Skip the Spots, Buy the Product

By Jon Lafayette

TiVo, which threatened to wreck the ad-supported television business by making it easier for viewers to skip through the commercials that pay for programming, has made a deal with Amazon.com to allow viewers to buy products they see on TV using their remote control.

TiVo said the new home-shopping service is available on several shows in syndication and on cable, including “The Oprah Winfrey Show,” “The Ellen DeGeneres Show,” “The Colbert Report” and “Burn Notice.”

The company is hoping that as marketers fret about the effectiveness of traditional television advertising in the era of digital video recorders, it can invent new features that would be useful to those same marketers and attract some advertising revenue.

The Amazon deal allows TiVo subscribers “to purchase products related to their favorite TV shows or that they’ve seen in TV ads without leaving their couch,” said Evan Young, director of broadband services for TiVo.

If a guest on “The Daily Show” or “Oprah” has a new book, CD or DVD out, Mr. Young explained, a viewer could purchase it from Amazon using the TiVo remote without missing a second of the program, whether the viewer is watching live or a recording.

“The viewer with an impulse can buy right away and no longer needs to remember to do so the next time they are at their PC,” Mr. Young said. “Television advertisers and consumer products companies are no longer limited to the traditional linear shopping channels that require live viewing for product merchandising and fulfillment. If their product is seen or advertised on any TV show or network and sold by Amazon.com, it can be merchandised to viewers through TiVo.”

Home shopping has always been one of the interactive TV applications that has intrigued both TV programmers and marketers. Technology companies by the boatload have invested billions of dollars in systems that would turn remote controls into cash registers, but they have never caught on or become a big business.

One big hurdle has been negotiations over how to split the check -- how much goes to the programmer, the advertiser, the manufacturer and the technology company when something is purchased.

Another has been getting the technology installed over a wide enough base to make it worth people’s while.

TiVo, despite being one of the early entrants into the DVR business, and despite the surging popularity of the devices, has remained a relatively insignificant player in the marketplace, with a base of only a few installed customers. (The Amazon shopping service is available only to customers with specific models of TiVo DVRs in their homes.)

Most consumers these days get their DVRs from their television providers, whether they are cable operators or satellite providers such as DirecTV or Dish Network.

The satellite companies already are working on forms of interactive advertising but, like TiVo, their footprint is small and scattered geographically, diminishing how useful it can be to marketers other than as an experiment.

Several of the major cable operators have teamed up to create a venture called Project Canoe, designed to create a single interactive television system that will work on all of their systems, thus giving marketers a big, national platform for all types of hyper-targeted and interactive forms of advertising. That probably would include the types of program enhancements and home shopping opportunities TiVo is talking about.

Until Canoe can get afloat and under way, TiVo will be trying in its own small way to differentiate its product for both its subscribers and for marketers.

With its Amazon deal, TiVo is enabling its subscribers to look for products associated with the shows and movies they watch on TV and buy them directly, using their remote controls.

They also can use a search function to look up other shows or movies starring the actors featured in what they’re watching and buy those through Amazon.com as well.

“Teaming up with TiVo is a great way to engage consumers during a TV program with a direct connection to the product being sold,” said Scott Merlino, senior manager of business development at Amazon.com

That’s particularly true for marketers of entertainment products, who are big spenders on traditional TV commercials.

“Now a record label can merchandise and sell a new artist’s CD on a show where the music is featured, or a publisher can merchandise an author’s book during a talk show when the author appears as a guest—the marketing possibilities are endless,” Mr. Merlino said.