Monday, May 19, 2008, 10:02 AM ET|Posted by Will Richmond
One of the more interesting tidbits to come out of last week's upfront was Fox's "Remote-Free TV" initiative. In case you missed it, Fox Entertainment President Peter Liguori announced that two of the network's new programs, "Fringe" and "Dollhouse" will carry approximately half the typical amount of advertising. As a result, the programs will run as long as 50 minutes compared to the customary 42-44.
Why is Fox doing this and why does it matter? According to TV Week's coverage, Mr. Liguori said: "The broadcast business needs a jolt. This gives viewers one less reason to change the channel." The first statement is certainly true, but the second seemed off somehow. If the programming's really compelling, it seems unlikely that viewers are going to change the channel (when did you ever change the channel in the middle of "24" for example?).
Switching channels doesn't seem to be the issue; rather, I think the more pressing concerns behind RFTV are ad-skipping from DVR usage and broadband's growing influence. But on the DVR side, if I'm a viewer watching programs like these in recorded mode, are fewer pods or shorter ads going to make me any less inclined to hit the fast-forward button to skip the ads? Doubtful. I only need to retrain myself to hit the "play" button sooner.
If that's the case, then it seems to me that "RFTV" should be interpreted as a response to viewers' preference for broadband's "limited commercial interruptions" model. But when Fox cuts these programs' on-air ad time in half, it needs to double its fees per ad to remain even. Fox is now talking to advertisers to see if it can turn that goal into a reality. Maybe it can. Maybe it can't. If it can't, then these 2 new programs' on-air monetization will be lower than traditional expectations. Could this mean that "RFTV" may actually end up representing broadband's first demonstrably adverse impact on the network TV business? Quite possibly.
In my post last week, "Does Broadband Video Help or Hurt Broadcast TV Networks?" I argued that while broadband offers short-term benefits, in the long-term it's going to force broadcast TV networks to fundamentally adjust to different economics. Broadband's limited commercial interruptions means far fewer ad slots to monetize. RFTV may be a harbinger that this approach may now be coming to on-air as well.
Though broadband delivery is still nascent, its implications are far-reaching. In this case, having moved most of their prime-time programs online, networks now need to show it brings positive results. That will be interesting to watch. Longer-term may be nearer than I thought.
What do you think of Fox's "RFTV" initiative? And how does it impact the network's business? Post a comment and let everyone know!