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The PVR revolution: Mere myth or nightmare to come?

Nov 18, 2002  •  Post A Comment

Will the personal video recorder-TiVo, Replay and the like-change TV advertising?
A new study found that almost one-quarter, or 23 percent, of today’s PVR owners said they never watch commercials anymore.
In fact, more than one-fifth of PVR owners have stopped watching live television altogether, according to the PVR Monitor, Wave III study.
Today’s PVR owners tend to be disproportionately older and male and videophiles, TV industry insiders, gadget heads or other early adopters. In fact, 77 percent of respondents in the PVR Monitor study reported that their PVR had been purchased by a male head of household and half bought their PVR within the past year and a half.
The majority of those who do watch either live or recorded commercials or promotions on their PVRs said they do so only “occasionally,” according to the study. Twenty-one percent said they never watch live commercials and 19 percent said they never watch promos at all. Twenty-three percent said they never watch recorded commercials and 21 percent said they never watch recorded promos at all.
Nearly four in five (79 percent) PVR viewers said, however, that there are commercials they will make a point of watching, rather than skipping. The commercials and promos that PVR owners do watch are the ones they find entertaining or are for products and services that already interest them.
PVR owners tend to lose track of what network originally telecast the shows they opt to record for later viewing, which itself suggests that both new programs and new ad campaigns will have a tougher time piercing the self-programmed TV consciousness of PVR viewers.
The new advertising models that the TV and advertising industries are testing (e.g., ads downloaded directly to the PVR or product placement within a particular show) found little favor with the PVR viewers studied, except for two possibilities: the suggestion to visit a Web site for more information and the possibility of collecting incentives, such as coupons and rebates, for viewing ads.
The fears that TiVo and PVRs have engendered in the TV industry may be out of proportion to the numbers of recorders currently in use (just over 500,000 TiVos). But that miniscule penetration level may begin to change during this closely watched holiday season, when discounts and promotions will mean that some PVRs are for the first time priced affordably. TiVo predicts that it will cross the 610,000-units-sold mark by the end of January.
Already 55 percent of the PVR Monitor study respondents report they paid less than $300 for their PVR. If the mass market responds to price drops, that will be good news for some networks, which are more heavily viewed by PVR owners, and not so good for others, which will begin to bleed ratings.
According to the study, the channels cited as the ones “watched more” because of the PVR are, in descending order, Cartoon Channel and Sci-Fi Channel (tied for first place), Weather Channel, Fox Broadcasting and NBC.
“TV viewing post-PVR ownership is dramatically different,” the study found. “Viewers are watching more television. … They don’t, however, know necessarily which numeric channel they are watching or which network or brand is delivering the content to them.”
That result-that PVR viewers are not as network-brand-conscious as viewers without PVRs-“has tremendous implications for television networks,” according to a summary of the study’s first wave, which was conducted last year. “If this trend continues, the network may cease to be a recognizable consumer brand,” the study predicted. “And network lineups will have less impact on a viewers who no longer identify their favorite shows with the networks broadcasting them.”