|
They’re known as
digital video recorders or as personal video recorders, and they’re
beginning to change the way people watch television just as radically as the
VCR changed viewing habits when it came on the scene in the 1970s.
But DVRs also
threaten to change advertising, too.
They possess that
threat because they give people the option to skip or avoid commercials with
relative ease. One DVR maker is being sued over this, while the other is
designing special programming that works like targeted advertising, but
offers viewers entertainment along with the sales pitch.
TiVo and ReplayTV
are the main DVR makes. Both are available in the United States; TiVo is
also available in Britain. Direct-broadcast satellite services offer limited
DVRs built into their set-top decoder/channel-selector boxes.
Both work
essentially the same way, downloading programming information through a
phone line and a toll-free number in the middle of the night from Tribune
Media Services’ Zap2It, the division that compiles programming data across
the continent that it provides for print TV listings and onscreen program
guides.
That access costs
DVR users a one-time fee of US$250. Find the show you want to record through
an onscreen menu, and the TiVo will record it on to a hard drive — its
latest model will hold 60 hours. It will record your favourite show every
time it’s broadcast. It can also record shows a user is likely to enjoy
based on viewing patterns.
Users say the
device fundamentally changes the way they watch television. They don’t
channel surf, they can pause live TV, skip back and see something again, or
skip ahead at extremely high speed. It’s this last feature that makes
advertisers fearful, especially after a study meant to measure the
effectiveness of automotive advertising by CNW Marketing Research of Oregon
this summer stumbled upon the statistic that DVR users skip commercials more
than 72 percent of the time — more than people watching regular TV or those
using VCRs. They do watch beer and drug advertising, however.
TiVo’s rival,
SonicBlue’s ReplayTV 4500, can record up to 320 hours of programming,
support a broadband Internet connection for retrieving data and sending
programs from one unit to another. The 4500 also allows viewers to delete
commercials as it plays back. Every sitcom is 21 minutes long; every
one-hour drama unfolds in 42 minutes, and viewers see no commercials. In
ReplayTV tests, the 4500 removed 96 percent of the advertising from typical
network programming. That makes advertisers even more nervous than the TiVo
skipping feature.
Solutions proposed
for that problem include making commercials in odd lengths — 40 seconds, for
example — that would confound the machine’s assumption that TV ads are
half-a-minute long.
Broadcasting
executives say product placement is not an option — it couldn’t work on the
scale needed to supplant traditional advertising.
Litigation is a
more immediate remedy. Broadcasters are suing ReplayTV’s manufacturer,
SonicBlue. The plaintiffs are alleging copyright infringement because of the
program-sharing feature, saying it makes ReplayTV the video equivalent of
the Napster file-sharing service, sued out of existence by the Recording
Industry Association of America.
Turner Broadcasting
boss Jamie Kellner, inveighing against the DVR, said people who watch TV
without watching the commercials are stealing.
The Electronic
Frontier Foundation is helping with a counter suit on behalf of ReplayTV
users who maintain they can trade shows and skip commercials with impunity.
They want a judge to rule that they have those rights officially.
ReplayTV and
SonicBlue officials could not be reached for comment, despite repeated
attempts.
Even with the rave
reviews in the United States,
fewer than a million DVR units have been sold. But one company is betting it
will become more popular. At the beginning of August, TV ratings company
Nielsen Media Research announced that it can now measure what TiVo boxes are
recording in its metered homes.
“Our software for
program measurement is resident but dormant in the TiVo box,” explained
Nielsen vice-president Anne Elliot. “It’s not activated until the user gives
us permission, but it can be turned on remotely if they say yes.”
And while that
might make advertisers and networks feel relieved, it actually creates new
problems. “How do you count those ratings?” Elliot said. “We’re measuring
when the device is recording. The assumption is that the recording is being
watched or will be. So how does that change the ratings?
If few people are
watching a show but a lot of people are recording it, what does that mean
for scheduling? And if I record a show with a movie ad in it, don’t watch
the show until two weeks later then go see the movie, how do you count that
as an advertiser?”
So far, there’s
only one Canadian digital video recorder. Bell ExpressVu’s satellite service
offers viewers the option of getting a 5100-series set-top box, which
includes the decoder and channel-changer/receiver for its programming, with
a built-in digital recorder. That option costs about $474 on top of the $200
or so the more basic box-and-dish hardware costs. Compare that with TiVo’s
US$399 suggested retail price or US$400 for the ReplayTV 4500, and another
US$ 250 for the listing subscription in each case.
ExpressVu’s
machine, which it calls a personal video recorder, was introduced a year
ago, and the satellite company’s Ron MacInnes said it’s been a boon to him
as a viewer and a key marketing tool to get people to choose satellite over
cable. “People who use these things become sales people for you — they’re
that excited. I have one of these things and it’s completely changed the way
I watch television.” He said no Canadian advertisers or media buyers have
expressed concern about the device.
Canadian cable
users are not going to have the DVR option any time soon. Tribune Media’s
Zap2It covers Canadian cable systems, but local cable companies would have
to co-operate for DVRs to work.
Neither Rogers nor
Shaw does. And they don’t plan to.
“We looked into it
when they were first introduced,” Rogers’ Taanta Gupta said. “But we’d have
to build the unit into our set-top box, and the cost to the consumer would
have been between $600 and $800. We thought consumers would find that too
expensive.”
She said Rogers is
going with video-on-demand instead. Viewers pay $3.95 for 24 hours of access
to a movie stored on a central server. Their remote control works on the
movie as it would on a videotape or DVD, allowing them to pause, fastforward
and rewind it.
The two U.S.
manufacturers have gone in different directions over the advertising issue.
A TiVo employee,
who spoke on condition of anonymity, said the firm considered the ReplayTV
commercial-deletion option for its latest model, but decided against it.
TiVo has been trying to find ways to make the device a vehicle for
advertising, coining the term “advertainment” to describe the hybrid. “One
of our most successful efforts was what we did for Austin Powers In
Goldmember,” said TiVo executive producer Jim Monroe.
“We offered
subscribers the chance to see the entire theatrical trailer and clips from
the movie. Mike Myers really likes his TiVo, so we also had clips from an
interview with him where he talked about how he uses his and what he likes
about the machine.”
TiVo has similar
deals with Sony and Real Networks, the Internet audio and video player
company, putting together “advertainment” packages as long as 10 minutes.
“This is different
and worth more” than standard 30-second commercials, Mr. Monroe said.
“People are actively choosing to see this content. You know it’s getting to
every member of your target audience. It’s easier to measure, and you know
they’re paying attention.”
“TV as we know it
is going to die in the next five years,” said Jim Nail, senior analyst at
Forrester Research. “Instead of being on a network schedule, it’s going to
become demand-driven. Consumers will be able to watch what they want when
they want it, and this will clearly change how they relate to advertisers.
Does anyone care about 420,000 subscribers? Probably not. Should companies
begin to think about what an advertisement is? Yes.” |
