The sky is not yet falling
I'm guessing that at least two of those five people are either lying through their time-shifted teeth or are Madison Avenue plants trying to protect their valuable television advertising paradigm.
I zap through ads with my TiVo at every opportunity. I find it hard to believe that I'm in the minority here. I don't mind hitting the fast-forward button if, in the case of a 60-minute show, it's going to save 20 minutes of my life. So what if I missed an ad about the new and improved Aero InflatAbed? I'll live.
Of course, ad-zapping is not exactly "new" news; it's been discussed and debated in trade circles for years. But when the issue reaches the New York Times, as it did in May, suddenly the nation starts paying attention to it, wondering if it's a big, scary, paradigm-altering harbinger of things to come.
It's been suggested that if viewers continue to skip ads with their DVRs, the television model breaks down, and viewers will end up paying the piper. Chicken Little has seen the DVR and its capabilities, so the advertising sky must be falling, right?
I doubt it.
If there's any near-term change in viewing habits brought on by the DVR, I think it will be extremely subtle. Many viewers– even the ones who don't own a DVR–don't watch the commercials either. They kill commercials through other tried-and-true methods: channel surfing, snack-making, restroom breaks, etc. They're not all glued to the tube, wondering if McDonald's really loves to see them smile.
I also realize that some people like to watch the commercials. But if it's not during the Super Bowl, I have yet to meet these people.
And what about that old-fashioned time-shifter, the VCR? It's been around for decades, but it hasn't forced the TV advertising industry to its knees. I've been recording World Cup soccer games on my VCR in the middle of the night. When I watch a recorded game, I zip through the half-time commercials just as efficiently as I do with my TiVo. Time-shifting and ad-zapping/zipping aren't new things; they're just easier to do with a DVR. Still, I agree that the DVR, once it reaches critical mass (with the help of integrated set-top and network-based flavors), could spell trouble for the television programming industry as we know it. But I'm not holding my breath for that day, because the number of units out there now doesn't even put a dent into the aggregate number of TV viewing households. TiVo, for example, added a ho-hum 42,000 new subscribers in the first quarter of this year, giving it a total audience of about 422,000 viewing households.
Still, the U.S. PVR market penetration could exceed 36 million units by 2005, buoyed by cable-delivered PVR, if a recent Trace Strategies forecast proves true. That simply means that the hucksters will have to conjure up something much more compelling than today's mindless commercials aimed at the lowest common denominator. Maybe targeted advertising will do what the companies behind it claim it will do. Targeted ads certainly beat another option: eliminating a DVR's ad-skipping capabilities. Cable customers, if they're anything like me, won't like that one bit, and forcing it upon them will only cause them to search for other options. Time Warner Cable apparently is not going to that extreme with the Explorer 8000 box, so kudos to them.
Alienating customers is not what cable is about. Creating value for them is. Here's hoping that other MSOs will look up and make the right choice as well. The sky isn't falling, and there are ways to make sure it doesn't anytime soon.