NBCUniversal is cutting the number of commercials it will run across its broadcast and cable networks next season in the hope that advertisers will pay more for them.
The move announced Wednesday is an apparent response to the changing habits of viewers who are spending more time streaming video content online from Netflix, Amazon and other services that can be watched commercial-free. Also, a growing number of viewers record network programs to watch on their own schedule, but many don't watch the commercials during playback.
NBCUniversal is hoping it can win over some of those lost viewers by reducing the number of ads across its channels by 20%. Total ad time in original prime-time programming will be cut by 10%.
"The industry knows that television is already the most effective advertising medium there is, but we need to make the experience better for viewers," Linda Yaccarino, chair for advertising and client partnerships, said in a statement.
The company, which along with NBC owns such top-rated cable networks as USA, Bravo, E! and Syfy, is banking on the notion that fewer ads will raise ratings. Cutting the supply of commercials is also seen as a way to increase demand and boost pricing.
NBCUniversal is also planning to offer advertisers what it calls "prime pods" of ad time that will run at the beginning and the end of a program. The pods will last for one minute instead of the 2 1/2 minutes for a typical network commercial break.
The moves come two months away from the annual "upfront" sales market in which advertisers purchase broadcast and cable commercial time in advance of the 2018-19 TV season.
Spending in the market was up nearly 6% to $19.7 billion last year, as some advertisers saw TV as a more secure place to put their commercials amid concerns over inappropriate content showing up on digital video ad platforms such as YouTube.
But the continued decline in traditional TV usage among the 18-to-49 age group highly sought by advertisers is likely to take its toll on ad revenues at some point.
In recent years, other media companies have tried reducing their commercial loads in their channels with no demonstrable results.
In 2017, Viacom cut the number of spots it runs on MTV and other channels. Turner Broadcasting has been running fewer spots on some of its channels as well. But neither company can point to a lift in ratings or revenue.