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Belch: Advertising and
Promotion, Sixth Edition
V. Developing the
Integrated Marketing
Communications Program
bring the one-to-one world of the Internet to television.
PVRs will also make it much easier for content
providers to push programming directly to
end-users, potentially on a pay-per-view, commercial-free
basis.
The PVR companies note that rather than fearing
their new technology, advertisers should be
embracing it, since the marriage of TV and the
Internet will make possible interactive advertising
and give viewers the ability to purchase products
directly from the television screen. PVR companies
could take certain commercials out of a program
and replace them with ads that are of more interest
to specific types of TV viewers or ads that
include contests or other incentives that will
encourage consumers not to skip them. Moreover,
both companies argue that they are not out to kill
the television networks, because their business
relies on the programming the networks provide.
Without commercials, there would be no money to
pay for new programming, which would mean the
supply of new shows could end unless other means
of funding were found.
Both TiVo and SONICblue have been marketing
their PVRs and personal television service very
heavily, although TiVo is the brand that has
become practically synonymous with the product
category. However, as of late 2002, only 1 percent
of the nation’s 106 million TV households owned a
PVR, and the new technology has not had a major
impact on television advertising’s traditional business
model. Nevertheless, market tracking firm Forrester
Research predicts that PVRs will be in nearly
50 million households by 2007. A senior analyst for
the company notes that TV as we know it is going
to die in the next five years. Instead of being on a
350
11. Evaluation of Broadcast
Media
© The McGraw−Hill
Companies, 2003
network schedule, it’s going to become demanddriven
as consumers will use PVRs or this capability
will be supplied by cable and satellite TV companies.
Consumers will be able to watch what they
want and when they want, and this will clearly
change how they relate to advertisers.
Not everyone agrees with these predictions:
Many argue that television is a passive medium
and viewing habits will not change easily. A TiVo
senior vice president notes: “There’s tremendous
inertia associated with watching TV. There’s no
other human behavior that’s as entrenched. We’ve
been watching TV the same way our whole lives.”
However, as prices of the devices come down and
they become easier to use, there is a strong chance
that sales will take off. Thus, many marketers view
the PVR as a very serious threat to TV advertising
and are searching for ways around the problem.
TiVo is encouraging marketers to experiment with
extended-form ads and other types of “advertainment”
that can be shown to its subscribers. The
company feels that viewers may choose to watch
advertising if the content is as compelling as the
programming.
It appears that changes are well under way that
may revolutionize the way we watch television and
threaten to make the traditional TV advertising
business model obsolete. In the future, TV viewers
may not have to sit through all those ads for paper
towels, toothpaste, and automobiles. On the other
hand, would TV really be as much fun without the
commercials?
Sources: Jefferson Graham, “PVRs Change the Broadcast
Picture,” USA Today, Aug. 13, 2002, pp. D1, 2; Scott Kirsner,
“Can TiVo Go Prime Time?” Fast Company, August 2002, pp.
82–88; Tobi Elkin, “TiVo Signs Sony, Realplayer for Long-Play
Ads,” Advertising Age, June 17, 2002, pp. 1, 41.
The emergence of new products such as personal video recorders is very important
because they will have a profound impact on television, which is our primary form of
entertainment as well as the quintessential advertising medium. TV has virtually saturated
households throughout the United States and most other countries and has
become a mainstay in the lives of most people. The average American household
watches over seven hours of TV a day, and the tube has become the predominant
source of news and entertainment for many people. Nearly 90 percent of the TV