PVRs and Commercial Skipping: The Genie is Out of the Bottle

[Jason Dunn]

<div class='os_post_top_link'><a href='http://online.wsj.com/public/article/SB113020001206978306-3g8FaDqM2JAWzUAhUc_g3OiSuFw_20061025.html?mod=tff_main_tff_top' target='_blank'>http://online.wsj.com/public/article/SB113020001206978306-3g8FaDqM2JAWzUAhUc_g3OiSuFw_20061025.html?mod=tff_main_tff_top</a><br /><br /></div><i>"Bedoop. Bedoop. Bedoop. That's the noise a TiVo makes when it skips ads, and it is the most dreaded sound in the television industry. As TiVos and digital video recorders offered by cable and satellite operators proliferate, viewers are gaining more control over how they watch television. And many of them are using that power to say goodbye to advertisements. Digital video technology is both a blessing and a curse for the television industry. On the one hand, owners of DVRs are loyal television viewers. On the other hand, they like to skip over commercials that pay for creating the programs. There is no denying that a major transformation in television-viewing habits is under way. But rather than diminish the role of advertising in the industry, the shift is likely to push both television executives and advertisers to find new ways of marketing to consumers."</i><br /><br />This article covers the ugly truth that most of us are afraid to admit: if, tomorrow, everyone in the world had a PVR, the advertising market would be in the toilet overnight, along with most of the TV shows that we watch. I for one <b><i>loathe</i></b> watching real-time TV now that I've been spoiled by watching TV on my MCE 2005 and cable-company PVR. There are so many commercials on TV shows nowadays, it drives me insane to watch them. I'd say I only watch about 1 in 10 commercials - I'll stop the skip back if something looks interesting. Yet I also know that without those same commercials, most of the TV shows I watch would go off the air. We'd be left with cheap-to-produce documentaries and reality shows where there are no star-studded salaries involved. All the big-name companies would look elsewhere with their advertising budgets, and most TV shows would wither and die. I have the perfect solution: all those big-name, $500K-a-spot ads should contact me at Thoughts Media right away. :lol:

[Felix Torres]

If they hate PVRs, they must be apoplectic over DVD collections.
:twisted:

I have several friends who don't follow shows anymore, at all.
They're happy to wait a year and buy the DVD collection and watch on their schedule, with no need to even fast-foward since there are no commercials. Works for me, too. Last year I got my mother several seasons of 24 that way and it worked like a charm. Much better viewing experience than anything the networks have to offer, even with the new semi on-demand Start-over technology.

And with a full season running about a $1.50 per episode, the price is hardly outrageous and actually works out to about the same as a rented movie on a time basis.
(Plus, you know the show isn't getting cancelled on you, midway through a season arc...)

Those folks simply need to work out a new business model, fast!

[Jason Dunn]

If they hate PVRs, they must be apoplectic over DVD collections.

Ah, but they make money off of them, right? Whereas whether a customer has a PVR and is skipping commercials, or is watching live, they make the same money. Maybe ten years from now we'll be buying/renting DVD sets, no commercials, and all shows will go direct to DVD. I shudder to think what would happen to the $300,000 per episode salaries of those poor actors. They might have to settle for a normal wage. :lol:

[sundown]

I mostly watch TV that I've recorded on my DVR and like you skip though the commercials that don't interest me. But sometimes I see one I like and stop and watch. Someone who actually WANTS to watch a particular commercial is by far worth more to advertise to than someone you're forcing to watch a commercial. Perhaps at some point advertisers will be able to pay by "views" instead of the shotgun approach they now use. Then maybe they can do a better job of targeting the ad for the audience.

I hope they never put code in the transmission that prevents you from skipping commercials. Kind of the like the internet with mp3's - it's going to be hard to stop because everyone who tries it likes it and soon can't live without it.

[Felix Torres]

If they hate PVRs, they must be apoplectic over DVD collections.

Ah, but they make money off of them, right? Whereas whether a customer has a PVR and is skipping commercials, or is watching live, they make the same money. Maybe ten years from now we'll be buying/renting DVD sets, no commercials, and all shows will go direct to DVD. I shudder to think what would happen to the $300,000 per episode salaries of those poor actors. They might have to settle for a normal wage. :lol:

Are you sure "they" make money?
I assume you mean the networks *as* networks.

Cause the money off DVD sets goes to the *producers* of the shows, not the networks that broacast them.
Traditionally, the networks have underpaid for the shows and the producers have lost money until they get into syndication, which often required a wait of several years.
Now, they can make money right away through DVD boxed sets.
And the networks see none of that.
Now, in the cases where the parent company of the network also owns the show, then yes, they make money off that. But in the inhouse book-keeping the money shows up on the production side, not the network. For example, over at Disney, the profits from LOST and Desperate housewives DVD sales don't show up as ABC profit, they show up on the production side.

The thing the media companies need to learn is that people *will* pay (reasonable prices) for content on *their* terms. And those terms mean watching when they want and the *option* of watching the content without having to deal with commercial interruptions.

The sooner they realize this and the sooner they move to a publishing model for content distribuition the better off they'll be in the long run. Cause the scheduled broadcast model is fraying on them day by day...

[Jason Dunn]

Cause the money off DVD sets goes to the *producers* of the shows, not the networks that broacast them.

Ah, interesting. I don't know much about how the TV industry works, so I didn't realize that. So the networks are just transmission pipes.

[Felix Torres]

Cause the money off DVD sets goes to the *producers* of the shows, not the networks that broacast them.

Ah, interesting. I don't know much about how the TV industry works, so I didn't realize that. So the networks are just transmission pipes.

uh-huh.
Their main competition are actually the cable companies, not the cable channels (they actually own most of them themselves!).

In fact, for years and years they were forbidden from *owning* the shows they broadcast. (This was relaxed somewhat after cable became the dominant form of TV viewing in the US.)
The networks, as networks, are strictly an advertising/distribution operation. The News and Sports divisions are usually book-kept as separate profit-and-loss centers, too. Which is why News is usually a loss-leader and sports a profit center.

Of course, the networks are all parts of monster media companies that include inhouse program production operations but it is not unusual for Viacom shows to show up on a channel other than CBS or for an independent production house (like Atlantis, from your neck of the woods) to strongly dominate a network's schedule (with the CSI-family, in this case).

This does *not* automatically apply to cable channels, though. They have always been allowed to own the shows they carry and while they are always open to outside productions, given a choice, they will always go for an inhouse show.

[ctmagnus]

Commercials = work time!

"Ok, it's a commercial - two minutes to work on the report that's due tomorrow."

[Damion Chaplin]

Maybe I'm missing something, but how is this issue any different that fast-forwarding through commercials on our VCR? I mean, we've been able to skip the commercials for many many years now. Is it just because now we can start watching a program 15 minutes into it and skip the commercials so that by the time the program is over you're at live TV?

If not, then I don't see any difference between skipping the commercials from last night's show using your DVR and using your VCR...

In fact, it used to be even worse than it was. I used to cut the commercials live while I was recording it to VHS (using pause and play) so that when I watched it in the future it would be commercial-free. I can't do that with a DVR. They should be happy that the 3 subsequent times that I watch a certain program I have to skip the commercials each and every time. At least I'm seeing that McDonalds logo at all, even if it does zip by at three times normal speed...

Maybe they should just start releasing commercials that are 3 times as long and three times as slow so that when we fast-forward through them, we see them at normal speed. :wink:

[Felix Torres]

Maybe they should just start releasing commercials that are 3 times as long and three times as slow so that when we fast-forward through them, we see them at normal speed. :wink:

TiVo does figured out how to do pretty much that; ads that pop-up while you fast-forward through commercials.

Death, taxes, and commercials? :cry:

[Jason Eaton]

...And with a full season running about a $1.50 per episode, the price is hardly outrageous and actually works out to about the same as a rented movie on a time basis...

Those folks simply need to work out a new business model, fast!

So what if businesses came up with a way to download video of popular shows right into a Media Center or PVR? No commercials, and to play nice with current broadcast tech came out only one day after instead of the end of a whole season? Using a $1.50 to $2.00 model they can probably cover the cost of no ad's for the producer of the show and it becomes a win win situation for both consumer and business.

I mean paraphrasing the responses here... that sounds an awful lot like what Apple is doing with the iTunes shows. The only caveate here is that the video quality (VCR instead of DVD) is too reduced for some tastes but for an egg with out a chicken I think it is a decent start.

[ale_ers]

True, Apple figured out a way to get the money for the TV show.

Should I feel guilty for doing that for the past few years with my Media Center and PMC? I usually watch a show that I've recorded on my PMC on a plane and zip through the commercials. I get it the next day for free...all I have to do is press the 30 sec. skip.

Will we eventually see cable TV prices go up? If they can't supplement their shows with advertising will they just increase the subscription costs? HBO seems to make some pretty good shows (Soprano's, Sex and the City...) without commercials.

[sojourner753]

I think that with the advent of PVRs and commercial skip, we'll see an increase in product placement within TV shows. Just like we see in Movies.

I'd like to see the PVR software/device that will hide the fact that Superman (or was it Colonel Zod) was thrown into a Coca-Cola sign high above Metropolis. :lol:

[Felix Torres]

I mean paraphrasing the responses here... that sounds an awful lot like what Apple is doing with the iTunes shows. The only caveate here is that the video quality (VCR instead of DVD) is too reduced for some tastes but for an egg with out a chicken I think it is a decent start.

Apple and CinemaNow and Disney and MovieLink and (eventually) NetFlix and Blockbusters.

As you say; its a matter of quality and delivery vehicle.

A buck an episode for DVD quality on permanent archival media (DVD) that can play anywhere vs a buck a pop for VHS quality that is locked to a single brand of player with a postage stamp screen.
Same idea, very different expression, no?

And yes, it would be a decent start; ten years ago.
Even five years ago.
Nowadays those of us that have been around the block once or twice have seen better...

[Jason Eaton]

Same idea, very different expression, no?

And yes, it would be a decent start; ten years ago.
Even five years ago.
Nowadays those of us that have been around the block once or twice have seen better...

Don't get me wrong, I don't think where it stands now is the best thing sliced bread or anything. But the rub here is that there is nothing else like it. Around the block, or whatever, I currently don't see another company offering TV shows without commericals over the net in a legal fashion.

If the offering isn't for you that is fine, feel free to pass on it and go back to using... well nothing, but the point is these things have to start somewhere. On topic, Apple is a legal company offering a paradim shift from commerical based broadcasting. Not a boast or a company line... just a fact. The others you mentioned are movie based companies that by majority of their product don't deal with commercials (though the amount of ads at the begining of a movie these days is annoying too)

:shrugs:

Almost forgot, your not reduced to just one device with a postage stamp screen. You can play them on your iPod video, your computer monitor, or even push them out to your tv... which in most cases is bigger then a stamp.

[alanjrobertson]

Most of the TV I watch is on the BBC, so no ads anyway :D Whenever I do watch the main commercial channels I do tend to skip the ads though with my PVR. To compensate for this I think there may be rise in product placement in programmes (Truman-show style!) to try and compensate (although in the UK at least this is very strictly regulated so there would need to be serious changes made to broadcasting regs to permit this happening).

[ux4484]

Wow...is it not hypocritical that you would prefer folks not to browse your sites using ad blockers, yet loathe commercials so?


BTW...great job on getting a sponser to provide free mobile "thoughts" forums to the masses...maybe TV should take a cue from you guys.