Digital video recorders put advertising revenue at risk

Satdude

Digital video recorders put advertising revenue at risk

A report suggests that over half of digital video recorders users surveyed say they skip commercials, which could risk $8billion dollars in television advertising revenue in America.

An online survey by JupiterResearch found that 53 per cent of digital video recorder users skipped television adverts. If they did this all the time, the report concludes it could risk $8billion of the $74 billion television advertising market in United States.

The report, The DVR Dilemma: Managing Consumer Behavior, also found that those that skipped commercials did not watch significantly more television than other viewers.

The findings of the report, which was admittedly based on a limited online survey, are consistent with anecdotal evidence from users of digital video recorders, many of whom say that they simply do not watch television advertisements any more. In practice, they probably still see some commercials, but the erosion in the value of such advertising in reaching these viewers is significant.

David Schatsky, president of JupiterKagan Research, said the revenues at risk were not a foregone conclusion, but “reworking ads to leverage the unique DVR experience could open new avenues of creativity and relationships with viewers.”

However, if viewers are motivated to skip adverts, reaching them in the first place is likely to be a challenge.

In the UK, nearly a fifth of satellite television homes now have Sky+ digital video recorders. If they are not watching as many commercials the value of television advertising will ultimately be affected. Subscription has already overtaken advertising as the primary form of revenue.

The impact of the digital video recorder and the corresponding effect on the value of the 30-second spot are often overstated but cannot be ignored. It is simply the latest in a series of innovations, from the remote control to the video cassette recorder, that have been seen as the end of television advertising as we know it.

In the long term, targeted, contextually relevant messages, rather than irritatingly intrusive advertisements, are likely to be more effective.

Regards Satdude.

BarMoo

[sorry it turned into another essay ]

Another survey today revealled that most household TV viewing is still LIVE - so maybe not quite the myth that PVR's are taking over our lives and that advertiser's are losing money because of us (sic).

Fact is a commercial break (not including promos) is at least 4mins these days: unless you watch something at 4'o'clock in the morning - or the breaks during Channel Four News. AND most programmes are sponsored. AND there is a premium rate phone comp, yawn.

An ad break before the Iraqi war(s) was typically 2 - 2.5mins long. The 4min break existed ASFAIK - but that was special (another sic).

My mother actually said the other day (true) that she didn't watch Five because it had too many commercials. My mother is an ITV addict. Do the breaks differ in length between them, I don't know. I haven't seen ITV for years now. Anything more than the BBC's ad-free wonderverse sends me hopping to my DVD cabinet in a flash. But even the BBC are surreptitiously adding more promo-ads year on year.

So, it probably won't come as a supprise to learn that in my own humble apartment I time shift as much shite on Five and Channel Four as I can to skip the ads and get on with what's left of the programme. Apparently, most PVR user's do this too, .... ?

Specifically with Channel4 and Five - if they showed their imported stuff (typically american) with the 'factored-in' American break pauses - i might live with it. I take that back. US TV sucks - because of the ads.

So Europeans now on par with the Yanks? God forbid. Mind you RTL Germany passed over to the darkside ages ago.

Ulimately what might draw me back to TV is the 3 ads in an hour rule that we had before. Aynone who has watched 'The Professionals' re-runs on M+M's and how that is hacked to death will know what I mean.

We know there is no going back. But why should advertiser's get spooked that we skip the ads. What do these guys watch at home - ad-free PPV?

Make ads less frequent and worth watching - and we might, well, watch them.

Advertiser's might have the knack to re-invent advertising and find new outlets - but in the meantime, they are hell-bent on ruining the perfectly plausible model of standard TV enjoyment. It will all come tumbling down.

Roll-on i-tunes telly downloads and DVD.

Have Fun, Moo.

JTA

ever tried to watch French public tv ? They don't have advertising breaks in programmes, but accumulate everything in between programmes. It can take up to 25 minutes between the end of one programme until the start of the next programme. The advertising breaks are themselves broken into several parts, by using short utility programmes, such as the weather, traffic info, stock exchange, money spending tips, tourist information or some seasonal images.