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Fox Has Bold Ideas to Cut Back TV Ads. But They’re Not Easy to Put in Place

At Fox Broadcasting, cutting a check to star producer Ryan Murphy, the backer of popular series like “9-1-1” and “Glee,” may be an easier task than cutting back on TV commercials.

The 21st Century Fox-owned network has spent several weeks telling top media buyers that it intends to enact a massive 40% reduction in the number of TV ads it runs during its Sunday primetime schedule, the better to engage a generation of fans of “The Simpsons” and “Bob’s Burgers” who don’t have to deal with the same number of commercial interruptions when they interact with Netflix or Hulu. Now, some of those details may be in flux.

Fox still expects to offer a night with a reduced advertising schedule, according to executives and media buyers familiar with the plans, but it may be on a different night of the week.  Fox is also discussing a concept called a “Fox Block,” or a long form commercial that might run before or after a Fox show and could last up to six minutes. Media buyers, who have been talking to Fox in preliminary discussions leading up to the industry’s annual “upfront” ad sales negotiations, said executives had pitched the new ad concepts as if they were ready.

Fox isn’t the only TV network giving new consideration to cutting back advertising. NBCUniversal has vowed to reduce ad inventory by 10% in original runs of primetime shows on both its NBC broadcast network and its various cable outlets. They follow Turner’s TruTV, which in 2015 unveiled a plan to run more programming and fewer commercials.

But doing all this isn’t done with a press release and a snap of the fingers. Yanking the bulk of commercials from a rotation represents a reorganization of many long held structures that govern TV. Showrunners might have to tailor the flow of dramas and comedies to accommodate a different number of ad breaks. Transitions between programs could be affected, as could the number of promos a network runs on its air to tout other series and events.

One idea Fox has considered is sure to raise eyebrows. The network has mulled several ways to make use of local ad time, inventory normally allocated to affiliates, so as to reduce ad interruptions in primetime, according to people familiar with the matter. Local time is likely to remain in the broadcasts, one of these people says, and Fox expects to talk to stations about its plans. NBCUniversal, meanwhile, has no plans to cut local ads from its primetime schedule, a person familiar with the matter says, even as it sets about to run fewer commercials.

Local TV executives might blanch at shaking up their allotment of primetime ads, typically some of the most expensive commercial inventory they sell.  “The goal was to eliminate local time in those shows,” said one ad buying executive who was briefed on the ideas Fox was considering. Doing so, this buyer suggested, would bolster the presentation of the handful of national ads for which Fox intends to seek higher prices. Under its current plan, Fox would run 11 ad breaks between 8 p.m. and 10 p.m. with just a minute of commercials in each, according to buyers and other executives.

Fox declined to comment on its plans for local ads. Fox has made no formal request to stations that run its programming, according to two people familiar with the matter. A spokesman for Meredith Corp., which operates some Fox affiliates, declined to comment. A spokesman for Nexstar Media said the company would not comment on a “rumor.” Two other Fox station owners, Sinclair Broadcasting and Raycom Media, did not respond to queries seeking comment.

Devising new ways to monetize TV advertising in a world where more viewers have found methods to avoid seeing it perhaps even more critical for Fox than for some of its competitors. Fox Broadcasting is expected to place more emphasis in the coming season live sports broadcasts, including the start of a new five-year run of “Thursday Night Football,” for which its parent company is said to be paying more than $650 million per year to air.  The company has also been snatching up rights to lesser sports draws, like bowling, that will surface on Fox Broadcasting. 21st Century Fox has agreed to sell the bulk of its assets, including its TV-studio units, to Walt Disney Co., and has indicated a new focus on live sports and news programming.

Fox seems interested in borrowing from its past to build its future.

The new proposal bears similarity to a tactic Fox tested to some acclaim last decade. In 2002 and 2003, Fox broadcast commercial-free season premieres of its hit drama “24.” Ford Motor got to run longer-than-usual ads before and after the episodes. In  at least one year, those commercials imitated the storylines of the famous series. But the network recognized repeating the feat would be difficult. Getting a commercial-free broadcast meant convincing affiliates to give up their ad time in the hour,  and finding other kinds of inventory to offer them in exchange.

Fox is likely to seek better pricing for ads that run in its new commercial pods. The Sunday programs would seem to offer a natural roost for the experiment, as they are largely animated comedies that play well with younger viewers.

The average cost of a 30-second ad in “The Simpsons,” long a Sunday staple, came to $121,374 in 2017, according to Variety’s annual chart of primetime ad prices. A 30-second ad in “Family Guy” cost an average of  $128,329, while a 30-second spot in “Bob’s Burgers” could be had for an average of $76,412.

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