Drawing More Eyes With Fewer Spots

How rebranded Paramount Channel is trying to create a premium environment
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There were only nine minutes of commercials in last week’s premiere of Waco, the first piece of high-profile, big-ticket programming on Viacom’s new Paramount Network.

The low advertising load — with half the normal number of breaks, and each break a bit shorter than usual — is part of the network’s attempt to simulate the experience viewers get on premium channels. There were no commercials until about 16 minutes into the episode, a big change for Viacom, which has been criticized for stuffing too many spots into shows on its networks to make up for declining ad revenue.

Kevin Kay, president of Paramount Network, CMT and TV Land, said he hoped viewers would notice the lack of ads. Just in case, before the first ad pod, which contained a one-minute trailer for a new movie from Paramount Pictures, the network announced that, “The world premiere of Waco is presented with limited commercial interruptions by the new film Annihilation.”

“I think the viewer will feel and understand that they saw something different,” Kay said. “I think if you’re a viewer of scripted premium and you see a trailer for a big feature, it doesn’t feel like [a commercial], with all due respect to all of our other sponsors.”

Paramount Network replaced Spike TV on Jan. 18, launching with a live edition of one of Spike’s higher-rated shows, Lip Sync Battle. Spike was struggling, with viewership among adults 18-49 down 24% during 2017. Paramount’s live Lip Sync Battle had the series’s highest rating since June 23, 2016.

The Waco premiere drew a 0.6 overnight rating and 1.1 million viewers to Paramount (more with the simulcast on CMT). Paramount called the performance “very encouraging” on a competitive night and expects the show to get a boost when delayed viewing is added in. Tinkering with ad formats is one way the Paramount Network aims to entice viewers and advertisers.

Related: Ratings Up in First Week for New Paramount Network

“We realized the viewers are used to not having to watch commercials on the [subscription video-on-demand] platforms for sure; HBO and Showtime as well,” Kay said. “But we’re still pay cable, and somebody’s got to pay the bills. These shows ain’t cheap. But one of the things we’re talking about is how do we change that viewing experience and make it more like a premium experience.”

Kay said future episodes of Waco would have a similarly low ad load, as will upcoming programs Heathers, Yellowstone and American Woman.

Those ’70s Ads
Another idea Paramount has for creating a premium environment involves having advertisers create 1970s-style commercials to air in American Woman, because the show is set in Beverly Hills in the ’70s.

“You’ll feel like you’re still in the ’70s when you’re in the commercial breaks,” Kay said. “We are out there selling and we’ve got a lot of interest.”

The network is also looking to have individual advertisers sponsor entire episodes.

“I think ideas like that are what we need to continue to refine,” Kay said. “But I think we’re off to a good start because we’ve gotten a lot of good feedback on these ideas and a lot of people want to work with us.”

Advertisers like the idea of a less-cluttered commercial environment.

“Giving consumers a positive viewing experience can only help the advertising efficacy,” Havas Media chief investment officer Jason Kanefsky said.

It’s an idea that other networks have put in place. Turner has cut the ad load on truTV and in original series on TNT and TBS. Also, NBC reduced the number of spots on Saturday Night Live. But the bigger question may be whether the TV business needs another network.

“In a world where [over-the-top] is becoming more important and smart televisions are allowing consumers to pick and choose shows, as opposed to picking and choosing networks, branding and rebranding networks doesn’t necessarily create success,” Kanefsky said.

The success of Paramount Network is a key part of Viacom CEO Bob Bakish’s strategy to turn around Viacom, which has been suffering from declining ratings, lower ad revenue and falling profit. Analysts have embraced Bakish’s plan to focus investment on a handful of flagship networks, including Paramount.

While the Spike TV rebranding didn’t work out for Viacom, Kagan senior analyst Derek Baine said the Paramount name is better-known. “Hopefully, the rebrand and a bigger programming budget will result in a more successful rebranding,” Baine said.

Kagan forecasts Paramount Network will generate $375.1 million in net ad sales in 2018, up 36% from Spike’s $276.2 million in 2017. “We are projecting ratings go from a 0.3 to a 0.4, which is not hard to do with a rebranding,” Baine said.

Kay said the Paramount Network doesn’t plan to cut ad loads on shows that are already on the air. But with the network ratcheting up its star power and shifting focus from men to attracting a broader audience, advertisers are already responding.

Spike’s air was filled with shows including Cops, as well as Impact Wrestling and Bellator MMA action, that scared off some content-sensitive advertisers.

Cops was always a tough sell, wrestling was a tough sell. We’ve worked hard over the last month and a half to change that perception,” Kay said.

The network has cut back on those shows and added classic sitcoms including Friends and Two and a Half Men to its daytime lineup. “We’re seeing a lot of new sponsors interested in the Paramount Network,” said Kay. Procter & Gamble is advertising more, Sonic remains a big supporter and Delta Faucet has signed on.

Adding star power to its original programs might also help.

Kay said he recently watched the first cut of the first episode of Yellowstone.

“When Kevin Costner gets up on his horse and puts on the cowboy hat, that’s money,” he said.

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