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Issue link: https://digital.macdirectory.com/i/1134553
Research Intelligencer found that families dismantled their "store bought" bundle to develop their own personal bundle that met the family's wants and needs. That's probably why instead of the annual spend for home entertainment, it actually hit a record of $23.3B last year, up 11.5 percent. While many of the folks GfK interviewed said they had cut or severely shaved their Pay-Tv cable explained they did it to escape advertising but upon further discussion it wasn't getting rid of ads but the volume of the ads. As David Ogilvy emphasized, free is one of the most powerful words in a headline; and to enjoy free entertainment, someone had to underwrite the cost … advertisers. GfK found that people who switched to streaming services were simply sick and tired (our words) of too many ads! More than 4 in 10 respondents(44 percent) say that the lack of ads is the top reason for using paid streaming services, and three-quarters feel there are too many ads on Pay-TV. Obviously, ads haven't deterred younger viewers from rushing to Google's YouTube. Because of possibility of ads showing up on or around offensive content, most advertisers view the option with mixed feelings because one wrong appearance can (and has) caused irreparable damage to the product and company. Television network and program owners heard the door slamming and responded by taking a hard look at their TV ad bundles. They trimmed the total time of commercials shown with Fox saying they were reducing add time to two minutes an hour by next year. At the same time, advertisers have begun experimenting with shorter ads (6,10,15, 30 sec) and a broader range of variety of ads (mix rather than repeat). While Magna noted in its recent global report that ad revenues in linear TV has contracted 3.6 percent this year, OTT advertising actually expanded by 54 percent last year and is projected to increase another 39 percent this year, well ahead of social and digital video. As a result, Magna noted that a number of SVOD players – Netflix, Amazon, v and others are exploring hybrid, add- supported business models with offerings with limited ads or company/product sponsored. Vincent Letang, Magna executive vice president-global market intelligence, said that the long-term trend will continue; and initially, AVOD services will have a decided advantage because they will be able to deliver specific ads to individual viewers rather than have to sell broad demographics. Ad-supported entertainment will change significantly over the coming years; and as it becomes more personalized, it will become more accepted and appreciated. Advertising will become more seamlessly brought into the entertainment scene and will ultimately be more effective. At some point, we'll have a eureka moment just as Travis Bickle did when he said, "Now I see it clearly. My whole life is pointed in one direction. I see that now. There never has been any choice for me." Source - "Taxi Driver", Columbia Pictures