Apple’s TV Ad-Skipping Could Push Spend Into Video Advertising

AppleThe latest Apple TV rumour is that Apple executives have been holding discussions with US cable companies and TV networks with a view to enabling viewers to skip ads, while also compensating broadcasters for missed ads. The service would be a premium upgrade feature on Apple TV, reports former Wall Street Journal journalist Jessica Lessin on her personal blog.

While most Apple TV stories have to be taken with a pinch of salt, even the most biased of observers would have to admit that eliminating ads from TV would be a genuinely disruptive move by Apple. Yes, they’re great for brands and a cornerstone of the TV industry’s business model, but the reality is that most consumers would prefer to just watch their content without interruption. Allowing them to pay for the right to do so would be a smart, consumer-friendly move for any company who can get the business model right.

But that’s the hard part. Apple are by no means the first to look into providing ad-free content, and many say the economics simply don’t ad up for anyone whose revenues need to be high enough to fund fresh, original, content.

However, regardless Apple or anyone else puts this in to practice, it’s worth consider how it might work and how such a move would affect the rest of the industry if someone did find a way to pull it off.

1. Perhaps not all ads would be skipped.

There are certain TV formats that lend themselves slightly better to advertising than others. A chat show, for example, has natural breaks throughout – between guests coming on for example – while a detective drama or movie is best enjoyed without interruption. One would be greatly enhanced by removing ads, the other not so much, so perhaps there might be a business case for allowing users to skip ads on specific shows or channels if they’re willing to pay for the right to do so.

Also, it’s worth noting that paying for ad-skipping already exists online – take SpotXchange’s Skipit for example – although it only allows you to skip ads served through SpotXchange. Offering ad-skipping at the device level would be significantly more powerful and attractive to consumers.

2. Digital might see some some big fat crumbs dropping from TV’s table.

If people decide to stop viewing TV ads, it doesn’t mean brands are going to stop trying to  reach them. That ad money would have to find a new home elsewhere, but where? The chances are that some would find it’s way to rival ad-funded TV shows, but it seems equally likely that reach-hungry brand advertisers would shift spend into other channels. Even if Apple were to displace just 5 percent of the TV industry’s ad money, it could represent a huge windfall for video and other parts of digital brand advertising.

3. Ad-free content would deal a huge blow to piracy.

Pirated content is largely driven by the fact that people want to watch content free of ads and in their own time. While there’s little to suggest that the TV industry’s current set of licensing deals will completely free up content consumption, providing ad-free alternatives might just work.

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