[opendtv] Marketers Should Learn to Stop Worrying and Love the DVR
- From: Monty Solomon <monty@xxxxxxxxxx>
- To: undisclosed-recipient: ;
- Date: Wed, 26 Oct 2005 01:19:50 -0400
Marketers Should Learn to Stop
Worrying and Love the DVR
By JOE FLINT
October 26, 2005
Bedoop. Bedoop. Bedoop.
That's the noise a TiVo makes when it skips ads, and it is the most
dreaded sound in the television industry. As TiVos and digital video
recorders offered by cable and satellite operators proliferate,
viewers are gaining more control over how they watch television. And
many of them are using that power to say goodbye to advertisements.
Digital video technology is both a blessing and a curse for the
television industry. On the one hand, owners of DVRs are loyal
television viewers. On the other hand, they like to skip over
commercials that pay for creating the programs.
There is no denying that a major transformation in television-viewing
habits is under way. But rather than diminish the role of advertising
in the industry, the shift is likely to push both television
executives and advertisers to find new ways of marketing to consumers.
Currently, there are about 3.6 million TiVos in the marketplace.
While sales growth of the brand-name devices is starting to slow,
other DVRs (which unlike TiVo make no noise when they skip over ads)
are taking off. According to consulting firm Kagan Research, the
number of U.S. consumers with a DVR will go from 1.8 million in 2004
to 4.5 million in at the end of this year, a 150% jump. While the
combined 8.1 million still will be a small percentage of the roughly
110 million television households in the U.S., the adoption rate is
moving faster than was expected just a few years ago. Last year,
media-buying firm Magna Global projected that by 2008 there would be
23.4 million homes with a DVR. But in a new report issued a few
months ago, that number was increased to more than 25 million.
A study conducted in 2003 by TiVo and media-buying firm Starcom
Worldwide found that 77% of TiVo users who recorded a prime-time
program to watch later skipped the commercials when they got around
to watching it. More recently, David Poltrack, the research guru at
Viacom Inc.'s CBS, found that 64% of DVR users skipped all
commercials and an additional 26% blew through most spots. And
another consulting firm, Frank N. Magid Associates, found that only
one-third of DVR users don't skip commercials.
The news wasn't all bad for networks and advertisers, however:
Starcom's study found that among viewers who recorded a show but
watched it live or nearly live, only 17% of them elected to avoid the
commercials. Of course, more than 60% of TiVo users tend to record
shows and watch them at least a day after their original airing.
And television and advertising executives can take heart from the
fact the number of DVR and TiVo users grows, the percentage of those
skipping all ads has declined slightly. "Now that DVRs are getting
into the mainstream of the population, these folks are not using it
the way the original rabid adapters were," says Alan Wurtzel, NBC's
president of research and media development.
...
http://online.wsj.com/public/article/SB113020001206978306-3g8FaDqM2JAWzUAhUc_g3OiSuFw_20061025.html
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