like I'll accept some ads on websites)- It's getting silly as regular 'live' broadcast and just drives me away again so I won't use their catchup...
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Jason, 26 Apr 2016 @ 8:13am

Re:
Reruns? Save those for future Netflix or Amazon licenses.
I'd actually like if they did show reruns of current shows...something overnight a few weeks later or whatever would be fine. For those of us who don't feel like subscribing to something (Netflix, Hulu, etc.) just for one show it would be nice to get a second chance to DVR an episode if I miss it, or get a weather ticker on screen for the whole show or something.
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That One Guy (profile), 26 Apr 2016 @ 8:13am

Almost but not quite good enough
While something like this might help to slow the losses of customers sick of more commercials than shows I don't imagine it will be enough to entice very many people who'd dropped the service to come back.

Once people get accustomed to on-demand services like Netflix or Amazon's offering it becomes rather difficult to convince them that 'Watch when it's on or miss it completely' is anything more than a hassle, one best ignored, and 'slightly less commercials' isn't really going to cut it for most and convince them to put up with that hassle.
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I.T. Guy, 26 Apr 2016 @ 8:20am

30% less commercials on one show nobody I know even watches anymore.

Yup, that'll do it for sure. /s
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mcdruid (profile), 26 Apr 2016 @ 8:24am

SNL has always been ad heaven
If they are cutting SNL ads by 30% means that it will only be 50% ads now.

That will raise their funny joke per hour ratio to just over one.
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Whatever, 26 Apr 2016 @ 8:27am

When ads become all the more intrusive, it'll be pirates who everyone will put at blame. Just you watch.
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Anonymous Coward, 26 Apr 2016 @ 8:36am

But I can cord cut and still watch SNL because that is an over the air/free channel....WIN!
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Anonymous Coward, 26 Apr 2016 @ 8:42am

Re:
"As we've seen many times, you can replace people without anyone caring (Fresh Prince, Bewitched, Last Man Standing) or completely remove them without anyone caring (Happy Days, Family Matters)."

Geeze Gramps, couldn't come up with examples from *this* century? :)
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Anonymous Coward, 26 Apr 2016 @ 9:12am

This miniscule ad cut won't do anything to help them, but maybe if they said they were going to permanently lower your cable bill $20 a month they might notice something.
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Anonymous Coward, 26 Apr 2016 @ 9:32am

Re:
I agree, remove all ads or reduce the bill considerably and I might be interested.
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DannyB (profile), 26 Apr 2016 @ 9:45am

Re:
Bravo! Let's also stop paying executives more than they're worth.
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DannyB (profile), 26 Apr 2016 @ 9:46am

Good luck with product placement NBC
It is the reason I completely quit watching CBS. Never even looked back.
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John85851 (profile), 26 Apr 2016 @ 10:14am

A double-edged sword
This is a double-edged sword: on the one hand, 30% less ad content sounds good, but on the other hand, the show now has to fill that time. Does this mean an extra sketch on SNL? How will this affect the writers and staff? Will they have to put in more work to come up with extra sketches?
Or will the time be filled by lengthening the opening or closing credits?
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Anonymous Coward, 26 Apr 2016 @ 10:16am

Market shifts should not be so painful
If the government had less regulation, created less monopolies and duopolies, the market would change much faster. Instead, entertainment companies get protectionist laws passed that allow them to cling to the old business models until the last minute delaying the inevitable and the future.
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Anonymous Coward, 26 Apr 2016 @ 10:19am

Re: A double-edged sword
What? You are worried about the staff? Seriously? You don't think they get paid well enough?

The market will figure it out. They will be compensated for the value they provide or they won't. If they aren't they will quit and go elsewhere.

Why is it so hard to figure out that the market will dictate things like this? Maybe people will start watching YouTube where people get paid very little to produce their own content? If the creators are willing to do it then who cares?
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PRMan (profile), 26 Apr 2016 @ 10:22am

Re:
And if I EVER see a countdown timer to a show. I make a note and ensure that I will NEVER watch that show.

I watch TV to relax. The ticking clock makes it seem very stressful.
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fly, 26 Apr 2016 @ 10:35am

Re: Re:ointment
couldn't help yourself could you?
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Michael Long (profile), 26 Apr 2016 @ 10:44am

Re: Almost but not quite good enough
I watch Netflix or HBO Now or occasionally buy a movie or series from iTunes to watch on my AppleTV.

I do not watch commercial cable television with advertising. Period.

Five minutes of content interlaced with (seemingly) five minutes of ads? And, usually, always the same ads?

Drives me crazy, so I cut the cable TV cord years ago.
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Anonymous Coward, 26 Apr 2016 @ 10:51am

Re: Re:
Now that the suits generally agree that software development is "low skill", surely that applies to upper management too, doesn't it? I can't think of a higher paid low-skill occupation that CxO, so isn't it time we offshored all upper management jobs and saved a fortune for all the companies involved? I'm sure we could find plenty of Indians capable of doing their jobs and only asking a small percentage of their wages and other expenses...

Don't occupy the 1%, outsource them.
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DannyB (profile), 26 Apr 2016 @ 11:11am

Re: Re: Re:
While I like your thinking, here is how it will play out.

1. Upper management continues to outsource all of the jobs that require actual skill or talent.

2. People who discover that they have reached adulthood with no useful skills or talent will go into Marketing or Management.

3. Eventually Management's dream is realized. All unskilled talentless people are domestic and highly paid. All skilled and talented work is done by underpaid foreigners.

What they don't see coming.

4. Eventually other countries, who now have all the talented and skilled people will recognize that they can just create their own businesses without the top heavy layers and layers of bureaucracy and management. They'll out compete US companies.

5. Profit
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Coyne Tibbets (profile), 26 Apr 2016 @ 11:41am

What's 70% of 145%?
What? Ummm, yes, the ad load did increase by 45% this year, but we're definitely rolling the load back by 30% at the start of next year.
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JBDragon (profile), 26 Apr 2016 @ 12:18pm

Re:
Except you now have more Product Placement Ad's. The ones really driving me up the wall lately are all the Microsoft Surface Product placement ad's into all kinds of shows. It makes me not ever want to buy one.

I did cut the cord 4 years ago. I'm not going back ever. I get most of my TV from a Antenna and Netflix. So I already get NBC and SNL though I can't remember the last time I watched SNL. It's all recorded onto my TIVO Roamio, and these days, it's now a 1 button push to skip all the commercials for each break.

How a 30% cut in one late night weekend show and adding more Product placements changes anything? Are these people this dumb? How about the Insane prices you push onto cable company's in the form of Re-Transmission fee's!!!! Something that in fact helps YOU get more viewers to watch your channel so you can charge more money for Ad's!!! There should be no fee, yet it's never enough. More and more money which in turn raises Cable costs much faster then inflation when in the end people have enough of the high costs and CUT THE CORD!!!
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xtian (profile), 26 Apr 2016 @ 1:04pm

Re: A double-edged sword
Actually, they produce a lot of skits that end up being "cut for time." They are performed and recorded in the studio, while the t.v. audience watches ads. You can see some of them on the SNL Youtube channel. So no problem with a few extra minutes of programming.
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CharlieBrown, 26 Apr 2016 @ 5:01pm

Graham Kennedy
One of the early performers on television in Australia was Graham Kennedy, host of many shows throughout the years. One of his first was "In Melbourne Tonight" in the 1960's. Now, every night, he'd be given a sponsored product to sel and almost every night he would take the absolute piss out of the product, from dumping his co-host into a bath of dog shampoo, to taking a bag of chips, crushing the chips into crumbs before pouring the crumbs out of the bag and then saying it was a rip off as you only got half a potato's worth in the packet. Every product he picked on, sales would then go up, amny of the things he did in those segments remain as funny today as they were 50-odd years ago. I wish TV could be like that now.
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Anonymous Coward, 26 Apr 2016 @ 8:27pm

Thank god we have TechDirt to keep us informed on these topics! What with unlimited bandwidth and the 1Channel addon for Kodi, I'd practically forgotten about ads. Thanks TD (and thanks, Kodi and Primewire even more)!
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Whatever (profile), 26 Apr 2016 @ 10:23pm

Hard to understand where you are going...
"And while creatively experimenting with how ads get delivered is certainly part of the solution, it's not going to be a substitute for the one thing broadcasters (and by proxy cable companies) have been totally unwilling to do: offer the same content at a lower price."

You of course realize that NBC is OTA, totally completely and utterly free? There is no cost related to viewing SNL unless you choose to pay someone for cable rather than receiving it OTA. Most cord cutters freely admit that they have rabbit ears or another form of antenna to receive the free OTA. So arguing about cost to view SNL is a total non-starter.

The real take away here though is that (just like with adblockers online) they are just going to move to a model that is in the end even more annoying, turning their "content" into "advertent". So that may mean product placements, ad signs, lower third advertising, brand name usage in the programming, and the like. It's way harder to filter out, and potentially even more valuable to advertisers. It's also more annoying to viewers in the long run. It turns every programming into a sort of disguised informercial, with the content of the show perhaps skewed to fit the products rather than the other way around.
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Anonymous Coward, 27 Apr 2016 @ 12:02am

Re: Hard to understand where you are going...
That sounds like corporate seppuka to me; gut the programs to keep increase the advertising load.
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Violynne (profile), 27 Apr 2016 @ 12:31pm

Re: Re:
Geeze Gramps, couldn't come up with examples from *this* century? :)
Well, considering I don't watch traditional TV anymore, nope.

Those examples I pulled from a quick search. :D
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John Fenderson (profile), 28 Apr 2016 @ 8:20am

Re: Re: Re:
You hit the nail on the head.

How much money something is "worth" is the exact amount that someone else is willing to pay for it. No more and no less.

The fact that we as a society are willing to pay insane amounts of money for jobs that contribute relatively little to improving people's lives, while insanely underpaying those that have a large impact, is seriously depressing.

It's one of the reasons why I have a disdain for professional sports and the upper tiers of the entertainment industry.
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John Fenderson (profile), 28 Apr 2016 @ 8:23am

Re: Hard to understand where you are going...
"You of course realize that NBC is OTA, totally completely and utterly free?"

Two points:

1) Since the digital switchover, lots of people are no longer to receive OTA broadcasts at all.

2) OTA is not free. You pay for it with the ads. So this debate is not about whether or not viewers will pay, but rather how much they will pay.
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Anonymous Coward, 28 Apr 2016 @ 6:09pm

Re: Sunken Chests
Looks like you will be heading to Somerset then & taking on an unusual accent.
Another stunning win for the broadcasters.
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Anonymous Coward, 28 Apr 2016 @ 6:15pm

Re: Hard to understand where you are going...
"It turns every programming into a sort of disguised informercial, with the content of the show perhaps skewed to fit the products rather than the other way around."

I have been getting the impression that many TV shows are just one long advert, broken up by blocks of annoying ads.
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