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Time Warner and Comcast Want to Make You Watch Commercials Again

Advertisers have always hated DVR and video on demand (VOD) because they give people a way to watch the stuff they like (TV shows) without any of the stuff they don’t (commercials). Networks complain they make ad spots harder to sell, since advertisers can’t be sure when people would actually watch their programs—a day later? A week later? If a movie studio wants to advertise an upcoming film, how can it be sure people will see its trailers before opening weekend?

The two sides have hit on a potential solution called dynamic ad insertion. That’s the industry term for swapping out old ads for new ones depending on when a prerecorded program is being watched.

Time Warner (TWX) announced this week that it will start offering complete seasons of some of its shows on Comcast’s (CMCSA) Xfinity TV and digital VOD platforms. That will give customers greater access to even more programming, but they’ll also have to watch more advertising, because fast-forwarding will be disabled. And the advertising will feature dynamic ad insertion, so advertisers can be assured their commercials are fresh.

This is obviously good for advertisers and television networks. Nielsen (NLSN) usually tracks TV shows’ ratings for only three days after they originally air, which until now meant that networks weren’t able to monetize the fact that, say, a bunch of people were watching Mad Men two weeks behind schedule.

But Nielsen is starting to also track VOD, and a high on-demand performance—last year, CBS’s (CBS) Big Bang Theory was the most watched show on Comcast’s VOD platforms—combined with an ability to keep advertising­ spots relevant, means that shows will have more leverage when trying to sell ads.

As for what this means for cable consumers—well, you might want to get back in the habit of timing your bathroom trips with the commercial breaks.

Suddath is a staff writer for Bloomberg Businessweek.

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