Monday, February 23, 2009

Why Fox TV’s New Remote-Free TV Doesn’t Work

As you may have read, Fox TV is going to a fewer-commercial strategy that they are calling “Remote-Free TV.” Clever name. But as the results seem to indicate, a misnomer at best.

Just because Fox has reduced the amount of commercials in some of their programming, it doesn’t seem that viewers are eliminating the use of the remote.

When Fox sold the idea to advertisers last May, Peter Liguori, the Fox entertainment chairman, said that fewer commercials would present fewer reasons for viewer to “grab the remote and change the channel.”

In return, Fox would charge a premium of 40 to 50 percent for the advertising sold on Remote-Free TV.

According to Jon Nesvig, president of sales for Fox Broadcasting, the format has worked “reasonably well.”

As we know that TV executives are prone to blow the smallest success out of proportion, “reasonably well,“ should not be assumed to be high-praise.

“It’s better” than other shows, Mr. Nesvig said, “but it hasn’t been as great as we were hoping.”

Really?

You were hoping that because you took one commercial out of the pod, running two rather than three or four, that consumers would stop and say, “Hey, wasting just one minute of my time, that’s much better than wasting one and a half minutes of my time. You bet I’ll sit around and watch.”

Sorry.

The thing that we have to keep remembering is that viewers aren’t skipping commercials per se. What viewers are skipping are interruptions to the program that they are watching.

Any length interruption is still an interruption.

The ultimate answer is to make it so that commercials don’t interrupt the viewing of the programming.

I know, I know. The argument to this is that then, people won’t watch the advertising, either.

Well, they’re obviously not watching advertising now. While most will tell you that 60 to 70 percent of the commercials are skipped on TiVo, their CEO, Tom Rogers, says that the number is actually closer to 90%.

Now compare skipping to searching. Search is the only successful new advertising format that has been introduced in the last 50 years. What are people searching for?

Product information.

Can that product information be contained in a commercial? I don’t see why not.

But how many might opt-in to watch? Depends on how well the media agency was able to target the spot.

Just for argument’s sake, let’s say 10% opt-in. Now before you say, I can’t afford to advertise to only 10% of the viewing audience, Tom Rogers says that you already are.

The difference is that you’re paying for 100% of that audience now.

In a purely opt-in model, you only pay for those that actually opt-in.

Obviously, advertisers can keep spending money for the comfort level that wasted dollars seem to provide.

But in these recessionary times, that’s a pretty expensive way to feel all warm and fuzzy.

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