Ad Age, the leading advertising industry magazine, brings word of a recent marketing study that finds that PVRs aren't as bad for television advertising as some (cough*Kellner*cough) would have you believe (Impact of PVRs Dramatically Less Than Predicted).
The study, by Memphis-based marketing agency NextResearch, finds that 73% of PVR users find television more fun, 13% watch much more television, 43% watch somewhat more, and 30% watch more premium channels (Special Release: April PVR Monitortm). See the Satisfaction with PVR Chart.
There are many more interesting statistics freely available for this proprietary report...
UPDATE 0206 ET 08 May 2002
This study is good news for television advertisers in the short term, and also good news for the long term — if advertisers and network executives adjust their business models. For example, 42% of PVR owners no longer "channel surf," but over 70% are using interactive program guides provided by the service for watching live, and 58% are using interactive program guides for recording. This means that rather than focusing on merely capturing the attention of viewers, or expecting them to watch a new show that follows an old favorite, networks are going to have to convince people to program a show to be recorded. This is going to become very important to networks, especially since 44% of PVR owners no longer pay attention to channels.
Here is one obvious idea: work with PVR developers so that people can press a single button during a promo to schedule a show for recording. I own a TiVo, and often, when I'm watching a show, a promo will appear for a show I might be interested in. Unfortunately, I am also too lazy to pause and then go through the trouble of setting that show to be recorded. A "one-click" system would mean I waste more time with the boob tube.
Of course, the big question is how do PVRs affect the viewing of advertisements? Surprisingly, Ad Age notes that the study did not find much difference between PVR and television commercial viewing:
The study also showed that viewers' likelihood of watching commercials when viewing programs with PVRs vs. live TV is nearly the same. Only 1% said they always watch the ads when using a PVR or watching live TV, while 60% said they occasionally watch them with PVRs and 62% with live TV.
Pace Kellner, this statistic would seem to indicate that we live in a morally bankrupt society, since only 1% of viewers always watch the ads, 99% of the country must be thieves. Unfortunately for Kellner, a lot of people have already trained themselves to ignore television commercials, just as most people ignore the banner ads on the Internet. Indeed, I would not hesitate to say that the vast majority of advertising simply goes unnoticed. [You didn't hesitate - Ed.] ReplayTV didn't invent the concept of people ignoring commercials, they merely made it obvious. [Note to network executives, here is an obvious idea to defeat 30-sec skip functions: vary the length of bumpers, promos and the commercials themselves.]
The next couple of statistics that Ad Age notes are the crux of the issue. Apparently, people are only willing to watch advertisements that are entertaining or for products that they are interested in:
For example, the study, which surveyed 358 people who used the services, shows 92% of respondents said they watch ads that are entertaining and 69% watch for products they are interested in. [emphasis added] See the Impact of PVR on Viewing Advertisements Chart.
Well, seems to me that advertisers have nothing to worry about. People who are interested in their products will watch the commercials, and if that doesn't work, they merely have to make the commericals entertaining (heaven forfend). Another article from Ad Age in June 2001 (Is TiVo a Threat to Ad Industry?) offers some words of advice from a TiVo executive:
[TiVo doesn't] think that the $60 billion spent on TV advertising today is going away, but we think bad advertising, irrelevant advertising that's not interesting ... is dead.
Indeed, another Ad Age article from February of this year (4As Speakers Fault TiVo Marketing Campaign) notes that this prediction seems to be taking place:
TiVo said the part of the recent Super Bowl that its users replayed the most was the 90-second multi-generational Pepsi spot with Britney Spears. The ad was rewound more than the winning field goal in the final seconds.
Another option might be to adopt new advertising models. The February Ad Age article goes on to note that TiVo is actively seeking alternatives, rather than following Kellner's advice (Top Ten New Copyright Crimes) to rely on old business models:
TiVo could offer viewers more promotional content if they request it. For example, a person shopping for a new car could be offered the chance to view a 30-minute, heavily detailed pitch.
Advertisers have plenty of options. It may require people like Kellner to actually think, or something, but marketing is not going to curl up and die, no matter how attractive that thought is. If anyone needs to worry, it is the video rental business, since the study found that 56% of PVR owners rent fewer videos since acquiring a PVR. See the Impact of PVR on TV Viewing Habits Chart.
The study's conclusion, which is obvious to anyone who has actually used a PVR or any length of time, is that, "Utilizing a PVR empowers viewers who can now choose programming they like, when they like to watch it, and they won't be going back to the same old way they used to watch." In other words, the viewer's relationship to television is changing, and both advertisers and networks had better adapt.
In unrelated news, Silicon Dust appears to be developing both ethernet and 802.11b network connectivity cards for TiVo players. Slashdot broke the story back in March (802.11b on your Tivo). Could this mean that despite TiVo's efforts to prevent hacking (TiVo to Fair Use: Drop Dead!) you will soon be able to backup your TiVo-recorded television shows on hard drive?
Note: The Shifted Librarian has a few additional thoughts on alternative advertising models.
