How Does Traditional TV Compete With Ad-Free Services?

• by Wayne Friedman , Staff Writer, Yesterday

TV show producers have strong points of view on the ads airing between comedy, drama and reality content. And so do advertising executives. Who do you believe?

“Consumers hate advertising,” said Bob Greenblatt, chairman of NBC Entertainment, at a New York City TV business event on Tuesday. “People are running away from advertising in droves. To me, that is the crux of the problem. How do we stop that from happening?”

And then there is this:
Jonah Goodhart, cofounder/CEO of Moat, a media analytics and measurement company, at the same event: “Consumers hate bad advertising... Branding and content to me are the same thing.”

The only time the latter might be true is for one specific TV occasion: the Super Bowl. Everything else? Maybe when I’m really bored with the story arc on a TV comedy, drama or reality show.
When HBO was the only game in town in the ‘80s, ‘90s and most of the 2000s, the ad-free channel could only command around 25 million or so TV homes, out of some 120 million U.S. TV homes. The relative high cost (around $13 to $15 a month, depending on the promotion and/or pay TV provider) and ease of access (having to buy a basic cable network package) might have had something to do with it.

Many years later, we now have Netflix at around $10 to $12 a month with some 50 million U.S. subscribers. But you don’t need to subscribe to a basic cable network plan in order to get the service.
Consumers are now looking a lot closer at ad-free, easy-to-buy (and leave) digital content platforms, such as Netflix, HBO, Hulu, YouTube TV, among others.

NBC’s Greenblatt, former president of entertainment for Showtime Networks (another ad-free cable TV service), reckons people are on the move -- away from TV advertising.

A positive note to ad executives — the industry needs to get better at incorporating ad messages into TV programming content.

We have heard these warnings from TV execs before — and will continue to hear them again. Now decide — from all data points and trends — who is winning the debate.