Two Elephants in the Media Room

The media business – old and new – is losing millions of dollars in ad revenues for two reasons that are completely obvious and fixable. First, they are not utilizing the growing commercial inventory of on demand and delayed viewing commercial availabilities. This will become a bigger and bigger problem as viewing inevitably shifts to user controlled playback as it already is.
When a viewer watches a commercial program from a month or a year ago, it should have commercials inserted in real time that are in-flight and in-demo for an advertiser. In other words, there is no apparent reason why delay viewed programming shouldn’t generate as much – or actually more – CPMs (cost per thousands) than live inventory. Why? Because when someone is watching on demand or from their Comcast/NBC DVR, the platform can know much, much more about them then a live viewer, starting with at least their zip code.
So when a program is recorded on a cable company owned DVR, codes for control of the commercial breaks should be inserted into the recording for use during playback, which could have more or fewer commercials than originally aired (who cares when the program ends?). If that growing delayed viewing isn’t monetized, the problem will become huge for ad supported programming.
The cable company could even use these simple codes to offer the program commercial free for a fee charged to their cable bill. Consumers are already choosing commercial free viewing of current network TV shows on Amazon (generally $2.95 an episode) the very next day. It’s not rocket surgery.
The other elephant in the advertising world is more closely related to short online programming such as YouTube. How many times do we have to sit through (often the same) commercial over and over in order to see a cat video that we ding after 5 seconds when the cat isn’t cute enough. The wearying pre-roll commercials are out of control, literally, and downgrading the consumer experience and length of viewing.
Ideally short videos should have mandatory breaks in the middle, putting the burden on the programmers who want to make money on YouTube and the others to do a good enough job of hooking the viewer in the first minute that they’ll sit through a commercial to see the rest.
But at the very least, the platforms need to track how many seconds/minutes of actual programming the viewer has seen during a session, and adjusting the number of commercials to some reasonable percentage of total viewing. If they bail out of a video after 10 seconds, it should only count a small amount toward the number of commercials they ultimately see in a session (or even across multiple sessions).
Both of these painfully obvious improvements take some programming, nothing very complicated. What is complex is the need for the industry to agree to standards and I suspect that more than anything will forestall this kind of effort. The result will be to push ad sales down and down in the on demand environment, and hat will hit us even sooner than global warming, although after this winter in Boston that may be optimistic.