This article on how TV execs want to stop you from skipping commercials is a great example of misunderstanding customers.
Mike Shaw of ABC says,
“I’m not so sure that the whole issue really is one of commercial avoidance. It really is a matter of convenience–so you don’t miss your favorite show…People can understand in order to have convenience and on-demand (options), that you can’t skip commercials.”
Here at home, we would rather channel-surf for 45 minutes or catch a half-hour show while the show we want to watch is recording, then watch it with no commercials, than watch it live. I am sure I am not alone. The 45 minute delay is preferable to the commercial interruptions.
The heart of this issue is actually the second part of that quote; it’s really about business models. The TV network is concerned about ad revenue drying up, particularly in the face of rising costs. It’s a reasonable fear.
But I’ll tell you what — we also frequently stop in our fast-forwarding, go back, and watch commercials that catch our eye. Which indicates that there is in fact something that would entice us to suffer the interruption. The question is what.
In our case, it’s commercials that are funny enough; promos for new shows that look interesting; movie trailers; catching sight of someone (as they flicker by) that the family has paid attention to in the past; for example, after watching American Idol, we ended up sitting through a Ford commercial featuring Taylor Hicks. Recently, it’s also been ARG ads — most recently, the one for Mada Corp, a fictitious company related to the TV show Kyle XY.
This quote:
“I would love it if the MSOs (multi-system operators), during the deployment of the new DVRs they’re putting out there, would disable the fast-forward (button),”
reminds me of the old item in the Laws:
Looking at what parts of your game players tend to automate is a good way to determine which parts of the game are tedious and/or not fun.
and
Philips recently received a patent for a device that would disable a video recorder from switching channels during a commercial break. There would be an option for viewers to watch the ad or pay a fee to unfreeze the fast-forward capability.
vaguely makes me think of RMT as a way to skip past the tedious parts of a game — or even of the business model inherent in games such as Entropia, Second Life and There, where you have to spend money to get out of the doldrums of not being able to do anything fun. Not too long ago I had a conversation with a friend where he commented that he was blown away watching the World Cup, because the game kept going and there were no interruptions — real evidence of how much we have grown accustomed to having our life be bombarded with the spam of commercials.
A business model built on giving customers what they don’t want only works as long as customers don’t have choices. In the case of commercials, this particular genie is already out of the bottle. TV companies would be better off they if pursued things like truly targeted advertising, for-fee episode downloads, seamless product placement, and other such techniques that don’t interfere with us getting the latest content we actually want. What’s the AdSense of TV?
38 Responses to “Misunderstanding customers”
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At the very least, they could make commercials much shorter and fewer. Decreasing the surrounding advertising makes your ad more valuable. Long commercial breaks are necessary in a world of channel-flippers because you’re more likely then to catch roving viewers, but the same long breaks are largely what drive viewers to flip away in the first place.
Because they have decompelled the inclusion of the feature to automatically skip commercials, we’re limited to fast-forwarding, which basically just jumps through digital frames at a faster rate. One result is that advertisers are experimenting with ways to get the same information across not over the span of 15 or 30 seconds but at keyframes/periods during. For example, the product might be featured at the 2nd, 5th, 9th and 12th second, figuring at least one or two of those will be seen during fast forward.
Tough to nail down since there’s no real commonality on how DVRs (and DVDs and VCRs) fast forward, probably less so with Blu Ray and HD-DVD.
Product placement has also been seen as one answer, as is the click-through thing, one of the big reasons studios are so enamored of the force for people to go digital. Click-through is already possible, it just isn’t widely used yet. I figure when the analog signals are finally turned off we’ll seen that start 🙂
>we would rather channel-surf for 45 minutes
Interesting! Ok I understand you sometimes rewind and look at fun commercials in that taped segment, but while you’re channel surfing, are you looking at commercials “live” so to speak as you surf, on those other channels? While your show is taping so you can have the show commercial-free? Are any of them…the *same* commercials?
No, we channel surf using the guide, so we’re not even looking at what’s on. We’re looking at the program descriptions. We never change channels blindly anymore — we only go to what looks interesting.
Stuff like “Whose Line Is It Anyway?” or the latest VH1 “Top 100 Whatevers” or random old movies or Comedy Central will be the sort of thing that fills a half hour. So we’ll flip to there, and surf the guide with that in the background. Or we’ll just read a book until the show is far enough along recording that we can watch it without commercials.
We never change channels blindly anymore
How do you stop yourself from changing blindly?
Why aren’t you playing videos games? Hmm, I guess that would sort of be a busman’s holiday for you.
We all completely stopped watching TV since we got Second Life, WoW and the 12 week free subscription to the Sun. I let the cable go. It’s a waste of money. I watch any TV I need for work with hard news on the Internet, or listen to Internet radio stations. My son has one old tv wired up with just the public stations in case there’s some kind of emergency.
Why would I sit through old episodes of Roseanne when I can script and stage Roseanne on SL, etc.
I sort of miss the reruns of “Courage the Cowardly Dog,” but Courage started jumping the shark at a certain point after that episode with the tree, “I have the cure that you seek…”
How many commercials are there? I normally just mute the TV and go make a cup of tea while the commercials are on here, but it sounds like you’re being subjected to a lot more than I am…
In the US, we get 18 minutes of commercials every hour, usually in 2-3 minute segments every 7-8 minutes. Commerials are usually 30 seconds each, and sometimes shorter; 45 and 60 second commercials are rarely aired, and are usually later edited to make smaller commercials out of.
In all of these debates about how to force people to do what they don’t want to do (watch ads, pay $20 for a CD full of crap) I think we’re missing a very important point.
Some of these industries might be buggy-whip manufacturers. In other words, obsolete, and not worth trying to save.
I mean come on. If someone’s business model is mortally threatened by a fast-forward button, or by someone singing on a streetcorner, for heaven’s sake, that business model is doomed.
One word: Doomed.
Why aren’t you playing videos games?
Because that’d be active consumption. =P Too much mental engagement when you’re merely waiting.
Personally, I watch TV so rarely that most of the commercials are new to me. So, as a novelty, they’re worth watching. Then they go and rerun the same one three times in the same 30-minute block and I can recite it and it’s boring again.
In other words, obsolete, and not worth trying to save.
I wish Congress would see that and pass a law to that effect. (I admit I haven’t bothered giving it enough thought to articulate the specifics of such a law, but they’re the lawmakers… make laws and stuff. I’d be more than happy to critique what’s put forward, though.)
Michael-
Wouldn’t take a law. It just takes neglecting to pass laws to desperately try to save them, criminalize kids, and starve the public domain in the process.
From Ofcom, British communications regulator:
18 minutes in the US!? That’s obscene :/
I guess there is a good side to paying for a TV license then…
Er, the bit at the bottom of the quote is superfluous, I got it from a section regarding limiting food adverts due to their effects on children’s dietary habits 🙂
I sort of like how some shows such as 24 are starting to put forward commercial-free shows but they are “presented by” an advertiser and the show begins with 5 minute commercial. They also use embedded advertising (for example in 24, all of the stars drive a Ford … always).
I’m pretty sure that the injuction of advertisments in the middle of show will soon be a thing of a past. I’m curious to see what replaces it.
The absolute worst is the 15-second spot that gets aired twice, back to back.
Or the stupid Head-On commercial where the announcer literally says the same sentence 3 times in a row. No doubt because some pssychology expert told them that would make people remember it. Well, I remember it, but I ain’t gonna buy it!
Interesting – I blogged the exact same thing a couple of days ago at http://www.raggedclown.com/?p=50
I don’t remember the last time I watched TV when it was actually on. I must’ve caught the episode of 60 Minutes with the Whole Foods guy sometime in June? We watch NetFlix; I watch episodes of Law & Order, America’s Test Kitchen, and American Experience that my Windows Media Center has recorded for me. That’s it.
I agree with Jim when he says:
As long as corporations continue to treat consumers as fee paying chattel, bleeding them dry at the expense of a viable consumer saving rate, while floating a credit based economy at the expense of real investment, consumer choice will remain limited.
Laws will be enacted limiting freedom of consumption further, or mechanisims will be put in place to further these agendas or “business models” if we would like to remain polite.
However the clock cant be turned back, competition will ensure that consumers have choice as long as there are scrappy little upstarts there to provide it. Jim is right somethings should be left to die on the vine for the efficiancy of the economy as a whole.
Commercials and mechanisims to ensure you see them being forced on consumers are signs that the rot is begining to set in. Already people have stopped watching TV, they “Tivo it”, On demand, Etc. if you watch TV at all, or as others have stated content aquisition via the Net, via Radio, via Satellite, Cellular Service, Google, Wikipedia this cant be turned back, this choice… And these monolithic companies operating under dated principles know it, the only option is to bleed consumers more than the next guy until the corpse is dry and change is forced, or buy thier way into innovation. That however only works while you have cash to do it, credit isnt cash.
What happens when consumer choice is so great that we can “take it off the grid” completely? Real competition, based on choice, superior product. The inverse of this? Regulating forced consumption…
I think the real question is what happens when the great American credit card is maxed, theres nothing left to bleed dry, and the 900lb gorilla in the corner (8 trillion in debt) cant be fed any longer…whos that gorilla going to eat then? I dont want to be some gorilla’s happy meal…do you?
SirBruce’s quote of 18 minutes for US commercials must not count promos for the network’s upcoming shows. Running time for Smallville this past season on WB averaged barely over 40 minutes. Not including the horrid pop-up promos WB puts on the bottom of the screen during the show for about 30 seconds after each commercial break**.
For comparison, the original Star Trek series almost 40 years ago had episodes with a running time of 51 minutes.
I started tapering off on my TV viewing back in 1993, taping only one or two shows per week and otherwise leaving the TV off. A few years back I stopped watching altogether and started buying the DVD sets of TV shows I wanted to see, like Firefly and Smallville. I now have cable internet without the cable TV service. I’d rather wait a year for the DVD set to come out and pay them directly for a commercial-free show than see them at all, even fast-forwarded. Especially now that even fast-forwarding won’t stop pop-up commercials.
** I know about the pop-up commercials on WB because I was visiting my Father last year and watched some TV there.
Wheel of Fortune is the current advertising champion. 30 minute show, of which fully 20 minutes is commercial advertising. Watch it carefully, with a stopwatch some day.
The TV industry has only themselves to blame.
I can’t wait for the day I can drop the cable TV channels I don’t want while still not being forced to pay more for cable interent service.
It’s funny how arguments about these issues get off-track so easily. Or how obvious solutions to these issues are ignored.
The core issues isn’t eliminating competition, “bleeding [consumers] dry”, or any of that. The core issue here is the same as every other company: income and profit. Without this, the company can’t continue to exist.
The reality is that commercials are how the commercial TV broadcasters make money. In the U.S. we don’t pay for our TV. If you do send a check to a TV broadcaster, it’s usually to the PBS station which doesn’t run many commercials; most that they do show are for other programs on the station. In the U.K., they pay a TV license fee which supports some of the stations. So, it doesn’t have to be this way, but I think few people would really think having fundraisers on NBC prime time would be all that great or would support the government requiring yet another tax.
So, the TV broadcasters are worried about people skipping commercials because then the advertisers are going to want to pay less to have the commercials played. They could care less about bleeding TV watchers dry (although it is puzzling to figure out how watching TV you don’t pay for requires any sort of bleeding). They care about making enough income to stay in business.
People often point out that the people watching TV aren’t the customers. Again, the broadcasters aren’t making any money off of you directly. No, the real customers are the advertisers. And, in response to the title of Raph’s post, I think the TV broadcasters understand these customers just fine.
The whole issue of “buggy whip makers” or “lack of competition” are red herrings. Nearly anyone could make a TV show today. Hell, we have video podcasting, so obviously people can record images and distribute them on the internet. But, there is one main problem: it takes money to do it right. It takes money to make your show look as good as the ones on mainstream TV.
This is exactly the same issue we have with “indie” games. Practically anyone can crank out a game or run a small game service. But, this doesn’t mean that people are going to come play it. The reality is that Meridian 59, Puzzle Pirates, or A Tale in the Desert will never look as nice as EverQuest 2, Star Wars Galaxies, or World of Warcraft. Of course, the former group has free client downloads and charges modest subscription fees whereas the latter require retail purchases and higher monthly subscription fees.
The problem here is that people want it both ways. They want the products to be of the high quality they come to expect from the mainstream and they want the products to be cheap/free (or have a minimum of advertising). Despite what some companies were saying during the dot-com boom, the old rules of business where you have to make a profit still hold. You can’t have the expensive-to-produce quality stuff without paying for it one way or another.
So, there are a few options for people to take. You can take the content without paying for it (download songs/movies of P2P, skip past commercials), but this will eventually result in the glossy, pretty stuff becoming prohibitive to make; unfortunately, this also means that the companies will lash out and try to maintain the standard of living to which they have become accustomed. You can pay for things, which maintains the status quo. You can choose not to consume the products; we didn’t get cable when we moved a few months ago and I really don’t miss TV that much.
Or, and this is always the radical option, you could start supporting independents. Look for people making products that aren’t supporting the status quo. Sure, maybe that means you don’t get to watch Kiefer Sutherland get all sweaty and break the rules on 24, but if you support the independent content creators you might see more of what you really like. And, most indies aren’t rapacious capitalists looking to bleed people dry by making them watch commercials. Most of us, at least. 🙂
My thoughts.
I’m not sure that discussing ad-based TV’s obsolescence is offtopic at all. More and more customers are no longer willing to tolerate commercials to receive TV-type entertainment. They TiVo, they Netflix, they turn away from TV entirely.
Commercial TV will wither and die, to be replaced by something else — computer games, pay-to-download, non-commercial cable, and the like. The TV exec is misunderstanding consumers fatally when he says “People can understand in order to have convenience and on-demand (options), that you can’t skip commercials.”
Certainly, given a choice between ever-more intrusive commercials (FORCING you to watch commercials? Come on, how coercive can you get?) and entertainment options other than TV, they’ll pick entertainment options other than TV.
Psycho-
Differentiate between format (TV) and content (Whats embeded into the format). Raph brings up the point (if I understood correctly) that forced consumption of content (no FF through commercials) via artificial mechanisims (via regulation or manipulation) reduces consumer choice.
The current American model for TV (format) does not support regulatory fee structures for the consumer to aquire content. Therefore the economic risk is the burden of the advertisers and broadcasters. The thoery posited is that since they are assuming risk they should garner return (ROI), to do this they should be able to force consumption by limiting choice, or rather forcing you to watch thier content….
Understand that your freedom of choice (for most anything) is not reduced or taken away from you overnight, but incrementally. The reason being is that this causes “rebellion”. Consumer rebellion is not good for business….
This is measured in “consumer tolerance” or rather the threshold of what consumers will tolerate before opting out of one content provider and aquiring another(a measurable metric by the way). Given a rational choice you will choose that which annoys you the least, controling for cost and convieniance. Companies that provide services (in this case content) understand this.
This is why:
The text messaging that was previously free (and cost nothing to the provider) now costs 5 cents to send and recieve.
Net Neutrality is such a huge issue
Your long distance phone provider will suddenly be willing to charge you less when you threaten to get another provider after they raise thier rates
Your credit card company can now fundamentally charge usury rates of interest via fee structure that circumvents what was previously thought to be an obscene level of interest.
Thus this subject is part of a larger dialouge effecting the economy and consumers, I have probably once again gone overboard and extrapolated farther than is appropriate (Sorry Raph) but fundamentally forced consumption is just wrong, and as long as you can opt out and choose to take your business elsewhere things are working as intended, its the day you cant opt out that is worrysome.
At least in my idealistic opinion
Psychochild:
To be fair, the TV License Fee also supports over 100 radio stations and of course, the BBC website which benefits pretty much everyone.
So i don’t mind paying it.
Another point I just have a problem with:
Assumption of risk makes you “deserving” of profit.
This is simply ludicrous. Sometimes, risk is just plain stupid, and businesses who take them should be responsible for their own bad judgement, or expected not to make bad judgement calls.
Case in point, the aforesaid credit card companies who “have to” charge usurious rates because they extend ever-increasing amounts of credit to bad credit risks, encouraging them to overextend themselves. Then they lobby for laws that cover their bad business practices by making it difficult or impossible for people to get clear of debt through bankruptcy.
“Understanding” that your consumers are just fee-paying chattel, as Allen pointed out, has drawbacks.
I’d go farther: it’s Evil.
Didn’t know that this sort of stuff interested you Raph. ArsTechnica.com reports on all the developments in the Big-Content(tm) arena and is a pretty good source of editorial comment. Not sure if you’ve heard of the site before or visited it. Anyway, the time shifting problem in the eyes of Big-Content is just one side of the more general problem they face with losing ad revenue.
Between DVRs, video games replacing TV viewership, ad quality, and show quality (i.e. the glut of Reality TV) viewers are not using TV their way and its caused more than a few waves. Advertisers don’t want to pay for skipped ads and the networks finally caved in an gave them this concession a couple of months ago. This in my mind opened the floodgates to the end of the broadcast-ad-driven business model. Advertisers are dropping ads in video games instead of the networks. (ie Cingular’s message center in Need For Speed: Most Wanted on the 360 or the ad infested EA Fight Night 3) The bottom line is that the 18 – 34 demographic is either not watching TV at all or they are watching just TV with no commercials via DVR and that’s hurt the networks more than they want to admit to themselves or their shareholders.
I heard this http://www.npr.org/templates/story/story.php?storyId=5545148 on the way in this morning. Apparently even online advertisers are having a rough go of it these days (800 million?).
The lesson that I would want the broadcasters to learn is that people will watch commercials if they are good. During the world cup, my family would use TiVos skip-30-seconds feature all the time. In every single commercial break someone would shout STOP! Go Back ! so we could all go back and enjoy the commercial. Many of them were excellent. Advertisers – if you want me to watch your commercials, don’t make them crap.
This is how TV broadcasters currently make money. However, their audience is changing. I think it’s not so much that broadcasters don’t understand their audience but moreso that they are too locked into a certain mechanism for squeezing money from said audience and are failing to adapt to changing times. Large corporate cultures are really bad at that sort of thing (although the advantage of having gobs of pre-existing capital sometimes allows them to overcome this, eventually).
The question is really whether TV watchers in the US have reached a certain critical mass towards the expectation of digital, on-demand content. I think it likely has or will before broadcasters can do much about it. At that point it will be too easy for someone to provide an alternative to forced commercials, earning money through alternative means. Personally I don’t get TV or cable at all these days. But I do spend several hundred dollars a year on DVD’s. I could care less whether TV continues as it does just as long as I continue to have a large selection of shows from which to pick a few to watch and I don’t mind paying a fair price for that. I hope we just start paying directly for content rather than seeing a shift to sneakier ads although I doubt that will happen — shaping the minds of consumers is far too valuable to simply go away.
I’m surprised nobody has even brought up the concept of changing the nature of advertising. Most advertisements on Television come from the same few companies, attempting to burn their brand image into your brain, as if you are not capable of making a decision based upon intellect and logic…ok, it works for some 🙂
But if you look at how advertisers are doing it for Football (Soccer in America), they advertise during pre-game, halftime, and post game, and suffice with a translucent banner during segments of live action. I think this is very effective. That “Budweiser” logo is on the screen a VERY LONG time, reminding you to go get another beer, and make it a Bud. And after the game, go play football, in your shiny new Adidas shoes.
Moving to this kind of model for primetime advertising would allow them to continue to get mindshare and not allow the consumer to skip the ad, TiVO or not. Coupled with in-program product placement, I think this would be more effective than the current model because consumers will not actively avoid your advertising.
Even so, technology will eventually allow us to filter out the translucent ads realtime, and they will have to adapt yet again I am sure. But it won’t happen until it needs to happen.
I refuse to watch US network anymore and have for years; it is just too painful.
However, I’ve spent 12 months out of the last 14 in Europe and the most common ad format is to run between 5 and 8 minutes of commercials between shows. In other words, most programs run straight through without commercial interruption, including movies. The commercial TV networks over there don’t seem to be in danger of going out of business.
MUCH nicer; like watching a DvD. That’s how I became acquainted with The Shield; I watched the first season reruns on the Jimmy Network in France and loved it, bought seasons 2 and 3 on DvD. Fox made money off of me. Maybe there is a lesson to learn here for the US networks.
My soon to be sister-in-law doesn’t watch TV at all anymore due to commercials. She does, however, buy just about everything on DVD. To her, its worth $50 per season per show to watch the show uninterupted.
‘What’s the AdSense of TV?’
Weird – I had a very similar discussion with my SO a couple of weeks ago, concerning the future of TV. We both agreed that it was only a matter of time until pretty much all TV was ‘online’ – and that targeted advertising based on demographics and ‘usage’ has to be the step for TV execs, surely.
I do also wonder how much the future expected revenue stream of online television will be impacted by possible direction from the Net Neutrality debate.
I totally agree with Jessica about advertising between shows. If the ads don’t interrupt your show, you’re less likely to feel the need to time-shift it for ad-skipping purposes, and you’re thus considerably more likely to actually watch the ads before the show, while you wait for it to start. Also, you’re much more likely to feel positively towards the advertisers when they don’t dump the talking Hamburger Helper oven mitt in the middle of your weepy hospital scene.
The comments from the ABC exec remind me strongly of the DIVX philosophy: controlling the means by which content is accessed is more cost-effective than trying to control content itself.
The pro-DIVX argument was that making all DVD players require activation of DVDs through a phone service would reduce DVD piracy, ultimately resulting in lower costs to the consumer for DVD rentals and purchases.
There were only two problems with this scheme: 1) consumers resented having to pay extra money (and having their phone lines briefly commandeered) to be able to access DVD content when and how they wanted, and 2) many of them already owned DVD players that worked just fine without controlling their viewing choices. Thus DIVX never took off, and was gone in a couple of years.
So the notion of forcing consumers to pay to replace existing “free” technology (the 30-second skip button on DVRs) with less capable technology seems very familiar. It also seems equally unlikely to succeed. Didn’t the DIVX debacle teach media moguls anything?
The Reality Distortion Field around this ABC guy and his like-minded colleagues must be terribly intense….
Two extra points:
1. Microsoft is also in a position of controlling access to content. (Windows and Internet Explorer are becoming more integrated all the time.) The reason why consumers haven’t utterly rejected Microsoft’s control of their access to content is that there wasn’t an equally or more capable free alternative that existed before Windows/IE. Had there been, consumers would never have allowed Microsoft to impose the level of dominance it currently enjoys.
2. What are the lessons in this for MMOG designers? Do the effects of attempting to “control the means of access to content” apply only to particular virtual worlds, and how should consumers feel about that? What about the industry as a whole if anything like a standard interface to virtual worlds was ever developed?