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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."
There are other ways to advertise on TV besides commerical breaks, advertisers will just have to adapt.
I find that skipping the programs to get to the commercials to be more interesting than the other way around.
I have been pwned because my
When it's conventionally taped, don't you skip the commercials as well?
Now, I don't like advert breaks and I don't like the rampant commercialism they imply, but seriously: isn't this going to make a lot of TV unprofitable? So what happens now? Will less TV be made? Will good shows magically suceed and only bad shows not get made (fat chance)? Or will the overall proportion of "World's Blankiest Blank" shows increase (seems likely)?
Perhaps DVD box sets are the answer.. but then again, if the only money was in the DVD release, why do TV at all? And anyway, Futurama sells by the truckload and that still got cancelled. I suspect the real answer is "new and insidious advertising methods". Hurrah for FCC-approved "cannot skip" bits, coming soon to a digital TV adbreak near you! And hurrah too for product placement! You must buy Pepsi, because Joey Tribbiani does!
Not that I can see a way to put this genie back in the bottle, admittedly. Ah well, I guess we'll just have to wait and see what whacky adventures come next.
You win again, gravity!
The consumer is currently being screwed for television so cry me a river. Cable television was supposed to be ad free, that's why the consumer would pay. The additional cost of HBO and similar services illustrates that the dream of commercial free television is attainable. Television providers should stop shafting us long enough for us to pay for content we want without commercials, I'm sure that would offset PVR based losses.
vampirical
It really makes me sick watching some of the older shows in re-runs due to the re-editting in order to squeeze in more commercials. Twilight Zone and Warner Bros cartoons come immediately to mind. And forget trying to watch movies on ad-supported stations, damn "Compressed for Time" and "Editted for Content" can bite me.
Jonah Hex
Horror & SciFi Erotic Nudes
Oh God, I hope so.
So what ? Television can sustain itself without the revenue from advertising ? Then too bad for the broadcasters, but they don't have a protected right to a profitable state of business. I, for one, am looking forward to the death of advertisement.
Maybe we deserve this world ?
Maybe all the super high salaries pseudo-actors in poorly written popular pabulum like "Friends" will have to adjust to reality and will only make as much as people in other professions. Or, worse yet, they might actually have to work for a living.
The execs and everyone else are just scared because they have gotten used to being powerful and able to manipulate the rest of the world and they'll have to adjust to making what amounts to fair pay for the work they actually do.
On the other hand, I like the model PBS uses. I like Nova, the News Hour, and a number of other shows on PBS, so I pledge regularly. The result is well written and well produced TV with quality I can count on every day of the year. Maybe other stations or cable channels will have to count on viewers paying directly in some way.
I know most shows on the major networks would not be worth paying for, but I have no trouble paying for shows as good as Babylon 5, Farscape, or Monty Python.
If everyone timeshifts, then concepts like Prime Time become useless; people watch the program they want, not the one shown at 8pm on a Tuesday evening.
But there are major advantages to advertisers too. There is much better market segmentation; you *know* exactly how many, and what type of person watched your advert.
It's not all bad...
--- My dad's political betting
I have a DirecTivo and am part of the 'bad people' who will help destroy annoying commercials. As a solution, please just sell me the channels/shows I want to watch. Why am I paying for fundie nutcases like Trinity broadcasting when all I watch is 6 different channels?
This "one-size-fits-all" method of lots of channels for a large amount of money per month is failing, not just commercials.
I'd rather pay a 20-40 dollar bill that lets me "subscribe" to 20 or so shows with the ability to view *anything* for the first 10 or so minutes (or maybe x amount of episodes). In other words I can channel surf all I want and purchase the stuff I really like. The purchased items would be just like my "Season Pass" items.
Arguably, this dynamic will force networks to produce decent content instead of filler and better ways to squeeze in an extra half-commercial here and there.
TV will have to go through 'napsterization,' the genie is simply out of the bottle. A smart cable or satellite company can lead the way and make lots of money, especially targeting the "Cable is too expensive" crowd who just want Comedy Central and 2 or 3 other channels.
The networks won't like it, but its going to be either this or DRM forced commercial watching.
I ussally just rent the first season on DVD, if it's good, me and my girlfriend rent the next, and so on.
That's exactly what I do, except I "borrow" them from a friends I suddenly met over the Internet.
WARNING: Eurocentric reply
I'm not surprised that PVRs are so popular in the US, with the amount of ads there are on US channels. Maybe it is not such a problem when you get used to it, but to Europeans visiting the US, the intrusiveness of the ads is overwhelming.
We're used to privately held channels which show a lot fewer ads, and still produce good programming. Take a look at Britain's ITV or Sky and the Dutch, German and Scandinavian channels to see fairly high-quality programming with at most 2 commercial breaks in a 30 minute programme, versus the four or more seen on some US channels.
Leaving aside the state/taxpayer-funded channels such as the BBC (which has no ads), the European model shows that reduced advertising still brings in enough revenue for good programming, while being a lot less annoying for the viewer.
I have a great old recording of Abbott and Costello's "Who's on First?" routine. The funny thing is, they're asking about "the players on this here Colgate team." I believe it was performed for the Colgate Comedy Hour.
The amount of commercial breaks we have now is a recent development. It was a change to go to this model - another change won't kill TV. We'll have end up with the Dr.Pepper Late Late Show, where the host and all guests are always drinking a clearly labeled bottle of Dr.Pepper (or maybe some other Pepsi product).
In-show product shots, product references and product promos were - and can again become - the norm. Ever watch The Price is Right? Those fabulous product descriptions by the smooth voiced announcer who always used the full slogan of the product.
A different advertising model won't kill TV. Bad shows and far better alternate forms of entertainment (we've all seen the growth in video game revenues - especially the online games, which often taken up people's "prime time" evening slot).
No Clue.
That's because the HIV ad likely wasn't portrayed in a positive manner. You'd be considering, though, if it was introduced in this fashion:
Viciously hot babe in a bikini runs/bounces onto an all-white screen in slow motion
Hot babe: Hi, my name's Bambi. I've got HIV. Do you know how I got it?
Bambi pauses
Bambi: I had mad hot animal sex with an ordinary, greasy geek, just like you, and he gave it to me. *giggle*
Bambi bounces off the screen
fade to black
white lettering appears on the screen:
HIV: Find A Hot Model and Let Her Give It To You
~/ssh slashdot.org ssh: connect to host slashdot.org port 22: too many beers
Most advertising is not trying to get you to run out and buy a product today. Late-night TV carries "Call Now!" ads, but this type of advertising is not suitable for product placement. (After all, you're not likely to run out in the middle of the movie to buy a Land Rover!)
Instead, the purpose of most advertising is to create or increase brand equity. The idea is to affect your thinking months or years from now, when you (or someone like you) are actually in the market for a new SUV. If your final choice is between a Land Rover and a Glurnmobile, you will presumably have a sense of familiarity and relative comfort attached to the Land Rover. It's not that you agreed with the points the ad was making, or that you felt particularly attached to the Land Rover at the time you saw the ad - it's that if you keep hearing about Land Rover over and over, through the years you will eventually accept that Land Rover is a longstanding and reputable brand of SUV. But nobody ever heard of Glurnmobile before today, so you will probably want to do a more careful analysis of the Glurnmobile product before you buy it. Which in turn means you're more likely to buy a Land Rover.
Of course, in the automotive market, there are no Glurnmobiles. It's inconceivable that someone could jump through all the investor and regulatory hoops to bring out a new type of car, and not make sure people knew about it. Nevertheless, brand equity still depends on the amount of advertising and the length of time it has been going on. What do you think of Kia vs. Land Rover? What are your reasons for thinking what you think?
Note that human beings are wired to defend their conceptual systems against (whatever they perceive as) assault. If you believe X and someone comes along preaching not-X then you attack them, or at least defend yourself. If you believe X and Y and someone comes along preaching that X implies not-Y, the effect is the same. So: Many Slashdotters no doubt believe that (a) Land Rovers are of higher quality than Kias, and (b) that their own thinking is not affected by advertising. I am saying that the major reason to believe that a Land Rover is better is in fact the advertising, particularly the length of time they have been advertising. This challenges (b) unless you can prove that Land Rovers are objectively better. Therefore it is to be expected that many people will jump in and insist that Land Rovers have variable (blurble) with intermittently assisted (gnashing of teeth).
Instead, consider this: Insisting that you are unaffected by advertising is the same as claiming you have never been had by a troll. This is false: You are a social mammal with fairly predictable responses. This gives the trolls and advertisers their edge. No matter how l33t you may be, there's always a smarter troll (or a better advertiser) who has your number.
-Graham
Come on, whenever I want to hack an alien race's navigation, command, & control systems I use the same Mac that I used to hack a Gibson from a pay phone.
-PainKilleR-[CE]
Then your experience varies GREATLY from mine. Brand names are a premium. Do you know who created the original "oreo" style cookie? It wasn't "Oreo" brand. It was Hydrox. They are the same damn thing. Oreo had better marketing.
The VAST majority of commodities almost by definition, have zero distinguishment in quality due to brand. You know what "Windex" is? It's fucking vinegar. But sure, consumers will buy the anti-bacteria this, and orange-fairy-spirits that, because consumers are stupid and like to feel comfortable that they are buying a socially acceptable product (there is even a product on the market that kills "germs in the air"! GERMS IN THE AIR OH MY FUCKING GOD). Do your Nikes make you a better athlete? Probably not. Is your Abercrombie and Fitch wardrobe any more functional than "generic" clothes you could buy at a store like Target or KMart? The trend is actually reverse - now you pay extra for PREWORN clothing! What a deal! Can you really notice any difference whatsoever between butter and milk brands? Are you sure what you think a product tastes like is really what it "should" taste like, or just what you've grown up to accept as correct? (e.g. How did they know that the cereal tastes correct in the Matrix?).
Feel free to scale your purchases based on quality. That is something to encourage - regardless of brand name. In my experience the case is the opposite - for the vast majority of products the brand name provides NOTHING more than better marketing and more social acceptance among consumer peers. Sure there are some premium brands that are better and get my money, but they are few and far between, and usually not worth the premium even IF they are better (value is the point).
Unfortunately less and less of America knows how to make a meal from commodity ingredients or make/use commodity cleaning agents (vinegar, laundry bar soap, borax, washing soda, etc.) so they will gladly buy a product marked up %500 if it has a pretty label and includes the fashion ingredient of the day ("orange oil" seems to be popular these days). As a corollary, more and more "generic" products are getting nominal "brand names" just to make the consumer feel more comfortable with them - KMart, Target, and many stores now "brand" their generic clothes with some random name even though they are more or less generic...but they know if there is a "brand" name on it people will be more inclined to buy it (oooh, it's not KMart clothes, it's Route 66 - I feel special now).
It's 10 PM. Do you know if you're un-American?