How Cord Cutting Will Influence the Future of TV Commercials

People fed up with the amount of commercials on cable TV may find that the situation isn't much better with streaming services.

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May 4 2016, 6:13pm

Image: fdecomite/Flickr

Most people would agree that commercials suck. It's why the internet almost blew up last June when people thought Netflix was going to start interrupting streams with ads (relax, it isn't). It's the reason Hulu launched an ad-free subscription option, and CBS All Access is considering doing the same.

Why do people hate commercials so much? When it comes to streaming services, people complain about ads that are louder than the shows themselves. Ads also tend to repeat and can "really interrupt the flow of the story," Elissa Shevinsky, a subscriber to Hulu's ad-free plan, told Motherboard. "It's worth the money to watch a show uninterrupted."

Another Hulu subscriber, Marina del Rey-based private investigator Rob Holmes, said he wants "total control" of his viewing experience. "I don't want free shit," he said. "I'm willing to pay for quality and control."


For more stories about the best devices and services for cord cutters be sure to read the Motherboard Guide to Cord Cutting.


But not everyone is as willing to shell out their hard-earned cash. That's why services like Pluto TV, a free streaming platform with over 100 channels, are doing so well. Pluto TV doesn't charge its users a dime. Instead, it shows ads.

Ilya Pozin, the service's founder, pointed out that it shows about nine minutes of commercials per hour, compared to about 18 minutes you'd find with traditional TV.

But that doesn't mean people won't still complain. One Reddit thread from a few months ago noted that Pluto TV was now running "full blown commercials like cable companies do," and the people in the thread wondered if this spelled the end for a service they once enjoyed.

Meanwhile, skinny bundle internet TV services like Sling TV and PlayStation Vue are increasing in popularity.

"You pay $20 - $30 a month for a smaller, more targeted bundle of channels that are traditionally only available with cable," Eric Anthony from StreamingObserver.com said. "It's a good deal, but you still have traditional commercial breaks."

In order to keep the prices low while providing popular channels like ESPN, Sling TV has to include commercials as part of its strategy.

"We believe in a model that has two revenue streams, both through advertising and a monthly fee for content," Ben Weinberger, Sling TV's chief product officer, told Motherboard. "It's a good model for our programmers, and we think with dynamic ad insertion, Sling TV can find a sweet spot between delivering relevant ads to the consumer and the number of ads shown."

Dynamic ad insertion (DAI) is a way for content providers to show targeted ads to the viewer. "DAI allows the ability to personalize ads on 1:1 to basis," a Sling TV spokesperson told Motherboard. "We are able to personalize the ads today based on a viewer's content choice, device and geo-targeting. Soon, we will utilize third party data matched to our subscriber data for more advanced personalized ads." Sling TV's privacy policy discusses in detail what sort of data is collected from users.

Weinberger explained that DAI "creates a better experience for the viewer and also benefits advertisers and programmers through targeted advertising." He also mentioned that they're in the process of rolling out DAI for "multiple channels including the ESPN channels," which could spell the end of the elevator music that plays on ESPN during commercial breaks.

So what's a cord cutter to do? You can find a service that lets you pay a fee to do away with commercials, deal with the commercials and watch other services for free, or do both with something like Sling TV in exchange for content you can't legally find elsewhere.

Whatever the choice, cord cutting continues to offer exactly that—choice.

Chris Brantner is co-founder of CutCableToday.com, a site dedicated to helping people find cable TV alternatives. Follow him on Twitter @CutCableToday.