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Thursday, 27 January 2011 20:22

PVRs didn't kill the advertising star - yet


The widespread use of VCRs made a lot of us comfortable with the idea of fast-forwarding through the ads. And the emergence of DVRs/PVRs added pristine video quality to the mix. But ads have survived, and at least one industry watcher thinks they'll continue to flourish.

Did you think the fast-forward button was a harbinger of doom for free-to-air TV's business model?

Professional services firm Deloitte's reckons that 50% of TV owners in the US and UK will also own a DVR. Considering the widespread use of Tivo in the US, and the penetration of Sky (with its DVR-enabled set top boxes in the UK, that doesn't seem over-optimistic. And many of the low-priced flat-screen TVs on the Australian market have built-in PVR functionality if you plug in a USB storage device (which can also be pretty cheap).

In my house, little TV is watched 'live from air.' We record almost everything and time-shift it at our convenience, fast-forwarding through the ads (saving about 15 minutes in every hour in the process). Many of the people I speak to either have similar habits, or they obtain most of their viewing via 'Channel B' (in which case the ads have already been stripped for them).

Professional services firm Deloitte's is predicting that despite this, the DVR "is is unlikely to have a material impact on the value of television advertising in 2011."

Why? Two reasons. Firstly, "the majority of viewing in these households will be 'appointment to watch' television, be this sports, a talent show, a soap opera, reality TV, a game show or a news bulletin. This type of programing usually crowds out time available to watch pre-recorded content."

I'm not convinced - find out why on page 2.

Maybe. In my household some - but far from all - sport and news is watched live. But then nobody here watches talent shows, soap operas, or game shows; and only one reality program has an audience (which doesn't include me).

The other reason is that "viewers are likely to attach increasing value to 'first broadcast programing' in the next few years as the volume of social commentary, both that occurring organically as well as that encouraged by the broadcaster, steadily grows: viewers are likely to become even more locked into the schedule and therefore less able to skip advertising."

I can see two problems with that reasoning. Firstly, there's nothing to stop people 'timeslipping' (starting to watch the program after it has started, and then skipping the ads so that they've 'caught up' by the end of the show).

Secondly, it assumes that you're watching the show in the market where it is first broadcast. Here in Australia, we're used to programs airing days, weeks, months and even years (cough, ABC, cough, Spooks, cough) behind their home markets. So what's another day or so? Those who are really bothered about watching programs on a timely basis are already using Channel B or bypassing the geographical restrictions of catch-up sites such as Hulu and BBC iPlayer.

So if I were an advertiser, I'd still be worried. What about you?


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Stephen Withers

Stephen Withers is one of Australia¹s most experienced IT journalists, having begun his career in the days of 8-bit 'microcomputers'. He covers the gamut from gadgets to enterprise systems. In previous lives he has been an academic, a systems programmer, an IT support manager, and an online services manager. Stephen holds an honours degree in Management Sciences and a PhD in Industrial and Business Studies.

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