Is TiVo Killing TV and TiVo ?
Sometimes a killer-app is just what the name says – a killer-app . . . .
USA Today reported this week that TiVo will “offer stations, advertisers and program producers year-round, second-by-second information about the shows and commercials watched by people who have one of the company’s DVRs. The anonymous data will come directly from the boxes.” So basically, the advertisers will have a clear picture of how many viewers (if any) are watching the ads they paid to produce and put on TV.
TiVo has built a successful business in providing a service that allows viewers to watch what they want, when they want. This sounds an awful lot like the internet model of content delivery, doesn’t it? There already are numerous “internet enabled” services today that offer traditional tv programming and movies which can be viewed instantly on your regular tv or computer screen – Hulu, YouTube, Netflix, and many others.
If TiVo is indeed successful in selling user information to local stations and advertisers, what will happen? It seems pretty clear to me that as advertisers realize that precious few viewers are watching the ads, they will pay precious little for advertising slots to traditional tv stations. With less of a budget, these groups will likely go the way of other distributors that provide little value to users…..away.
TV stations/channels are akin to newspapers – they aren’t content companies either, they are merely a distribution vehicle for writers and content producers. The fall of newspapers has been widely documented – see recent articles about the NY Times $74.5M Q1 loss and The Detroit Free Press’ move to limit delivery to just 3 days per week. It is likely that over time TiVo’s move will have a similar effect on TV stations and ultimately on TiVo itself.
TiVo depends on the traditional linear scheduling model where programs are scheduled in a timeline format and viewers tune in to record or watch at a certain time. This is in stark contrast to the internet model where users show up when they want and watch what they want instantly – “on-demand”. As there are fewer and fewer dollars supporting the traditional linear tv scheduling model, the model will begin to fail. And when this does, a service that records programs so you can watch them later becomes truly unnecessary.
We should all thank TiVo for helping us make tv more like the internet model, but that thanks will likely mean precious little as they . . . go away.
Filed Under Business Models, Internet Trends & Drivers
3 Responses.... add your own
Gary Moran writes...
There is one piece that is missing from this, Tivo and cable companies can sell this data, which then can help advertisers target their markets. The shotgun advertising idea may be dead but targeted ads are just beginning. As someone who has worked in the Cable industry for years, this is a big initiaitive that is just beginning.
Rick Thomas writes...
Gary – I completely agree with your point. The shotgun model is being pushed to the ropes as technology allows advertisers to better understand who and how many people are viewing their content. From my perspective, cable companies are in a good position to leverage this new data because they have the ability to offer customers content that is specific to their liking. On-demand programming on Cable is still relatively young, but this model is likely to become the norm for cable companies. Aside from sporting events and a few other live events, scheduled programming is really unnecessary(in my opinion). People are accustomed to taping their favorite shows like Lost or Entourage and watching them at a time that is convenient for them. There really is no difference in taping(and watching later) and simply watching programs in an on demand basis through “channels” like On-Demand Cable or Internet “channels” like Hulu.
Mike Granetz writes...
Television is entertainment. Advertising is perceived as anannoyance. Now, technology allows us to remove or reduce that annoyance. But advertisers and those that selling it have gotten smarter – with ad delayed viewing, produce placements and even using the star of your show in an ad during the show so you think the program is back. However, the metrics don’t lie. First generation advertising crashed and burned on the web – but now, with the new media, user-generated content and social networks it is a billion dollar business. What change have we seen over the last 50 years in television advertising? The solution isn’t to force users to watch ads, but for advertisers to get smarter and more creative with messaging and integrated campaigns? Just see the latest VW ad on TV, the website promotes: http://www.facebook.com/vw – not http://www.vw.com. And who doesn’t stop and skipback when they see Apple’s Mac vs PC ads (humor and brand) blur by? Perhaps it isn’t the media, but the message.
Leave a comment.