There must be a law somewhere, where some business exec comes up with terrible schemes to squeeze more and more blood from a stone:
- let's fire the engineering staff to improve the profit figures
- let's slowly fill up content channels with so much advertising, consumers can't read/watch/listen to the media they're trying to access
- let's sell subscription access with a promise of no ads, then slowly introduce ads until the subscription payers are also earning significant money per ad
- let's reduce the quality of our product so we can improve the profit percentage
- if cars only last 5 years, consumers will have to buy new ones! (planned obsolescence)
- let's see how much we can carve out of this shrinking pie
- etc.
These kind of harebrained schemes seem so obviously stupid from the outside, but they keep showing up over and over again. It's like there's a population of con-artists who've managed to get into positions of influence in lots of companies, and will pitch and sell these ideas and make them happen, then everybody is aghast when the company tanks shortly after...meanwhile the "proven idea guy" goes on to another company and shows "improved profitability by 21% and revenue by $3mil/quarter blah blah" and slithers in to another decision making position where this happens again.
It reminds me of a story I read via Joel on Software:
> In one of Gerald Weinberg's books, probably The Secrets of Consulting, there's the apocryphal story of the giant multinational hamburger chain where some bright MBA figured out that eliminating just three sesame seeds from a sesame-seed bun would be completely unnoticeable by anyone yet would save the company $126,000 per year.
> So they do it, and time passes, and another bushy-tailed MBA comes along, and does another study, and concludes that removing another five sesame seeds wouldn't hurt either, and would save even more money, and so on and so forth, every year or two, the new management trainee looking for ways to save money proposes removing a sesame seed or two, until eventually, they're shipping hamburger buns with exactly three sesame seeds artfully arranged in a triangle, and nobody buys their hamburgers any more.
It works because of the short term nature of modern corporate goals. A lot of stockholders are institutional investors looking to buy low and sell high, rather than long term stakeholders in the company. Neither they, the board and there for the CEO has any reason to see beyond a 1-2 year horizon unless the company is in really good shape.
It works because modern corporate governance is exclusively concerned with quarterly growth, and the negative effects of these strategies come next quarter when the CEO has moved on. You don't get a bonus for playing the long game; in a public company you have everything to lose and nothing to gain from compromising this quarter in exchange for next.
One of the many reasons (alongside Sarbanes-Oxley) that some large tech companies appear to have chosen not to IPO.
This indeed describes a lot of systems of our times. I think it's simply people not understanding complexity and 'nature', and only caring about growth and profit. I don't know if it's an inevitable fact, a mandatory lack of insight in their own actions that lead them to fail when 'success' stops coming. It's not that worrying when it's TV, but the food industry seems to be very very skilled at that sort of idiocy too.
They keep getting jobs if they can do it, or make the numbers look like they did. It's all a shell game, and in many companies, the numbers are all that matter to the people calling the shots.
Every one of those things gives a business a competitive advantage over its rivals. So when one does it, all the others have to follow or die.
I like to look at it as a natural cycle of things rather than a pandemic of things - though the case can be made for either.
Hopefully, as it all decays and people get sick of it, the other side is reached, and the opposite becomes true... unless the government interferes and keeps bad businesses and industries afloat, or the industry colludes to maintain the status quo.
> It's like there's a population of con-artists who've managed to get into positions of influence in lots of companies, and will pitch and sell these ideas and make them happen
Can you really call them con men when they admit this upfront by saying they have a MBA?
Also, this is what we get when companies only care about quarterly earnings reports. If a company only has a 3 month vision, it has to come up with schemes like this.
Planned obsolescence has its upsides. Products that last much longer than people use them are, in a word, wasteful for everyone. They could have been made with less or cheaper material, or faster, or with less engineering.
Computers are a great example, especially when Moore was still going strong, and advancement was obsoleting & retiring computers far more quickly than component failure.
Another (slightly less intuitive) example is automobiles particularly in regards to emissions. If old automobiles were not intentionally obsoleted by smog laws, they would have continued to "waste" air quality.
It isn't just that they are stuffing more ads in. I have noticed a huge spike in what I call "program guide fraud" - networks indicating in the program guide information they provide to cable systems that an episode of a show is new, when it is in fact a rerun. This causes any DVR programmed to record only new episodes of a show to record the rerun, which fraudulently inflates DVR views, which leads to increased ad rates and ratings.
Some shows have taken a slightly less fraudulent, though equally frustrating, approach. 60 Minutes remixes old segments into "new" shows, but the only thing new about them is the order in which the segments appear, along with a total of maybe a minute in added commentary or updates on the segments. Whenever you hear "as we first reported..." at the beginning of a segment, that's a remixed segment. Nightline has also been remixing old segments into most of their "new" shows over the summer.
TV is dying, and the networks are turning to fraud and annoyance to try to save themselves. I can't imagine that it will work.
TV is already mostly unwatchable. As people channel-surf more to avoid ads or boring TV, the TV shows try and adapt by regularly recapping what has happened before the last ad break. So they spend less time on the content and more time on ads and then recapping after the ads.
The results are poor quality shows which are even less desirable to watch.
It's hard to view it as anything other than a death spiral.
I live in France where I wonder whether there's a law against abusive ad sequences, because they're much less intrusive:
Movies/programs start at 9pm. The ad breaks are at 9.45pm and 10.30pm. It means most movies (1.30) have only 1 ad break, series such as X-Files and 24 hours are displayed with uninterrupted episodes. Football games match this format.
At high school, those who went to Spain or UK discovered the poor state of TV in the rest of the world. We're lucky.
and its the worst when you buy a season of a show that does the recaps. "WE'll be right back", "Before the break..." so you get about 10 minutes of real content per show.
Cable television was once touted as an ad free medium. Then they started creeping in until nobody questioned why they were paying so much to subscribe to ads.
This tactic is desperation. Short-term profits for a long-term loss. People will migrate to a more tolerable alternative.
Alternatively, they're just squeezing as much juice as they can from the last fruit. They know the end is nigh for network TV so they might as well burn it all the way down.
I think that Steve Jobs nailed it. People are willing to pay a lot for the experience. Right now bittorrent gives the best TV viewing experience at all. You click, you download, you watch. No logins, no DRM, no bullshit.
Until TV can beat the quality of that experience - they are doomed.
I'd argue usenet + sonarr/sickbeard (+sabnzbd/nzbget) + plex is even better but I agree overall. I pay for TV, Netflix, Amazon Prime, etc but I rarely watch content on those platforms. Plex is just so many times better and I'm not dependant on my crappy ISP.
Would it be safe to deduce that the decision to counter-intuitively add more of what people dislike is due to executive remuneration being tied to share performance i.e. they don't give a shit if the whole things tanks as long as they vest and get out while they're seemingly profitable?
I say this under the assumption, perhaps naively, that the people in charge are aware that the decision, long-term, is not a very good one and they're playing strategically for their own ends (rather than simply being pants-on-head stupid).
Is it really a bad idea? Will people actually get off Facebook and watch more TV if the ads were shorter? I suspect ads aren't the reason TV viewing is declining and aren't going to accelerate it much.
When I was very young, and broadcast television was still in its infancy, a 60 minute network show contained about 50-52 minutes of content.
Today, you can feel _very_ lucky to see as much as 44 minutes of content per show.
Personally, I don't care if they stuff 54 minutes of commercials into each 60 minute show. I'm not going to watch the show as it's broadcast. I'll watch it on netflix, stream it, or download it. In any event, as far as I'm concerned, the commercials never happened :-)
That's the same logic as "ratings are down, let's create more channels, cuz people like variety". They ended up diluting their captive audience even more resulting in even worse ratings. Time to turn off the TV, and that includes internet TV. You really won't miss it.
I think the relationship between falling ratings and increased ads may be different than the title communicates.
In fact, it has to be for the specific numbers cited, since they are simultaneous rather than the action occurring before the response, but even though the reported numbers are simultaneous, its likely one occurred first and there is some kind of cause-and-effect relationship, but even assuming that the decline trend leads the ad increase rather than the two being lockstep or the order being reversed, it may not be that the ads are strictly to "combat" the falling rating so much as being a response to the perceived market characteristics of the remaining audience -- if networks believe that the remaining audience is less sensitive to the quantity of advertising, increasing advertising makes sense (just as if a product has a smaller but less price-sensitive market because of a new competitor stealing the most price sensitive part of the market, increasing prices and focussing on other differentiating features may be a more successful strategy to maximize profits in the new market reality than price competition -- this is a fairly exact analogy, since ads are essentially a price consumers pay for TV content.
As someone who lives in the US in a competitive senate race (and has a nearby state that are politically important, competetive and share tv markets).
If more states had competitive elections in the US, including splitting electoral college votes, they could solve their stations revenue shortfall and get a cut of that sweet sweet PAC money.
Plus I'd like everyone in the country to feel the pain of non-stop election advertising. Maybe then campaign finance reform might show up.
No surprise TV ratings are falling. The graphical user interface for my cable has to be over a decade old and zero updates have ever been done to it. DVR is an alright option, but I always pass right into the show, and on some networks it disables! fast-forward.
As ESPN continues down the road of being unwatchable, I honestly think the only thing carrying cable television in America is football. This year the NFL will broadcast one game over the internet. If, or rather when, that becomes the norm, cable subscriptions are going to drop at a faster rate than they are now. I enjoy being able to put something on really fast, but cable television reminds of the music industry as CD's died.
If they were paying any attention at all, they would see what happened to radio when they jacked up the ADS. More ADS per hour did improve revenue, but that improved revenue came at a loss of audience.
There is a curve function, and it's complex. No ADS will deliver a nice audience, assuming the program is compelling enough, but no revenue. A few ADS will do just about the same thing, but deliver revenue.
From there, as the AD rates ramp up, audience will drop off and at some pivot point there the value of the AD, due to insufficient audience impressions, drops off impacting both revenue and audience.
If you ask me, TV is already well into the pivot point.
I've got one four letter word that really helps counter this trend:
TiVo
But they get very little love. People would rather watch 10 hours a month of commercials than pay $10/month to bypass them.
And there's also laziness. I've seen so many people with cable company DVRs, but they don't FF thru commercials. Huh? Not only are the commercials mind-numbing when viewed for the 50th time, but there's also the matter of 20 minutes lost per hour of viewing.
This is like stuffing more ad units on a page. It might help your revenue in the short term, but it turns off viewers, and it turns off advertisers; so next quarter you're in the same spot, but with less room to put in ads.
If I were running a tv network, I would be doing whatever it takes to get ad rates up now, since next year is an election, and there's some rule about charging all political ads the same price, fixed based on earlier rates.
I saw an interesting stat recently: the average hour of broadcast TV has traditionally had between 12 and 18 minutes of advertising, whereas on the web the most people seem to put up with is about 6 minutes per hour. That means that even in a best case where ads transition over to web along with all tv viewership (and people don't favor ad free, subscription services), 2/3rds of that advertising medium is gone.
In practice, the experience of six minutes of ads when watching television on the web is watching the same two advertisements six times each, so I would not be surprised if people had much less ability to tolerate them for very long.
What I do hope is that things like Prime and HBO Go succeed. TV is already going down the shitter, and I don't know any millennial peer that actually still watches it (it's so backwards, why would we want to tell us what we can watch and at what time?).
What I do hope is that Netflix doesn't become a complete monopoly, else they'll stagnate.
[+] [-] bane|10 years ago|reply
- let's fire the engineering staff to improve the profit figures
- let's slowly fill up content channels with so much advertising, consumers can't read/watch/listen to the media they're trying to access
- let's sell subscription access with a promise of no ads, then slowly introduce ads until the subscription payers are also earning significant money per ad
- let's reduce the quality of our product so we can improve the profit percentage
- if cars only last 5 years, consumers will have to buy new ones! (planned obsolescence)
- let's see how much we can carve out of this shrinking pie
- etc.
These kind of harebrained schemes seem so obviously stupid from the outside, but they keep showing up over and over again. It's like there's a population of con-artists who've managed to get into positions of influence in lots of companies, and will pitch and sell these ideas and make them happen, then everybody is aghast when the company tanks shortly after...meanwhile the "proven idea guy" goes on to another company and shows "improved profitability by 21% and revenue by $3mil/quarter blah blah" and slithers in to another decision making position where this happens again.
[+] [-] mryan|10 years ago|reply
> In one of Gerald Weinberg's books, probably The Secrets of Consulting, there's the apocryphal story of the giant multinational hamburger chain where some bright MBA figured out that eliminating just three sesame seeds from a sesame-seed bun would be completely unnoticeable by anyone yet would save the company $126,000 per year.
> So they do it, and time passes, and another bushy-tailed MBA comes along, and does another study, and concludes that removing another five sesame seeds wouldn't hurt either, and would save even more money, and so on and so forth, every year or two, the new management trainee looking for ways to save money proposes removing a sesame seed or two, until eventually, they're shipping hamburger buns with exactly three sesame seeds artfully arranged in a triangle, and nobody buys their hamburgers any more.
http://www.joelonsoftware.com/items/2007/09/11.html
Short-term goals with little or no consequences are the problem.
[+] [-] hliyan|10 years ago|reply
[+] [-] superuser2|10 years ago|reply
One of the many reasons (alongside Sarbanes-Oxley) that some large tech companies appear to have chosen not to IPO.
[+] [-] agumonkey|10 years ago|reply
[+] [-] seanp2k2|10 years ago|reply
[+] [-] powertower|10 years ago|reply
I like to look at it as a natural cycle of things rather than a pandemic of things - though the case can be made for either.
Hopefully, as it all decays and people get sick of it, the other side is reached, and the opposite becomes true... unless the government interferes and keeps bad businesses and industries afloat, or the industry colludes to maintain the status quo.
[+] [-] noonespecial|10 years ago|reply
[+] [-] pdkl95|10 years ago|reply
http://ogun.stanford.edu/~bnayfeh/plan.html
NSFW language of the form "_ happens", which is part of the ha-ha-only-serious joke.
/* ahh, the irony of using a NSFW-censor to describe this link */
[+] [-] Lawtonfogle|10 years ago|reply
Can you really call them con men when they admit this upfront by saying they have a MBA?
[+] [-] JustSomeNobody|10 years ago|reply
Also, this is what we get when companies only care about quarterly earnings reports. If a company only has a 3 month vision, it has to come up with schemes like this.
[+] [-] sliverstorm|10 years ago|reply
Computers are a great example, especially when Moore was still going strong, and advancement was obsoleting & retiring computers far more quickly than component failure.
Another (slightly less intuitive) example is automobiles particularly in regards to emissions. If old automobiles were not intentionally obsoleted by smog laws, they would have continued to "waste" air quality.
[+] [-] downandout|10 years ago|reply
Some shows have taken a slightly less fraudulent, though equally frustrating, approach. 60 Minutes remixes old segments into "new" shows, but the only thing new about them is the order in which the segments appear, along with a total of maybe a minute in added commentary or updates on the segments. Whenever you hear "as we first reported..." at the beginning of a segment, that's a remixed segment. Nightline has also been remixing old segments into most of their "new" shows over the summer.
TV is dying, and the networks are turning to fraud and annoyance to try to save themselves. I can't imagine that it will work.
[+] [-] a3n|10 years ago|reply
[+] [-] brc|10 years ago|reply
The results are poor quality shows which are even less desirable to watch.
It's hard to view it as anything other than a death spiral.
[+] [-] tajen|10 years ago|reply
Movies/programs start at 9pm. The ad breaks are at 9.45pm and 10.30pm. It means most movies (1.30) have only 1 ad break, series such as X-Files and 24 hours are displayed with uninterrupted episodes. Football games match this format.
At high school, those who went to Spain or UK discovered the poor state of TV in the rest of the world. We're lucky.
[+] [-] joshstrange|10 years ago|reply
This Mitchell and Webb sketch shows this off perfectly https://www.youtube.com/watch?v=7MFtl2XXnUc
When they do this they ruin the experience watching it later on DVR/Netflix/DVD/etc.
[+] [-] maerF0x0|10 years ago|reply
[+] [-] nvader|10 years ago|reply
[+] [-] optimiz3|10 years ago|reply
Seeing as time is extremely valuable, why not provide an option to skip ads?
F2P games figured this out long ago, you annoy users into paying to make the pain go away.
[+] [-] L_Rahman|10 years ago|reply
The subscription price to run no ads at all is therefore likely higher than the ad supported one.
[+] [-] kevin_thibedeau|10 years ago|reply
[+] [-] stormcrowsx|10 years ago|reply
[+] [-] alyx|10 years ago|reply
[+] [-] unknown|10 years ago|reply
[deleted]
[+] [-] mc32|10 years ago|reply
Alternatively, they're just squeezing as much juice as they can from the last fruit. They know the end is nigh for network TV so they might as well burn it all the way down.
[+] [-] venomsnake|10 years ago|reply
Until TV can beat the quality of that experience - they are doomed.
[+] [-] joshstrange|10 years ago|reply
[+] [-] icanhackit|10 years ago|reply
I say this under the assumption, perhaps naively, that the people in charge are aware that the decision, long-term, is not a very good one and they're playing strategically for their own ends (rather than simply being pants-on-head stupid).
[+] [-] Asbostos|10 years ago|reply
[+] [-] tired_man|10 years ago|reply
Today, you can feel _very_ lucky to see as much as 44 minutes of content per show.
Personally, I don't care if they stuff 54 minutes of commercials into each 60 minute show. I'm not going to watch the show as it's broadcast. I'll watch it on netflix, stream it, or download it. In any event, as far as I'm concerned, the commercials never happened :-)
[+] [-] oldpond|10 years ago|reply
[+] [-] mullingitover|10 years ago|reply
[+] [-] dragonwriter|10 years ago|reply
In fact, it has to be for the specific numbers cited, since they are simultaneous rather than the action occurring before the response, but even though the reported numbers are simultaneous, its likely one occurred first and there is some kind of cause-and-effect relationship, but even assuming that the decline trend leads the ad increase rather than the two being lockstep or the order being reversed, it may not be that the ads are strictly to "combat" the falling rating so much as being a response to the perceived market characteristics of the remaining audience -- if networks believe that the remaining audience is less sensitive to the quantity of advertising, increasing advertising makes sense (just as if a product has a smaller but less price-sensitive market because of a new competitor stealing the most price sensitive part of the market, increasing prices and focussing on other differentiating features may be a more successful strategy to maximize profits in the new market reality than price competition -- this is a fairly exact analogy, since ads are essentially a price consumers pay for TV content.
[+] [-] acomjean|10 years ago|reply
If more states had competitive elections in the US, including splitting electoral college votes, they could solve their stations revenue shortfall and get a cut of that sweet sweet PAC money.
Plus I'd like everyone in the country to feel the pain of non-stop election advertising. Maybe then campaign finance reform might show up.
[+] [-] rickdale|10 years ago|reply
As ESPN continues down the road of being unwatchable, I honestly think the only thing carrying cable television in America is football. This year the NFL will broadcast one game over the internet. If, or rather when, that becomes the norm, cable subscriptions are going to drop at a faster rate than they are now. I enjoy being able to put something on really fast, but cable television reminds of the music industry as CD's died.
[+] [-] ddingus|10 years ago|reply
If they were paying any attention at all, they would see what happened to radio when they jacked up the ADS. More ADS per hour did improve revenue, but that improved revenue came at a loss of audience.
There is a curve function, and it's complex. No ADS will deliver a nice audience, assuming the program is compelling enough, but no revenue. A few ADS will do just about the same thing, but deliver revenue.
From there, as the AD rates ramp up, audience will drop off and at some pivot point there the value of the AD, due to insufficient audience impressions, drops off impacting both revenue and audience.
If you ask me, TV is already well into the pivot point.
[+] [-] jfoster|10 years ago|reply
[+] [-] mirimir|10 years ago|reply
[+] [-] PhantomGremlin|10 years ago|reply
And there's also laziness. I've seen so many people with cable company DVRs, but they don't FF thru commercials. Huh? Not only are the commercials mind-numbing when viewed for the 50th time, but there's also the matter of 20 minutes lost per hour of viewing.
[+] [-] danieltillett|10 years ago|reply
[+] [-] toast0|10 years ago|reply
If I were running a tv network, I would be doing whatever it takes to get ad rates up now, since next year is an election, and there's some rule about charging all political ads the same price, fixed based on earlier rates.
[+] [-] nugget|10 years ago|reply
[+] [-] wldcordeiro|10 years ago|reply
[+] [-] saurik|10 years ago|reply
[+] [-] antihero|10 years ago|reply
What I do hope is that Netflix doesn't become a complete monopoly, else they'll stagnate.