It's been a fairly ongoing topic of speculation here about whether FOX's test with airing less commercials and shorter commercial breaks during Fringe (and beginning tonight, Dollhouse) could generate high enough advertising premiums to offset having about half of the normal commercials. At least so far, according to an article by our friend Brian Stelter in today's New York Times, the answer seems to be no.
But has the commercial format worked? Fox says the shorter commercial breaks keep viewers more engaged and improve brand recall for advertisers. Viewers are also less likely to change the channel or fast-forward past the ads - but not to the degree that Fox would have liked. Perhaps more important, the network does not appear to be recouping all the costs of the experiment. It is unclear whether Remote-Free TV will be back next season.
Later in the article is this:
Mr. (Jon) Nesvig (president of sales for FOX broadcasting) suggested that Fox would be in a better position to sell premium ad time in the coming upfront advertising season. The Remote-Free TV plan was presented to media buyers last May without much preparation, he said. Regardless of whether the format returns next season, Fox executives say the experiments with the number of commercials shown in its programs will continue.
Given the economy it seems almost a certainty that all networks will be in worse position than last year at this year's upfronts in general. It seems the remote-free premiums are somewhat of a tough sell -- at least when it comes to FOX breaking even on it. It looks like with Fringe the premiums are in the range of 50%.
With half the commercials the premiums need to be closer to 100% in order to pay off for FOX (there's actually a bit more than half as many commercials as normal, so it doesn't really need to cost twice as much, but the current premiums aren't covering the difference). I don't blame FOX for trying, and I actually hope it can stick it out another year to see what happens, but if the numbers cited in Stelter's article are correct, that seems unlikely.
Bill's take: Ignore any posturing in the article about how well the experiment is doing. If Fox proposes it again during its upfront ad sales in May, it worked, if they don't, it failed. Actions speak louder than words.
Well, the thing here is that right now the premiums aren’t high enough. The numbers behind the “success,” are there though. That means higher premiums (which is what we’ve seen in the last month since a lot of reports were released) and likely 60% premiums in the future.
I believe FOX will continue to pursue this angle. They’re just starting to convince advertisers to spend even more on them. FOX is also considering having these Remote-Free TV programs sponsored. I don’t think they’re done experimenting. I believe they’ll give it one more go.
I think the remote-free spots are probably worth close to twice as much as a traditional spot. Now FOX just has to convince advertisers of that. What they don’t seem to have an effect on: Live+SD ratings. I wish we got to see the C+3 numbers more often.
I watch everything through Tivo HD and am an avid FFWD’er through the ads, but on Fringe I often let them play, usually when I need a short break. Frequently, these are the only ads I see unless something catches my eye at 60x speed.
I like Fringe because it tells you exactly how many times I have to press the 30 second button on my remote going into the commercial break.
As for the C+3 numbers, last we saw, “Fringe” was the only series showing a full 100% C+3-to-Live+SD ratio. That’s meaningless in terms of there aren’t any MORE people watching commercials on C+3; but it’s meaningful in terms of “Fringe” has a decent remote-free concept going for it.
It’s unfortunate that current economic forces are not going to make “Remote Free TV” an easy sell for FOX. Kudos to FOX for having no plans to jump back into tried-and-true comfort zones; continue to experiment!