Hallmark Channel competes against streaming video by dropping ads

Dive Brief:

The Hallmark Channel will dramatically cut the volume of ads in its original primetime shows beginning next year, per Ad Age. New episodes of Hallmark’s hour-long original content such as "Chesapeake Shores" and "Good Witch" will only include five to seven minutes of commercials instead of the current 15 minutes of ads, Bill Abbott, president and CEO at Hallmark Channel parent Crown Media told Ad Age.
The reduction in ads is designed to help the network better compete with ad-free viewing experiences like Netflix and Amazon Prime Video.
Abbott told Ad Age the move should increase ratings and create a “pristine” environment for brand messages. He also expects the cable network will be able to charge more for the reduced ad inventory.

Dive Insight:

The Hallmark Channel’s ad strategy follows a similar move by Time Warner’s Turner Broadcasting, which reduced ads on select TNT shows by 50% as well as some original programming on TruTV starting in January. Turner’s reasoning at the time was to create a better viewing experience, according to Kevin Reilly, president of Time Warner Inc.’s TNT and TBS cable networks.

Cable networks are under pressure as consumers increasingly cancel subscriptions or, for younger viewers, never even sign up. At the same time, streaming services like Netflix and Amazon Prime Video, which have a growing stable of popular original programming, continue to grow. The networks are betting that the migration away from cable is about more than just having to pony up for a subscription and could also reflect dissatisfaction with the number of ads viewers are forced to sit through, with average ad loads growing through last year.

Reducing ad loads is still a new enough approach that its impact is unclear. However, if it does prove effective, others might follow.

While Turner is continuing the strategy of reducing ads with certain TNT and TruTV shows, the Ad Age report pointed out there is no data proving that marketers benefit by paying more to appear on shows with lower ad inventory and less competition for viewer attention.

For the Hallmark Channel, Abbott said if the reduced ad load proves to be successful the network would likely reduce ad inventory on its signature holiday programming as well.