TiVo Thinks Again About Ad-Skipping

19 November 2004

Personal video recorder pioneer TiVo has realised - albeit a litle late in the day - that it may have bitten the hand that feeds it.

So it has come up with an schematic to refocus viewers' attention on TV commercials which its technology allows them to skip.

PVRs have found their way into two million US homes and 20% of households are expected to own one by 2008. The $99 (€76; £53) machines record and play back television programs simultaneously and fast forward ads.

From March 2005, however, a static pop-up ad, or 'billboard', will appear when TiVo users skip through an ad. It might be an advertiser's logo plus a message urging viewers to check out a new car or enter a contest.

Says Kimber Sterling, TiVo's director of advertising: "Realistically, we're not expecting this technology to force half the folks to go back and engage with the ad. But if 5% did, it would be a huge home run for us, and advertisers."

But as industry analyst Rob Enderle pragmatically observes: "TV programming is supported by advertisers. If advertisers stop investing in the medium because people are fast-forwarding through the commercials, the programs won't get made. So obviously, this problem has to be stopped."

Enderle points out that TiVo investors include media giants NBC Universal, Time Warner and Sony. They have a lot to lose!

Tim Spengler, evp of Initiative Media, syas TiVo's move is "a step in the right direction ... satisfying viewers and the business of ad-supported, free TV."

However, Alan Schulman at ad agency Brand New World, remains unconvinced: "A billboard is not like running an ad. A static impression isn't compelling."

Maybe so. But he might be cheered by the bizarre possibility that skipping ads could become a criminal offense.

The Intellectual Property Protection bill, currently in process through the US Senate, has a provision to prohibit technology that skips commercials during a DVD or televised movie.

Data sourced from USA Today Online; additional content by WARC staff