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Viewers value ad restraint

News, 07 June 2016

NEW YORK: Stricter limits on advertising volumes can be good for business, a leading Hulu executive has suggested.

Consumers like to be in charge, noted Peter Naylor, SVP of Advertising Sales, Hulu, whether that's in regards to the time when they watch a programme or the device they watch it on.

And they can make a similar choice about advertising by choosing to avoid ads by investing in a subscription or to watch a free ad-supported service.

"The majority of people who sign up today at Hulu will choose the advertising-supported plan," he told Beet.tv during a recent conference. This typically involves three to four ads per break, while a standard subscription shows one or two and a top subscription is commercial free.

"It shows that advertising isn't universally disliked," Naylor explained. "It means when you put a value proposition in front of consumers they will make a choice that makes sense for them and this is a choice [between] time and money".

The value proposition offered by Hulu, he suggested, isn't so great as to bother its customers.

"We have a very limited commercial load," he said. "Restraint is a good business model when it comes to advertising load."

US network television averages around 14 minutes of advertising per hour, cable TV slightly more at 15 minutes; the Cordcutting.com blog has estimated that Netflix subscribers were spared 160 hours of commercials over the course of a year – a significant amount in terms of Naylor's value proposition.

For advertisers, such streaming sites may even be more effective in some regards: recent research by the IAB found that not only were more US consumers becoming regular viewers of original digital video programming, they were more likely to report increased ad recall from this medium.

Data sourced from Beet.tv, Washington Post; additional content by Warc staff