Will advertising make streaming look like broadcast television?

With most streamers already accepting advertising and Netflix joining by the end of this year, what does that mean for programming? Will creativity be stifled to satisfy the demands of advertisers? Center director Jeffrey Cole digs in.

By Jeffrey Cole

The party’s over.

Imagine The Sopranos, Game of Thrones, or even the recent four-hour tribute to George Carlin appearing on broadcast television. All were on HBO. Carlin’s most famous routine is “the seven words you can never say on television.” Even The Marvelous Mrs. Maisel or Ted Lasso could not be shown on network television without so many edits for language or nudity that they would be unrecognizable to fans.

We pay up to $20 a month to watch content that is not censored and only available on pay-cable or streaming. The fact it is not interrupted by ads is important, but it is the lack of a nanny deciding what we are allowed to see and hear that has really driven the rise of pay channels.

All that is about to change.

Advertising is coming to almost every streaming service. The days of seemingly unlimited content, uninterrupted and unedited for only $10 a month are over.

Get ready for ads or be prepared to spend $20 or more (and rising) per streaming service.

Netflix recently announced that its growth has stalled and, for the first time, even lost subscribers. The stock market immediately cut 70% off Netflix’s value in response, worried its subscriber base may continue to shrink. To steady the ship, Netflix announced it will begin to accept advertising by the end of the year.

For Netflix, advertising is a way of growing revenue without raising prices.

Hulu began in 2007 as an ad-based channel without fees. It only added a non-ad subscriber plan later. All the others began as pay services. Now there are hybrid options on HBO Max, Paramount+, soon Netflix, and very likely Disney+ will follow.

A pretty good deal?

We save money by watching advertising. This is the deal we made with the television networks 70 years ago: deliver programming without any fees, and we will watch the ads. It was a pretty good deal, but we not only had to accept interruptions, we also had to watched edited (sometimes heavily edited) content. Carlin was correct (as usual): there were seven words we could not hear on television.

Sometimes, what the broadcast Standards and Practices Departments would censor was offensive to the context of the story. The 1959 broadcast of Judgment at Nuremberg (the Nazi war crimes trial) had to remove all references to “gas chambers” and instead refer to “death chambers” because the American Gas Association sponsored the program.

Some advertisers will shy away from sponsoring programs or movies on HBO Max and Netflix. Will the teams that run the channels begin to have an overt or implicit bias towards the kind of content that will attract the most advertising? Will they, perhaps unconsciously, avoid some content that is likely to offend advertisers or not attract them at all? Will this bias be in the back (or front) of their minds as they develop content?

More often edits were inane or just plain stupid. A program with a panorama of the Manhattan skyline had to airbrush out the Chrysler Building because the show’s biggest advertiser was Ford. CBS’s fear of offending viewers in 1956 with Elvis’s gyrating hips led to the mandate that he could only be shown above the waist. A decade later, CBS insisted the Rolling Stones change the lyrics of one of their hit songs from “Let’s Spend the Night Together” to “Let’s Spend Some Time Together.” In the 1960s, Barbara Eden had to completely cover her navel on “I Dream of Jeanie,” even though at the time far more could be seen on any beach in America.

“Expecting,” not “pregnant”

Sometimes what was edited was not even in the realm of offensive. In 1952 on “I Love Lucy,” Lucille Ball could not tell her husband she was pregnant. Instead, she could only say that she was “expecting.”

During the 2004 Super Bowl halftime show, Justin Timberlake “accidentally” uncovering Janet Jackson’s breast with a nipple cover was censored, but it still led to massive controversy and fines for what came to be known as a “wardrobe malfunction.” Earlier this year, Will Smith’s screams at Chis Rock at the Oscars were so completely edited that millions of viewers had no idea what they were watching.

This is why viewers flocked to pay cable beginning in the 1970s.

Broadcasters felt they had to edit anything even remotely explicit or controversial because advertisers would not place ads on those shows. Or they could be punished by outraged viewers. Terry Rakolta, a Michigan mother deeply offended in the 1990s at the raunchiness of Fox’s Married with Children, organized a boycott campaign against the show’s advertisers. Fox changed the show, even pulling one episode altogether.

Ask subscribers why they are willing to pay for content, and they will admit that they like no interruptions from ads, but it is really the lack of censorship. They can make the decision what content and levels of nudity, violence, language or subject matter they prefer.

This was the yin and yang of television since HBO premiered in 1975. Pay-TV (and then streaming) was able to air whatever it wanted, but with a monthly fee. Broadcast television was free, but with advertising and highly edited content.

All this is now changing.

Our favorite channels will become a hybrid of monthly fees and advertising unless we pay much higher subscription rates.

As Netflix, HBO Max, Paramount+, and others take on advertising, what becomes of the freedom to explore the content broadcast television will not touch? Will the language, explicitness and themes begin to resemble broadcast?

Who will avoid content?

Some advertisers will shy away from sponsoring programs or movies on HBO Max and Netflix. Will the teams that run the channels begin to have an overt or implicit bias towards the kind of content that will attract the most advertising? Will they, perhaps unconsciously, avoid some content that is likely to offend advertisers or not attract them at all? Will this bias be in the back (or front) of their minds as they develop content?

If the streamers decide some content will not attract advertisers, but decide to make it anyway without ads, will the sponsors accept that decision, or will they demand the entire channel become a “brand safe” environment in which they can be comfortable?

Will the streamers create two versions of programs and make the unedited version available for the plans without advertising? Unlikely.

In short, can streaming continue to be what it has been?

And what about people like HBO’s John Oliver, who devotes a 20-minute segment on each show to investigate a company or industry? Recently, he took on the questionable food quality and unfair labor practices of Subway Restaurants. If Subway had been an HBO advertiser, would Oliver have been able to run the segment? Can his show even exist on a platform with advertising, or will he have to live with a lengthy list of subjects and companies he cannot touch?

When we subscribe to a handful of streaming channels at $8-15 a month all with advertising and edited content, suddenly we are spending $50 a month for a package that looks a lot like basic cable. Cord-cutting became a national obsession as viewers flocked from cable to streaming. Will that migration now cease?

Have advertisers evolved to the point that they will put ads on shows that freely (even constantly) use the F-word and are full of nudity or violence (like Bridgerton or The Wire)? Will they resist a 21st century Terry Rakolta who goes after them because of the programs they sponsor on streaming?

George Carlin moved to HBO because that was where he could use the “seven words you can never say on television.”

Will HBO and the other streamers keep it that way?
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Jeffrey Cole is the founder and director of The Center for the Digital Future at USC Annenberg.

 

 

See all columns from the center.

June 8, 2022