Lately, if you’ve felt that there are more commercials during your TV shows, you are not alone.
Netflix developed the reputation as the first major disruption in the TV industry, pushing cable companies to change the way the do business. Streaming services have gained so much popularity among viewers that more people now abandon their TV subscriptions and switch to online streaming services, notably Netflix. The amount of people doing this has become so significant that TV networks feel forced to break their promise:
To cut back on ad time.
According to Michael Nathanson, an analyst at MoffettNathanson LLC, commercial time has increased by 1% each quarter of last year. Viewers leaving cable behind means that TV companies must find another way to generate revenue. Companies can either raise prices to loyal subscribers, air more commercials, or a combination of both. The latter is the more popular option.
These solutions might work in the short-term, but in the long-term, they will not be sustainable. Why would subscribers keep their cable if it not only costs more but has even longer commercial breaks? This is all while Netflix is a subscription away. Nathanson’s firm surveyed consumers and found that “the number one reason people like Netflix is because it’s commercial-free.”
In an era where we prioritize convenience over everything, Netflix definitely has the advantage. By allowing viewers on-demand access to their favorite movies and TV shows without annoying commercial breaks, why would anyone settle for cable?
TV networks must find other ways that will allow them to generate enough revenue. Increasing commercial time is certainly not the solution.