If there is one trend driving the ad business crazy right now, and has been for a while, it the active flight by content consumers from all things advertising. The major TV networks put the excellent HuluPlus together as a way to offer recent and past TV with “limited commercial interruption”, which means roughly 30 seconds of commercial per break rather than the more traditional 2-3 minute slots. As someone who is pretty much physically allergic to all forms of commercials, I regard that as a step in the right direction. Although the move to DVR has been slower than I would have thought the amount of people actually watching long form TV complete with commercials has now dropped to below half (44% in a recent survey). Add to that the growth of Video on Demand and all forms of online content the days of the traditional commercial seem to be headed into new territories. Radio has been in a death spiral fueled by the excellent Pandora and the horrible Sirius for a while. Newspapers, which used to weigh measurable fractions of entire pounds, now merely weigh a few grams. The online media world is rapidly moving to a more personalized kind of exposure with advertisers bidding on very detailed profiles of consumers targeting them closely with messages, which they think will resonate.
In another step in this direction, the recent discussions between Google and the major music labels seem to be headed in a similar direction. Google’s goal is to play catch-up to the trendy Spotify music solution, and their approach is interesting. Google hasn’t traditionally had a meaningful music offering, missing out to iTunes, Pandora, and others. But, they did buy YouTube and they see that as their grubstake. Google has been slathering YouTube with pre-run commercials for a while now, to the point where it’s almost unwatchable. In addition to pestering seekers after amusing kitten videos with ad after ad to the point where the Ad-allergic like myself find it unusable.
Now there is a solution. In a supposedly private negotiation, which is such a poorly kept secret that I just hear about it from my Bulldog (who isn’t that much of a news junkie), Google is cutting a deal with the major labels to offer their music content as part of a (presumably) Google Play branded initiative which will offer a Spotify like music service which also removes the ads from your YouTube viewing experience. It’s a cunning plan… let’s annoy the consumers to the point where they will pay a small amount to get rid of the commercials. Oh, and we will throw in all the music you can eat for good measure. The controversy comes over how the music guys get paid for their content. They would like a per-track feed, Google is offering a rev share on what they get. Either way it’s another short step to an ad free environment.