Last week, NBC Universal announced they will cut commercial time by 20% during primetime programming this fall. Yesterday, Fox stated they hope to trim advertising on their networks down to just two minutes per hour by 2020.
“We feel like we work in this attention economy, and essentially where this market has gone sideways is that we’re not properly valuing the consumer’s time and attention,” said David Levy, the executive vice president of non-linear revenue at Fox Networks Group. “There’s more things competing for your attention than ever, so the price of attention has gone up.”
As more people take to cord-cutting, using services such as Netflix, Hulu and Amazon Prime which have no advertising during their programming, linear TV networks feel the pressure of appealing to the modern day customer.
“There are more and more consumers, whether it’s from Hulu or the Netflixes or Amazons of the world, who are liberated via technology” from having to watch the sheer number of advertisements shown on traditional television, said NBC’s chairman of advertising, Linda Yaccarino. “TV networks would be crazy to believe that anything other than commercial overhaul was anything other than inevitable.”
According to Nielsen, the average amount of commercial time per hour on linear television during 2017 was 13 minutes for broadcast TV and 16 minutes on cable. Brian Wieser, a senior advertising analyst at Pivotal Research Group, told CNN some networks air up to 20 minutes of ad time during one hour of programming. With the current large amount of commercial time on television, a future decrease for Fox to just two minutes per hour is difficult to imagine.
As the way people consume content modernizes, more sponsors have looked toward advertising on digital platforms, affording networks to cut commercial time on traditional television. According to Magna, digital ad sales are expected to reach $237 billion this year, compared to $183 billion for television. If networks receive more income from digital advertising, they can limit commercial time on traditional television, providing more original content to viewers.