DVRs Still Not Killing TV, Just Making Ads Better

from the pause-rewind-play-pause dept

Mon, Aug 21st 2006 9:12am — Carlo Longino

The rise of the digital video recorder was supposed to sound a death knell for the traditional broadcast TV business, and this time, it's the Washington Post checking in to remind us that good ol' TV is still chugging along. There's little doubt that the TV advertising model is in trouble, as advertisers shift their spending to online and other media. But this shift, really, has little to do with DVRs, and as the original article points out, DVRs offer broadcasters a chance to address many of the problems advertisers are raising with TV ads. The biggest issue is that advertisers can't easily track who's paying attention, just rough numbers of who might have seen their ad. But the DVR allows them to introduce new types of ads and services that mimic online ads and better engage viewers than traditional spots -- one element that can help explain why DVR users remember the ads they don't skip as well as or better than non-DVR viewers. While DVRs may be causing a drop in TV ad rates, their real effect is to make the TV ad market more efficient and effective by making broadcasters and advertisers realize that their typical fare needs an overhaul to make it more compelling, and in turn more watched and more effective. So in this sense, the DVR isn't killing the TV ad industry -- it's really helping improve it.

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Wizard Prang, 21 Aug 2006 @ 9:41am

Moot Point
"There's little doubt that the TV advertising model is in trouble"...

The TV advertising model has ceased to be relevant for those consumers who are paying for their content already (Cable, Satellite, etc.).

Why should consumers be forced to sit through advertising to view PAID content?

"DVR isn't killing the TV ad industry"

True - it's forcing it to evolve.
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- Anonymous Coward, 21 Aug 2006 @ 10:09am
  
  Re: Moot Point
  Its not moot, and the advertising isnt irrelevant.
  
  It would be, but you see, you ARE being forced to sit through said advertising.
  
  And the article is saying the preemtptively evolved when someone (themselves) cried wolf. Not that they had a valid reason to do so.
  
  Back to your point, the advertising is there because there is money that needs to be made. You think you are "paying for it already" but the truth is that you are not. Wehn you pay your cable bill, you are (sadly) only paying for the access to the content. You pay FOR the content by your eyeballs gracing the commercials. (same thing with websites)
  
  If everyone used firefox with adblock and noscript, there would be no internet, as noone would be willing to pay each and every individual site for access to it. Nor do we want the sites to micro-charge our isp's, and our isp's to macro charge us.
  
  The only thing different between the cable-tv world and the cable-internet worlds is the number of middlemen. In the tv-content world, that number is fixed.
  
  The copyright holder licenses the content to a network, the network licenses rebroadcast rights to the cable companies, and the cable companies decide which channels to give you in which bag.
  
  In the "on-demand" model, you get to cut out a middleman. But that model has yet to prove anything other than a pipedream. Noone seems to care about on-demand TV. (Except sports...)
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  - Anonymous Coward, 21 Aug 2006 @ 2:02pm
    
    Re: Re: Moot Point
    The Internet existed BEFORE online advertising. If everyone used Firefox with adblock or noscript there would be less bullshit on the Internet. Sure, there would likely be quite a few less websites but it's not insightful to say the entirty of the net would simply disolve. Knowing what we know today sites would likely become better at offering online services worth paying for rather than spoon-feeding the world 99.99% hyperbole crap.
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    - Anonymous Coward, 21 Aug 2006 @ 4:33pm
      
      Re: Re: Re: Moot Point
      Right...
      
      And just who would be paying for it and how would the transactions be conducted?
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  - Wizard Prang, 23 Aug 2006 @ 9:14am
    
    Time for a real-world example
    In Britain, there are two types of TV channels. The BBC, where you pay a license fee to watchad-free content; and ITV, which is free to view, but you get to watch ads.
    
    If I were NOT paying to view the content (i.e., "rabbit-ears"), the TV execs might have some kind of moral high ground. But this is not the case. I would rather pay TiVo $12.95 a month for the privilege of not having twenty minutes of every viewing hour wasted.
    
    The advertising execs will not like this, but that's the way it is.
    They can whine, complain, and moan.
    They can disable commercial-skip.
    They can turn up the volume during commercial breaks.
    
    What they cannot do, however, is MAKE me watch advertising.
    
    And there I rest my case.
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- Wait a sec, 21 Aug 2006 @ 11:10am
  
  Re: Moot Point
  I don't know how much you're paying, but my $40 a month pretty much just pays for the cable company to receive and transmit like 200 tv signals to my house over lines that they maintain, it doesn't pay for all the production costs of every show that goes on all those channels.
  
  You want free, plug an antenna into your tv and watch what you get that way.
  
  ...I agree that ad evolution is good
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  - Anonymous Coward, 21 Aug 2006 @ 11:24am
    
    Re: Re: Moot Point
    You're $40 probably doesn't even cover the cost of the gas that the line maintenance guy spends to come out and fix your "fuzzy" picture because some idiot next door is stealing you cable.
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- Jamie, 21 Aug 2006 @ 11:55am
  
  Re: Moot Point
  You pay for magazines with advertising in them, don't you?
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  - Wizard Prang, 24 Aug 2006 @ 9:13am
    
    Er...
    ...no.
    
    To quote Harold Ramis, "Print is dead"
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Sanguine Dream, 21 Aug 2006 @ 9:52am

I've wondered
A few months ago there was some network or something that was pushing for a way to prevent viewers from skipping ads on DVR. Why charge a customer a monthly bill for content, charge an additional for DVR service, and THEN prevent them from using it as it was intended?

I record shows while I'm at work during the week. Well there are other things I want to see at night as well so I have to fast forward through the commercials to keep up with the shows. I pay a monthly bill to DirectTV for shows and movies not ads.
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- Anonymous Coward, 21 Aug 2006 @ 10:19am
  
  Re: I've wondered
  I wonder the same thing too.
  
  Alienating your userbase by doing something prohibitive like that with no real benefit to the user is not going to win anything, let alone lower churn.
  
  the average person watching tv is too lazy to skip the commercials. When they think to do it, thats fine, they will. BUT if they find they can't, then they will get upset, and any commercial played then will be instantly percieved in a negative light, thus making that advertising rather negative advertising. Do the advertisers really want to PAY for negative advertising?
  
  HEY MPAA ARE YOU LISTENING?
  
  I didn't dislike the MPAA 'til they totally screwed up on the dvd warnings thing. Now I hate them with a passion, and I get reminded just how much I hate them every time I put on blues clues or dora the explorer... I stopped buying movies for myself or my wife, they became too annoying.
  
  Why does it take 5 minutes to get to the point where I can press play? What was to be gained by thoroughly pissing (my apologies for language) me off by blocking my ability to not view the ads and legal warnings? All it did was lose a customer.
  
  (to all you pirates, No, I didn't replace my entertainment habits by stealing content... I just stopped consuming it. Its actually not that hard to do. Your use these issues to justify piracy makes you look like an idiot, not a champion.)
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chris (profile), 21 Aug 2006 @ 10:48am

tv advertising is getting better?
i don't know if i have some sort of advertising related allergy or what, but if i see too many ads for something, like say a movie, it destroys my desire to go see it.

i never saw "minority report" because of the millions of ads i saw for it. i had to be dragged by my wife and her friends to see "the davinci code" even though i liked the book because of all the adverts and "controversy" surrounding the film release.
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- Sanguine Dream, 21 Aug 2006 @ 1:41pm
  
  Re: tv advertising is getting better?
  And that is why I refuse to go to the theater to Snakes on a Plane. Face it the olden days of making a some ads and letting the public chose are long over. That movie was an attempt at making a cult classic. You can't make a cult classic. Lucas had low hopes for episodes 4-6. The original Star Trek was cancelled. But look at how they've blown up over time. Time is the key ingredient to a cult classic and no amount of blitz advertising is gonna speed up the process.
  
  Snakes on a Plane barely beat out that Ricky Bobby movie with Mike Ferrell by like $1mil. for the number one spot. Now if people are cosplaying, collecting figures, and still referencing this movie 15 years from now then maybe you can make the argument that it is a cult classic.
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  - Tyshaun, 21 Aug 2006 @ 1:57pm
    
    Re: Re: tv advertising is getting better?
    And that is why I refuse to go to the theater to Snakes on a Plane. Face it the olden days of making a some ads and letting the public chose are long over. That movie was an attempt at making a cult classic. You can't make a cult classic. Lucas had low hopes for episodes 4-6. The original Star Trek was cancelled. But look at how they've blown up over time. Time is the key ingredient to a cult classic and no amount of blitz advertising is gonna speed up the process.
    
    Snakes on a Plane barely beat out that Ricky Bobby movie with Mike Ferrell by like $1mil. for the number one spot. Now if people are cosplaying, collecting figures, and still referencing this movie 15 years from now then maybe you can make the argument that it is a cult classic.
    
    As someone who did see the movie, I can tell you you're "interesting" logic allowed you to miss a truly original and fun movie.
    
    Of course you can't create a cult classic. BTW, most of the hub-bub about SOAP was from the internet, not TV adverts. Their was an unprecendented number of fansites and "what-if" scripts floating out there that the advertising people and studio had nothing to do with.
    
    Finally, most cult classics tend to bomb big time in their initial release (Rocky Horror Picture Show is an excellent example of this, until it was picked up as a "midnight matinee" it hardly made any money at all). Cult classics do not equal big box office just crazed fans.
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Neum, 21 Aug 2006 @ 10:52am

How is this different from print?
When you buy a magazine, newspaper, etc. you are paying only a small portion of the cost to produce that item. Broadcast is just the same. I work in Accts Payable at a broadcast TV station and the power bill for our main transmitter alone last month was nearly $18,000. That is for two stations, not including payroll, basic supplies, camera equipment and supplies (another $10-15,000/month). The list goes on. One month's worth of bills is at least $200,000. The $75 you give to Comcast each month doesn't really cover it.
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- tehdirtaddict, 21 Aug 2006 @ 11:03am
  
  Re: How is this different from print?
  Ok, it is understandable that the price to keep the station up is very high. But unfortunately there are already too many services that we need to pay and shrinking the price down is desirable.
  
  If there are cheaper options, i will for sure switch. Its all about cost to us, the consumers. IPTV is coming; that will make local tvs stations make a 180 degree turn, or go out of business.
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  - Anonymous Coward, 21 Aug 2006 @ 11:06am
    
    Re: Re: How is this different from print?
    IPTV is not coming, it will be killed by big business.
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    - tehdirtaddict, 21 Aug 2006 @ 11:30am
      
      Re: Re: Re: How is this different from print?
      Same thing was said about VoIP.
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- Anonymous Coward, 21 Aug 2006 @ 11:04am
  
  Re: How is this different from print?
  It's different from print in that print publications aren't trying to keep you from turning the page so that you have to look at an ad. If I buy a magazine, I don't have to look at all of the ads, I turn the page. But what you and your management don't get, is that if a magazine is too full of ads, I simply will not buy it. If I am forced to see too many TV ads, I will turn the channel.
  
  Another thing you do get is that when I buy a magazine about guns, it is not full of ads for tampons. So the ads that I see, Im actually more inclined to be interested in. Alternately, in the wonderful world of TV, when I am watching the X Games or Monday Night Football, I am still bombarded with commercials for feminine itching and Pampers. Great job there.
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  - Neum, 21 Aug 2006 @ 11:11am
    
    Re: Re: How is this different from print?
    I agree with you on points, advertising should be better targeted. From what I see, it is, but obviously there are problems. However, if someone was selling copies of magazines with all the ads removed, not only would the price have to be cripplingly high, but the original provider (and their advertisers) would probably cry foul. What I was pointing out is that people complain that they have already "paid" for their content, when in truth, the bill far from paid. My GM is constantly talking about "convergence" with other media forms, specifically internet. It is a shame that it has taken broadcast this long to catch up, but most 50 year old industries are slow to change. I love my DVR but I still see the necessity of advertising.
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  - Beefcake, 21 Aug 2006 @ 1:02pm
    
    Re: Re: How is this different from print?
    Most tv ads are targeted to the demographic of the program. The fact that tampons are advertised during Monday Night Football is not an indication of napping ad-buyers, but an indication that more women are watching football.
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- Beaches Video Dude, 21 Aug 2006 @ 11:41am
  
  Re: How is this different from print?
  Is that 200 k for one or two stations? And please, local programming is making money -
  
  6 minutes of commercials per hour x 16 hours per day=96 commercials per day x 365 = 35,040 60 second commericals per year divided by 12 = 2,920 commercials per month.
  
  $200,000 divided by 2920 = $68.49 per 60 second commercial. This is what it takes to keep your station on the air. Most commercials are 30's so divide that by half. $34.24 per 30 second commercial.
  
  The average 30 second commercial goes for a minimum of $55 - so your bosses are making $20 per spot profit x 35040 = $700,800 profit per year. Before sponsorships, cross promotions, etc etc.
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  - Neum, 21 Aug 2006 @ 11:53am
    
    Re: Re: How is this different from print?
    The 200k is for both stations but it is a minimum that does not include payroll. And yes, we do make a profit, we are not public TV. Profits make business, but we can't run with out it. 700k per year profit divided up between the nearly 100 full time employees some of which make meager salaries other making rather large, I'd imagine, not a whole lot of room for a large advertiser to pull their dollars if they feel that they aren't reaching enough people.
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Jim Edwaqrds, 21 Aug 2006 @ 11:06am

Old medium, new approach
I have to agree with Anonymous Coward here.....

These slick shows require advertising to make enough money to produce their shows and afford to pay the people involved. (I'm not qualifying that they are getting paid fairly, just stating the fact)

As technology increases and our ability to filter out all the crap we don't want get better, the crap we don't want uses the same technology to make us get it. I've had DVR for about a year and I can't figure out how I lived without it, and yes I fast forward through commercials....but to be fair all you keyboard critics, I didn't buy it to skip commercials, I bought it to watch what I want when I want to....and not have a stack of DVDR's or VHS tapes that my wife would hate me for. So if they have to force me to watch the commercials well I won't like it, but lets be honest, it may be better then the alternative.

What's the alternative you say? Have you seen how abundant the "lower third" ads are getting on channels like USA and TBS? imagine if it wasn't pushing another show for 10 sec, but pushing a product the entire time? It's a Media Technology cold war, and it's not going away....It's time to choose America, do we build a better bomb or say enough is enough....
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dean collins, 21 Aug 2006 @ 11:58am

KFC
http://deancollinsblog.blogspot.com/2006/02/kfc-technique-to-fight-for-dvr-mind.html Perfect example of your post
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- Neum, 21 Aug 2006 @ 12:08pm
  
  Re: KFC
  This is a great example except that KFC probably paid some ad exec a wheelbarrow full of money to come up with this idea. And if it works, it won't be long before someone patents it.
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Ben Robinson, 21 Aug 2006 @ 12:08pm

DVRs make no difference to me
I have a DVR and i fast forward through adverts, i even sometimes use the "pause live tv" function simply so i can pause the tv for 30 mins, make my dinner, come back and start watching 30 mins behind so i can fast forward through the ads for a couple of hours or so. However this isn't that much difference to what i have always done, flip channels when the adverts come on, i hate ads, i don't want to watch them more than a couple of times, then i have got the message and the other 400 times are not going to make me buy the toilet roll or 15 blade razor. The tv networks have every right to use ads to make money and pay for the content, and i have every right to chose not to watch them. If technology moves on and standard 15 mins ads 45 mins programme per hour model breaks down, then it's up to the tv networks to change their business model to catch up. What if ad breaks were 30 seconds long, but advertiser had to pay a lot more to advertise in them, would you bother fast forwarding for the sake of 30 seconds, what if you could chose to pay extra and not have ads, what if advertsing were done through product placement or pre and post program sponsorship, what if watching ads gave you codes that worked as "virtual coupons" that gave you money off, what if you had to watch a series of adds in order to enter a competition and you knew that if you missed that pepsi ad on tuesday it wouldn't be shown again and you would miss out on a chance to win a new car or a house. There are many options, the TV networks just need to move with the times and be creative.
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Justin, 21 Aug 2006 @ 1:50pm

You actually pay for your mags LOL sucker !
"You pay for magazines with advertising in them, don't you?"

No, no I don't. I get everything from CIO to BeverageWorld to Stuff. And I don't pay a dime for them. Least we forget they need to meet a number of subscribers or advt start pulling ads or asking for a price drop. So why pay for what they gladdly give for free?

Back to TV. HBO, Showtime, and the rest of the 'pay-pay-again' channels do not have commercials (expect of course promos for their own content.)

I seem to remember that they have award winning shows and they make good money.

So cable doesn't have an excuse except for giving me crap. Think about this: A program to let me pick my own content. Charge me $25 to 'have the privilege of cable' and then charge me between $5 and $20 for content channels. The cable companies can make money by having their own content channels. They can make money by charging content providers.

Best of all... it gets rid of the SHIT channels!

No really, who's going to pay for a religion channel asks you to call the channel to make a pledge... anyone?

Read this for more info on how hurt the cable companies aren't:
http://uspirg.org/uspirg.asp?id2=10531&id3=USPIRG

Lastly, I'm all for commercials on broadcast TV. I don't pay for that. They are free. So they need that avenue.
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James, 21 Aug 2006 @ 2:15pm

For me, this is moot. Ditch TV altogether
TV advertising is a moot point for me. I have a nice TV, surround sound system, and DVD player. I use it for Netflix only, because I have no cable and no antenna.
I use Netflix for entertainment and NPR and the Internet for news. If I really want to go see a sports event, I'll go to a local sports bar to see the game -- it's a lot more fun that way!
It's amazing living without TV and TV adverts. When I go to the gym and watch TV while running on a treadmill I realize just how vapid and inane most of the content is. It's been two years now without TV and I just don't miss it. At the same time, the quality of the movies I'm watching has gotten so much better through Netflix and I'm much more informed about the world through NPR and the BBC than I ever could be with the evening news on Fox or CNN.
There's no looking back!

-James
Seattle, WA
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Bongoman, 21 Aug 2006 @ 3:02pm

DVRs
I have actually backed up the DVR after a skip to check out a commercial--and you're right, I generally remember those better than commercials I am "forced" to watch, or are broadcast while I'm in another room during the commercial break! I'd be happier still if broadcasters and cablecasters would stick to the time-honored tradition of starting and ending programs on time!
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