We live in a world of Divx, Xvid, streaming video, embedded flash, TiVo, DVR, SageTV and other ways of watching tv without actually watching TV. Who sees commercials anymore?
Sure, presently live TV probably does fairly well. I only have a vague understanding of ratings, but somebody tells somebody that tells a network that this show on this timeslot gets this many viewers. This many viewers means this much money an advertiser needs to pay to get however many spots during that show.
I don't watch live TV anymore. My DVR let's me watch shows 25 minutes after it starts, and I can just fast forward through the commercials. If I start at 8:45, I can pretty much get through the 8-10pm timeblock on TV without being bothered by a single commercial.
It isn't really that bad though, because I still have to fast forward through commercials, and the interesting ones or the ones who's product I care about, I'll actually stop and watch, at least, if it's the first time I've seen it. So that hefty advertising budget isn't being wasted.
A relatively new product that I was introduced to called SageTV is actually smart enough to automatically skip commercials once you record it. Downloaded divx and xvid tv shows have commercials editted out. There's thousands of people watching shows without commercials.
How do advertisers solve this problem?
Well, product placement is becoming more frequent, and this is a great solution. I see someone drink a pepsi, I want a pepsi. Next time I see it in a store, I might buy a pepsi.
Why not take it further? Why not write it into the script to talk about a new product? "Hey, what's that you're drinking there?" "Oh this, just the newest Dr. Pepper flavor. It's great, wanna try?" "No thanks. So how about that hot date you had yesterday?"
Is this a far fetched solution? Not really. Take a cue from the radio talk show masters. They mention products all the time in conversation format. It's a commercial, but it involves their lives, and listeners listen and remember the products.
Will shows be ruined by product placement? Well, depends on the show. Lost would be really weird if suddenly 22 cases of Sprite Zero Remix 2 was mysteriously dropped into the camp. Product placement won't ruin the realism of a show simulating real life. Remember the old days when products were relabeled? Now that ruins realism.
If not more product placement, what about shorter commercial blocks? Forget 30 second spots. Commercials are tiring. The first three months after superbowl, the tv is packed with replays of every single superbowl commercial. It was interesting the first second and third time it was played on superbowl. It's not interesting after that.
Five second spots, a minute worth of commercials. I think most people know what the product is. They don't need 25 seconds of a chipmunk crashing a car and high fiving another chipmunk to understand that car insurance is needed. I don't actually have a good method for how a 5 second spot would play out, but trust me, if I had a perfect solution, I'd be in the marketing business, not writing this blog; whoever discovers the key to 5 second commercials is going to be a rich person.
In the end, it boils down to the fact that shows need advertiser support in order to stay alive. If a show isn't getting ratings, it gets canceled. With less people watching commercials, advertisers are less willing to pay for the same spots. All this great technology that supports the habits we love are going to end up destroying that habit.
Especially torrents and other forms of P2P. Think about it. If your favorite show is downloaded 50 thousand times, that's most likely 50 thousand people who did not see the commercials.
I hope the user community can appreciate this. They should do their part too. Leave the commercials into your video. If people are that annoyed at fast forwarding through a couple commercials, let them be annoyed. It might inconvenience you, but from an business standpoint, it might legitimize peer to peer.
Let's put it this way. There might be a day when an advertiser looks at a timeslot and decides that the ratings aren't worth the premium price a network wants, but then does a query on popular torrent sites and finds that on average, the show on that time slot gets downloaded 50 thousand times before the next episode airs. They also know that the file leaves in commercials. Though they can't be confident that the viewers actually watch the commercials, they can at least feel like there's a chance that a percentage of that 50 thousand does.
So what does the future hold for advertising? Massive product placement? Shorter commercial spots? A more sympathetic p2p community of the business needs of a network that creates great shows?
One can only hope the solution keeps viewers in mind and not just satisfies the business end of the television world.