Slashdot Mirror
Will TiVo Destroy Ad-Supported TV?
windowpain writes "According to a column in Television Week, the increasing popularity of digital video recorders will actually cause a decline in ad revenues in the next few years. 'The rollout of DVR-type technology ... will reach critical mass with 11 percent penetration of U.S. television households by 2005 and 15 percent by 2006...As a result, five-year earnings growth for TV station groups could fall from as much as 10 percent to as low as 4 percent.'
Why?
DVR users skip at least two-thirds of commercials and the 'collective impact represents a threat to revenue and cash flow growth that cannot be offset ... Fifteen percent DVR penetration implies that 9.1 percent of all ads would not be watched and that advertisers would be overpaying by 9.1 percent, or $6.6 billion as calculated from projected 2006 total ad revenues of $72 billion.'
And another business model goes down in flames."
To answer your second question, this differes from a VCR for two real reasons. One is that it is effortless to set and record sometimes up to 100 or more hours of programming. Even realistically speaking I probably tivo between 5-10 hours of programming a day. This could not be done with one single VCR and one tape, and even doing so with multiple tapes/VCR's it would never be anywhere near as easy. Second, while watching live tv a tivo user is able, automatically, to pause and then resume anything they are watching. This is the caching I spoke of above. I pause the show I want to watch live for seven minutse while I prepare dinner, shave, shower, etc. and then come back and resume the show 7 minuts behind. Whenever there is a commercial I fast forward. in this way unless its a sporting event or a show which I can't watch delayed because friends are over I rarely even see a commercial in live TV. To do this with a vcr would mean, recording, rewinding and watching the episode after it has completely finished and then missing out on whatever comes next to do so. With tivo you can do this back to back and never miss a "live" show.
The question is, is it subliminal or not (read illegal)? And does it even work? Personally, I've gotten very good at filtering advertising...
Forget thrust, drag, lift and weight. Airplanes fly because of money.
Very good point. In the years since I first got my beloved TiVo, I've grown to really appreciate it when shows are screened at weird times like 4am or 1pm when I'm at work. That way they don't clash with other stuff, and my housemates aren't going to stop the recording (KILL KILL KILL!). A year or so ago I went to a shitty conference in the hell-hole that is Cannes. One of the very few interesting seminars was a discussion involving someone from TiVo, another from the BBC and one from the advertising dept of Proctor & Gamble. The BBC guy was saying how PVRs were making them more likely to do things like repeat whole series in the middle of the night. The woman from P&G actually said she was a big fan of PVRs, as she thinks the 30 second commercial is a terrible format. This coming form one of the world's biggest TV advertisers. She said PVRs encourage new, more imaginative forms of advertisiong. She was essentially saying that they only have the ad format because everyone else uses it and they cant concede any ground in such a comptitive market.
After moving back to Norway, I find the US advertising model far preferable to the Norwegian one. In the US, the ads are only 30 sec. Even without Tivo, it's not that annoying. Ads in Norway is 5 min.,which reach the annoying state pretty fast.
Plus we get most of our good programming outside the country (US, France, UK, Germany).
Je ne parle pas francais.
For example, NBC has adjusted the schedule of their Thursday lineup by a minute or two so the Season Passes won't work. (For example, if you have a Season Pass for "ER" which starts at 9:58p, then TiVo will not automatically record "CSI" which runs from 9p-10p.)
And I recall that one of the networks (NBC or ABC, if I recall correctly -- but I couldn't track down the article) did a study about commercial skipping on TiVo and came to the conclusion that people fast-forwarding through the quick subliminal commercial images that flash on the screen inbetween their shows are just as effected as if the viewer watched the entire commercial at regular speed. The network's thought was that TiVo wouldn't be a problem any more than VCRs were. It's the ReplayTV automatic "skip commercial" technology that the networks had problems with.
(sidenote: in 1999, NBC invested money in TiVo)
Due to FDA regs, you can only make two kinds of TV advertising for pharmaceuticals that aren't sold over-the-counter. You can either make a vague ad that uses the tag about "see your doctor about...", that tries to imply what the drug is for; or a seriously specific ad that says what it's for, but also lists the side effects.
:-)
On one side, you have things like Levitra, which airs during football games, and shows a guy throwing a football through the hole on a tire swing...repeatedly. With his wife smiling and clearly pleased. Does anyone NOT know what this is for?
On the other, you have things like last year's ads for Propecia, which briefly stated that how it was for combating hair loss in men, but then had to follow it with lines like "women who are pregnant or who MIGHT be pregnant should avoid handling broken tablets", and had to mention the "risk of certain sexual side effects". Supposedly, the manufacturers were rather confused why their multi-million dollar ad campaign wasn't going well.