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| The Decline of TV as You Know It |
January 19, 2004 |
By Jim Harris
Imagine you could only read your favourite book on Thursday nights between 8:00 and 8:30 and you couldn’t get up to go to the bathroom until you had finished a chapter. Sound ludicrous? Well, isn’t that how you watch television?
But in the U.S. TiVo has revolutionized TV viewing. TiVo (http://www.tivo.com) is the leading manufacturer of personal video recorders (PVRs), which record TV programs to a hard disk. This allows consumers to record their favourite programs and watch them whenever they want.
Don’t like the annoying commercials?
You can fast forward through two minutes of commercials in two seconds. Plus TiVo allows customers to pause and rewind live television, record between 40 and 120 hours of programming depending on the unit and watch their favourite show while recording another program at the same time.
In November 2003 TiVo surpassed one million subscribers for the first time and it is now signing up new subscribers in the U.S. at a rate of 600,000 a year.
The experience is addictive.
It’s all about control. Consumers are no longer a slave to the schedule set by network executives because TiVo’s strength has been making it as simple as possible to record shows. VCRs have delivered some of this, but are simply too difficult for many consumers to program.
TiVo by comparison is simple. But TiVo is not available in Canada.
CANADIAN ANSWER TO TIVO
In November Rogers announced its own PVR. It sells for $600 with a $100 programming credit and the monthly fee is two dollars. The unit has an 80GB hard
drive which can record up to 50 hours of programming. By early 2004 a rental option will be available.
You record by navigating through Roger’s interactive programming guide using the remote and highlighting the program you want. You can then choose to record the program or the entire series.
And what differentiates Rogers’ PVR is that you can record two other programs while watching a third.
Bell ExpressVu launched its PVR two years ago but the market in Canada is still small, estimated at only 55,000 units. While Bell won’t off icially confirm any numbers, a spokesperson admitted less than 10 per cent of its 1.3 million satellite customers have its PVR.
New ExpressVu customers can get a PVR (with an 80GB hard disk), dish, remote control and wiring for $499 with a $150 hardware credit towards their
monthly programming fees.
And Star Choice has announced it will launch a competitive unit in 2004. So the stage is set for a Canadian PVR battle.
IMPACT ON ADVERTISERS
While PVRs are an emerging market in Canada, the trend poses a significant threat to traditional TV advertisers.
The majority of TiVo users fast forward through the ads on recorded programs.
Advertisers have seen ad rates rise while audience share has been falling. In fact, the ’Net Generation — those born after 1976 (the date of introduction of the Apple, the first personal computer) — are spending more time surfing the Web than they are watching TV.
The major difference between the Web and TV is that users control the Web experience, determining what content they consume. PVRs do the same for TV
watchers. The advent of the PVR in fact may be the best thing ever for TV — by giving control to the viewer it may actually reclaim a generation that is currently being lost to newer technologies. The challenge then is for advertisers to figure out how to create content that people will actually choose to watch.
THE CONTENT PUSH
In the U.K., Honda created a sensation with an ad called “The Cog” which cost millions to make, took more than 600 takes to film and three months to complete.
Downloaded more than a million times just weeks after its release, “The Cog” is one of the most downloaded ads in Internet history http://www.honda.co.uk/multimedia/index.html) and has paid for itself in free publicity and viewings many times over.
It’s an example of the move from push to pull — where rather than alienating viewers by showing the same ad three times during a half hour program, the
marketers create content consumers want to see and virally market it to each other.
Attracting viewers with this kind of creative drive will become more necessary in the future. And we are already seeing more product placements in movies
and TV shows. All of which means that to thrive in the emerging reality of PVRs advertisers will have to change.
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