At a time when most programmers are talking about finding ways to reduce commercial clutter, a Wall Street analyst is accusing Viacom of doing to opposite to boost short-term revenue.
Based on a spot check of some of Viacom's network, Analyst Todd Juenger of Sanford C. Bernstein, a long-time bear on the programmer says Viacom's behavior is “especially frustrating” because some see Viacom as starting to make a turnaround under new management led by CEO Bob Bakish.
“TV Networks with momentum don’t stuff an extra 10 minutes per hour of ad time,” said Juenger in a research note dated Monday.
Juenger adds that it is particularly strange for Viacom still to be ad stuffing because the company claims to be a leader in using data and analytics to make its ads more efficient and more effective. “How effective can an advertising message be, regardless of the analytics behind it, when delivered in such a cluttered, diluted environment, with obviously un-engaged viewers?” he asks.
Viacom says its data shows that its networks' ad loads overall have been flat, both year-over-year and the current quarter compared to the previous quarter.
It is unclear how much added revenue Viacom could generate by putting extra ads into the shows on its network. But Juenger argues that the impact must be material or it wouldn’t do it.
Viacom’s ad revenue have been falling for several years. The company has promised Wall Street that it would start showing positive ad revenue growth in the second half if its fiscal year.
In his report Juenger cites some specific examples of ad stuffing on Viacom networks leading to shows whose running times outgrew the normal 30 minute and 60 minute schedule grids, outside of primetime.
At MTV, episodes of Jersey Shore Family Vacation were running at 70 minutes long, instead of the normal 60 minutes, during a Saturday marathon in order to accommodate extra ads.
On VH1 he found a 65-minute episode of Black Ink Crew. A movie, with a listed run-time of two hours and seven minutes ran for 3 hours and 10 minutes--meaning 1 hours and 3 minutes of commercials.
Nick at Nite ad stuff starts at 11 p.m. with Friends episodes that ran for 38 minutes.
At a time when Netflix is drawing subscribers and eyeballs with its ad free programming, traditional TV companies including NBCU, Fox, Time Warner and even Viacom have talked about looking for ways to reduce ad clutter to improve the ad experience for both consumers and advertisers. In those examples, there are still a lot of spots on those networks.
“There is no practice in the TV business we can think of that more blatantly trades short term gain for long term pain than ad stuffing. Viacom – and pretty much only Viacom – continues to employ this offensive practice, liberally. They seem likely to continue, until somebody (advertisers, distributors, shareholders) stands up and demands they stop,” Juenger said.