Ad-Skipping PVRs Will Slash National TV Budgets by $7bn

27 November 2002

‘The moving finger writes; and having writ / Moves on,’ commented Omar Khayyám, who was not an analyst at Forrester Research and was not referring to the forthcoming impact of personal video recorders on American national network TV.

Omar got it in one, however, with the next line of his famed verse: ‘Nor all thy piety nor wit / Shall lure it back to cancel half a line / Nor all thy tears wash out a word of it.’

Which pretty well describes with what many TV executives are feeling right now after reading Forrester’s latest report, Will Ad-Skipping Kill Television?, compiled in conjunction with the Association of National Advertisers.

Summarizes the report: “As PVR's penetration nears two million households, advertiser concern is mounting. Advertisers say they will cut TV spending across the board, on national, local, and cable advertising, in the next five years as PVRs reach 30 million households.” The impact on the networks will be a $7 billion (€7.06bn; £4.48bn) decline by 2007, predicts the study.

But all is not unrelieved gloom. “Ad-skipping won't destroy the TV business,” opines the report’s principal architect, Joshua Bernoff. “New ad revenues for commercials in video on-demand will nearly make up the shortfall, and we also expect consumers to pay $6 billion for new services like subscription video on-demand in 2007.”

The networks can fight back, believes Bernoff, who suggests linking ads more closely to programs, with advertisers “transforming their commercials to lure in the ad-skipper”.

The report, which polled 112 senior marketers (mostly directors and vps of advertising) in over a dozen different vertical industries, also advises advertisers to consolidate their ad buys with fewer networks.

This, says Forrester, will improve their chances of first shot at sparse product placement and sponsorship opportunities. The researcher also suggests advertisers reserve five percent of their media budget for non-standard formats such as interactive program-guide panels, interactive commercials, and ads on PVR menus. All of which, Forrester and the ANA believe, are impervious to ad-skipping.

Let Omar also sign-off this story for meditation by the networks: ‘Indeed the idols I have loved so long / Have done my credit in this world much wrong: / Have drowned my glory in a shallow cup / And sold my reputation for a song.’

Data sourced from:; additional content by WARC staff