I was interviewed in an NPR story about Fox’s “Remote Free TV” experiment last week, and thought we wouldn’t know whether Fox would continue the experiment until their upfront meetings in May. We understood that the metrics for consumer behavior had been good (less ad skipping, better recall, better engagement), but that Fox had not been able to charge the premium necessary to make up for the reduction in ad time during each show. MediaPost is reporting today that Fox may already have decided to abandon the effort.
According to a production executive close to the network, Fox will probably be ending the practice. “Financially, it wasn’t viable,” says the executive. “It was a noble experiment; viewers enjoyed it.” A Fox spokeswoman had no comment.
Under the “remote free TV” banner, which Fox announced during last year’s upfront event in New York City, “Fringe” and “Dollhouse” have witnessed a 50% cut in national TV advertising inventory–from 10 minutes per hour to five minutes. The effort was undertaken to keep viewers on Fox rather than switching to other channels.[…]
Last fall, Fox released results showing that advertisers that have participated in Fox’s efforts for “Fringe” did see higher recall for their ads. Before each commercial break, Fox alerted viewers that upcoming commercial breaks had been shortened. Typically, Fox has been running just two 30-second commercials per commercial break.
But despite positive results from advertisers that participated in the effort, Fox got bogged down in dealing with a smaller pool of TV marketers that will pay a premium to be in a prime-time show with fewer commercials. Plus, Fox incurred some additional costs in producing extra content for the two-hour drama–about five minutes or so.
The cost per thousand viewers (CPMs) are some 25% to 30% higher for two shows compared with shows of similar appeal, according to one media executive. Initially, Fox was asking for a 50% premium.
Some of the advertisers on “Fringe” included Sony Pictures, Warner Brothers, Universal Pictures, American Express, Apple Computer, Verizon Wireless and Wal-Mart. Reports suggested that Fox was inking deals at $300,000 and more for a 30-second commercial in “Fringe.”