The reason? They want to lure back younger viewers, who are increasingly living in a cordless future full of Netflix and Hulu, according to Bloomberg.
Time Warner, in particular, is a useful case study.
On a recent earnings call, Time Warner’s CEO pledged to chop its “ad time” in half for primetime shows, starting next year, on its channel “truTV.” TruTV is a channel focused on reality programming, and marketed toward the younger viewers Time Warner is most scared of losing. This explains the drastic ad cut.
If this gambit works, Time Warner will extend the strategy to other channels like TBS, TNT and CNN, executives told Bloomberg.
“We know one of the benefits of an ecosystem like Netflix is its lack of advertising,” Howard Shimmel, a chief research officer at Time Warner, told Bloomberg. “Consumers are being trained there are places they can go to avoid ads.” Once you get used to having no ads, the ones that still exist can become more and more grating.
Broad consumer opinion does seem to have shifted away from ads, not only with the continuing popularity of ad-free streaming services, but also with the rise of “ad blockers.”
Ad blockers, programs for web browsers and smartphones that remove ads from websites, have been the subject of recent controversy after Apple decided to allow them on the iPhone. Media companies have argued that this software will destroy companies who rely on ad-based revenue, while advocates have said that it will force the industry to make ads less intrusive.
But whatever their effect, they are catching on, and seem to represent how much the public hates the current model of advertising.
Time Warner, and others, seem to have felt this shift in consumer thinking around ads, and want to rescue their business model before it’s too late. And while not filling TV to bursting with ads might seem like a pretty obvious business strategy to entice millennials, it’s actually the exact opposite of what the big TV companies had been doing before.
Since 2009, the average “ad time” per hour on cable has gone up from 14:27 to 15:38, according to Nielsen. Broadcast TV has seen a similar bump, going from 13:25 to 14:15 minutes per hour. And cable channels have actually sped up re-runs to get two minutes more of advertising per show.
This strategy seems set to change. Whether it will help cable companies in their war against Netflix is less certain. Beyond not having ads, Netflix and HBO actually seem to be simply better at making shows than the major networks.
This article was originally published on Business Insider. Copyright 2015.