More Fun With Numbers: “Remote Free” Viewing for Fox’s “Fringe”

Categories: New TV Technology

Written By

September 7th, 2008

The results amount to common sense, although Fox spent a lot of money on the biometric research to support claims that ought to be intuitive to anyone with half a brain: if you show less commercials, people will be more receptive to the ones you do show.

Fox's heavily-hyped plan for "remote free" viewing for Fringe, and then later, Dollhouse results in about half the commercials. Fox hooked up all kind of sensors to its TV lab rats so they can measure how fast someone's heart palpitates, how dilated their pupils get and how much attention the brain is paying to advertising.

Unsurprisingly Fox found that when you air less commercials, the results of those tests all improved from the point of view of receptiveness to television commercials. And equally unsurprisingly, Fox says that advertisers are willing to pay a much higher premium for the ads. All other things being equal, Fox doesn't need advertisers to pay a much higher premium they need the advertisers to pay a 100% premium. "Much higher" in television PR spin is a number much lower than 100%, but if you're running half the ads, you need to charge twice the price to "break even' all other things being equal.

But all other things are not equal. We regularly report the number of average viewers who watch a show. This number is very different, and much smaller than the number of people who saw any part of the show. Total viewing time in minutes is measured and then divided by the duration of the show to come up with the average viewers based on a show's duration. If 20 million people watch 15 minutes worth of an hour show, we'll see an average of viewer number of 5 million people.

While DVRs are heavily touted (and loved by the likes of me and Bill Gorman), according to Nielsen they are only in 24.4% of the TV homes reaching 26.5% of the people. I don't need to spend a lot of money on research to know what happens with the other 73.5% of the people (AKA most people) when a long commercial break comes on. Some change the channel, some get up for a pit-stop and snack collection, and others send e-mails and/or text messages from their spiffy mobile devices. There's a reason that the commercial that comes on before the show comes back on the air costs more money: more people see it. That's true for both people with and without DVRs.

The big question with "Remote Free" viewing is whether it will truly be "remote free viewing". I'll grant that half the commercials is a definite improvement, but it still results in way too many commercials. Figure ~18 minutes of commercial breaks for a typical hour show. Reducing it to 9 minutes is definitely an improvement, but is still probably too many commercials to achieve the effect of rendering the remote useless. Especially if this is accomplished via three 3 minute pods of commercials.

There is no fool-proof mechanism for rendering the remote useless. We may be a stupid bunch of idiots, but one thing we're very good at universally is operating a remote control to change the channel. And if you really want people not to change the channel you have to make the breaks much shorter. Like 30 seconds to one minute. Having five one minute breaks would take its toll on remote control usage. But that gets you down to less than a third of the commercials currently offered.

Reducing the commercial breaks by half will certainly have some effect on channel surfing, the question becomes: will it be enough? But it's not unthinkable, especially as DVR penetration approaches 50% that there will be one-third the commercials at three times the price someday. That day, should it come to pass is still a long way into the future.

For now, I applaud Fox for experimenting. But the reality is for Fox to reasonably call the experiment a success it needs two things to happen: it needs to be able to charge a 50% premium for the spots and it needs average viewership to wind up at least 25% higher than it would've been with twice as many commercials. Obviously, if average viewership goes up more than 25% the premium would not have to be as high.

A simple example (that may still make your head pop off anyway, sorry):

Let's say Terminator: The Sarah Connor Chronicles gets 8 million viewers with 18 minutes of commercials. I understand not all 18 minutes belong to the network, but for simplicity of the example we'll say it does and we'll call ad revenue 18x across 8 million viewers.

If Fringe gets 9 minutes of commercials at 50% premium, that's 13.5x, but if it has 25% higher viewership than TSCC, that gets it to about 16.88x. Still less than 18x, so in this example it didn't recover all of the revenue of the missed advertising, but Fox would probably declare it a success and hope to make it up in DVD revenue!

Because Fringe is coming out of the gate with less advertising we will not be able to compare it to itself. Comparing it to other shows is probably folly, though we'll do it anyway. The real results will be whether it comes back next year (not Fringe, but "remote free" viewing). While I doubt that the premiums for the remaining ads are even as high as 50%, and I also am not sure cutting commercials by half will produce 25% more viewership, it will certainly be interesting to follow and speculate over...

There's another factor too. Fox has to come up with 7-9 minutes of extra content per episode and I don't think the experiment will succeed if the "Previously on Fringe" section grows to five minutes per episode in length. Still, I applaud Fox for the experiment anyway.

My guess is that it won't be back next year. TV is an industry where even good change comes hard. I remember how everyone cried like a little girl who dropped her ice cream cone when Fox started keeping the score and the clock on the screen all the time during NFL games in the early 1990s. Now we can't imagine life without it. I suspect this will be so with fewer commercials...someday. But change in the way advertising is bought and sold will not come easily or rapidly.

 
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