Will TiVo Destroy Ad-Supported TV? 943
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."
Re:Nope (Score:2, Informative)
Re:How do they tell? (Score:5, Informative)
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.
What, like movies? (Score:5, Informative)
The question is, is it subliminal or not (read illegal)? And does it even work? Personally, I've gotten very good at filtering advertising...
Tivo will help usher in on-demand content (Score:2, Informative)
It's probably a good thing the "Friends" are getting out while the getting is good. In a few years they may only make a several-hundred thousand dollars an episode as opposed to the million they make todays. The horror!!
Re:Is this a good thing? (Score:2, Informative)
Advertising for dummies (Score:2, Informative)
To sum up: If you tell people they cant use PVRs or VCRs to skip adverts they will be pissed off and not watch your adverts. If you make crap adverts that no-one wants to watch or you repete them 500 times, then no-one will watch. If you Keep putting them on all the damn time, people will get fed up and do what ever it takes (leaving the room to get a drink is pretty much a habit) to not watch them. However, if you make very good adverts that people enjoy watching them and you make them the right length and put them on at the right time then people might just watch.
Re:Is this a good thing? (Score:3, Informative)
Details at http://www.tv-l.co.uk/ [tv-l.co.uk].
(116? Has it gone up about ten quid recently?)
Re:Actually, TiVo has a much more important impact (Score:5, Informative)
Wrapup (Score:3, Informative)
Ad free pay TV - not! (Score:1, Informative)
Why? Advertising your own future programming is much cheaper than filling time with real content, and it doesn't look like ads. Also, it makes the programs fill the 30 / 60 minute slots in the same way real ads do.
Both types of ads are equally boring, unimaginative and long-running. One of the worst offenders is BBC World, who give a 20-second big-number-on-the-screen countdown to the next program. Time to channel surf!
My point? Oh, yeah, ad-less TV isn't. You don't get more content, but you have to pay more anyway.
Re:There are too many ads! (Score:5, Informative)
Plus we get most of our good programming outside the country (US, France, UK, Germany).
Re:British TV (Score:1, Informative)
Didn't they take the scripts to Fawlty Towers and remove a character that they didn't like? Yes, you've guessed it, there's no Basil in the US equivalent! Only in America.
Re:Nope (Score:2, Informative)
Ever listened to a radio play? (Score:3, Informative)
Many sponsor's ads during the radio play ages were performed inline with the show, by the show's performers, but still in such a way that they were clearly advertisements. Sure, not everything could be advertised this way, but it would probably bring back some of the creativity and interest in advertising that seems to have sunk into the world of the one-time superbowl ad.
Advertisers know that people all over tune in to the superbowl just for the ads, yet they don't seem to be spending that kind of effort on a large scale to make every day ads that interesting. Sure, there are exceptions (usually humorous ads), but not enough to keep me glued to the set during show breaks.
The networks already have a solution! (Score:3, Informative)
For example, NBC has adjusted the schedule of their Thursday lineup [pvrblog.com] 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)
Re:What, like movies? (Score:4, Informative)
No it didnt. [snopes.com]
The observation is not new (Score:3, Informative)
-- Robert A. Heinlein
Re:Nope (Score:2, Informative)
I believe the laws regulating drug advertising state that if you have to describe the side affects of a drug if you mention what the drug is to be used for. So nexium avoids telling you all the bad stuff it does, while at the same time implying their pill solves the answer to Life, the Universe, and Everything...without actually saying that it solves the answer to Life, the Universe, and Everything.
People can't do math. (Score:2, Informative)
I am not a marketing professional, but if 9.1 percent of adds are skipped, that would seem to imply a 10% overpayment. If 100% of adds are skipped, does that mean that marketers are paying only twice what they are worth? (100% overpayment) For that matter, where did the 9.1% figure come from anyway? Two thirds of 15%?
I will leave the math as an exercise for the reader.
Cry me a river . . . (Score:2, Informative)
Americans are bombarded with advertising, and it's a filthy business. Everywhere you turn there's an advertisement launched at you. They're even so sleezy that they mark up prices so that they can say they are 30% off and make a sale.
What irks me is when I listen to a radio program or watch a television program and the actual content is only 3/4 of what is played. Some simpsons episodes are as short as 18 minutes! Other shows run for 22, but jeez - 18 minutes?! That's almost 50% commercials! Doesn't that seem ridiculous?
TiVO has simply made us the consumer more aware of the amount of advertising flung at us on a daily basis. The advertisers are going to have to find some other business model, because I believe that when TiVO takes off there will be no going back.
That's not what Proctor & Gamble found. (Score:3, Informative)
Personally, I sometimes forget that I'm watching through Tivo and that I can skip the ads. Other times I do skip the ads I'd have otherwise ignored, but I stop for ads that I enjoy. Still other times, I watch ads at high speed that I recognize. Frankly, I think I harbor less ill will toward companies whose ads would otherwise annoy me, and I still feel pretty good about companies whose ads (and more importantly, products) I like. So what's the harm?
Re:Nope (Score:4, Informative)
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.
MythTV makes Tivo look like a toy. (Score:2, Informative)
I no longer know what movies are out, what new shows are coming out, anything that is usually communicated via TV commericals.
Tivo/replaytv might have an edge in reliability, ease of configuration, etc. but MythTV creams them in feature set, hands down. No monthly fees either.
Viral Marketing (Score:3, Informative)
One thing that advertisors are trying in order to cope with the unimaginable (to them) loss of advertising revenues because of the "infiltration" of a new "alien" DVR technology is something called "Viral Marketing". [wilsonweb.com]
See that pretty girl at the bar? She's smiling at you and asking you to light her cigarette. The conversation quickly turns to...cigarettes and how great the brand is that she's smoking. By now your ego is feeling pretty good and you feel the adrenaline rush of "being hit on". She's actually a sales woman simulating a social envirnoment in order to sell you the cigarette she's smoking!
Walking to your job in New York City and you bump into a handsome young couple who are "from the midwest" (so they claim). They ask you take a picture of them with their "hot new picture taking cell phone". You use it, think it's cool and a brief discussion ensues about how cool this new gadgetry is.
You go to Starbucks and there's a handsome (see a pattern here?) young fellow playing a video game on his laptop. He's really into it, making a bit of a show of what he's doing. He's using an amazing looking "cyber glove" to play the game. "Would you like to try it out?" says he. Next thing you know, you're playing the game with the glove and asking where you can buy the same thing. "I got mine at Best Buy" he says, but "you can get them just about anywhere electronics are sold".
Of course, I personally think that you'd have to be a bit of a twit to actually fall for this sort of thing. The reports I've seen on TV make the whole affair seem pretty darn artificial. But I also have no doubt that this sort of thing will work on a certain precentage amount of the population. It strikes me as more than a bit disgusting and shows just how low advertisers are willing to sink.
Re:What, like movies? (Score:2, Informative)
Dells. I can't watch a TV show anymore without somebody flashing a Dell laptop or an Axim. Not that I mind, since I happen to own both of those products already, but it's getting really obvious.
Re:What, like movies? (Score:2, Informative)
Here's the MSDS [fsafood.com]
TiVo just makes it more -obvious- (Score:2, Informative)
In fact, I may be paying -more- attention to the commercials I'm interested in as at least once every couple of days I see something that catches my eye and I rewind and watch the commercial.
Not to mention the studies that show that people who FF through commercials (which means you have to closely watch the screen to see when the show has come back on) show the same level of retention of commercial contents after 1 hour. I'm too lazy to look up the URL of the study but I found it from a long past
In other words, TiVo hasn't damaged commercials, it has just given the large corporations a way to get big discounts from the networks and/or more insidiously get their products inserted into the program content like a close-up on a can of a specific soda brand, etc.
We'll always be stuck with advertisements.