Home > screeNZ News > TiVo: watching network ad revenue skipping away?

TiVo: watching network ad revenue skipping away?

The government plans to spend $4 million on TV advertising for a power-saving campaign that will run for a year. The campaign will screen across the free-to-air networks at the same time, three days a week. No doubt they got good rates for a campaign of this size, especially in the current economic climate, and for viewers there’ll be no avoiding it. Or will there?

New Zealanders haven’t really got the hang of time-shifting yet as, except for the good old days of recording programmes on VHS, the devices have arrived here much more slowly than they have in other countries.

However, with the arrival of MySky, My Freeview and the launch of TiVo, it becomes a more realistic option. Looking ahead to the time when the devices are much more common, what are the implications for the ad-driven networks? Should they be worried? Well, yes they should, according to TiVo in the US.

Americans have been using this technology much longer than the rest of us, and some interesting figures on time-shifting have come out following the Emmy awards earlier this week. It’s likely that Kiwis will replicate the American experience. Over time we have acquired, or had thrust upon us, most other US habits (good and bad) when it comes to our relationship with the good old gogglebox.

In the US, an average of 68% of TiVo users timeshift comedy programming and 75% timeshift drama programming. Kiwis won’t get the ability of the US version of TiVo to dispense with advertising altogether when timeshifting programmes, but we will get the ability to fast forward through them.

Those sorts of numbers “avoiding” watching adverts doesn’t help the networks much, who rely on advertising spend for a substantial amount of their revenue. The value of ads is diminished; advertisers don’t want to pay as much to reach smaller numbers of eyeballs. (Having said that, they don’t seem inclined to pay more at the moment either, even though they’re reaching higher viewer numbers than ever.)

The story doesn’t get better. Prime time ads cost advertisers more, because they get in front of more viewers. But in America, with very few exceptions, even more viewers than average are timeshifting ‘the best’ primetime programming, and ad-skipping in the process.

ABC, dipping into the bucket of common sense rarely found in network television, has started adding a chyron (named for the company that produces the graphics management software) on its own promotions.

It features the network logo, name of the show and premiere date and time at the very top of the screen. Because the text appears over a solid black bar, viewers can still clearly read the name of the show and premiere info, even if the video images below it are whizzing by at 8 times normal speed.

Of the 28 programmes nominated for Primetime Emmy awards in the outstanding programme or series categories earlier this week, almost none are timeshifted less than the average for their viewing category. One that isn’t timeshifted much is The Late Show With David Letterman, but it hardly takes a rocket scientist to work out why. It screens late, is topical, and loses its currency within 24 hours.

The most timeshifted dramas in the US, according to TiVo’s research, were Emmy winner Mad Men (timeshifted 85% of the time) and Dexter (87%), against a category average of 75%.

A Bernstein Research report released this weekThe government plans to spend $4 million on TV advertising for a power-saving campaign that will run for a year. The campaign will screen across the free-to-air networks at the same time, three days a week. No doubt they got good rates for a campaign of this size, especially in the current economic climate, and for viewers there’ll be no avoiding it. Or will there?

New Zealanders haven’t really got the hang of time-shifting yet as, except for the good old days of recording programmes on VHS, the devices have arrived here much more slowly than they have in other countries.

However, with the arrival of MySky, My Freeview and the launch of TiVo, it becomes a more realistic option. Looking ahead to the time when the devices are much more common, what are the implications for the ad-driven networks? Should they be worried? Well, yes they should, according to TiVo in the US.

Americans have been using this technology much longer than the rest of us, and some interesting figures on time-shifting have come out following the Emmy awards earlier this week. It’s likely that Kiwis will replicate the American experience. Over time we have acquired, or had thrust upon us, most other US habits (good and bad) when it comes to our relationship with the good old gogglebox.

In the US, an average of 68% of TiVo users timeshift comedy programming and 75% timeshift drama programming. Kiwis won’t get the ability of the US version of TiVo to dispense with advertising altogether when timeshifting programmes, but we will get the ability to fast forward through them.

Those sorts of numbers “avoiding” watching adverts doesn’t help the networks much, who rely on advertising spend for a substantial amount of their revenue. The value of ads is diminished; advertisers don’t want to pay as much to reach smaller numbers of eyeballs. (Having said that, they don’t seem inclined to pay more at the moment either, even though they’re reaching higher viewer numbers than ever.)

The story doesn’t get better. Prime time ads cost advertisers more, because they get in front of more viewers. But in America, with very few exceptions, even more viewers than average are timeshifting ‘the best’ primetime programming, and ad-skipping in the process.

ABC, dipping into the bucket of common sense rarely found in network television, has started adding a chyron (named for the company that produces the graphics management software) on its own promotions.

It features the network logo, name of the show and premiere date and time at the very top of the screen. Because the text appears over a solid black bar, viewers can still clearly read the name of the show and premiere info, even if the video images below it are whizzing by at 8 times normal speed.

Of the 28 programmes nominated for Primetime Emmy awards in the outstanding programme or series categories earlier this week, almost none are timeshifted less than the average for their viewing category. One that isn’t timeshifted much is The Late Show With David Letterman, but it hardly takes a rocket scientist to work out why. It screens late, is topical, and loses its currency within 24 hours.

The most timeshifted dramas in the US, according to TiVo’s research, were Emmy winner Mad Men (timeshifted 85% of the time) and Dexter (87%), against a category average of 75%.

A Bernstein Research report released this week in the US warns that Digital Video Recorders (DVR) penetration “is approaching 50% among the wealthiest, best-educated households in America.” Again, this is not good news for the advertisers targeting more affluent consumers, and therefore not good news for channels broadcasting to that demographic, which would be Tv One here.

Sky’s CEO John Fellet welcomes TiVo, believing that NZ is big enough for both companies to thrive. Heartened by the crack in the dam of ISP data caps that TiVo’s arrival brings with it, he believes that broadband is the future of all content delivery.

Sky’s MySky box offers the same timeshifting capabilities as TiVo’s offering, but Sky’s business model is subscription- rather than ad-driven.

So, is the government’s $4 million TVC campaign good value? In the sense that it aims to achieve savings for New Zealanders of $320 million, of course it is. In the sense that it comes at a time when networks are struggling to generate advertising revenue, it’s welcome.

For the networks, it might be a bit of a poisoned chalice. The campaign is substantial enough to track its impact over the course of a year. If viewing habits change (the Americans would say ‘mature’) over that time as people embrace the capabilities of the timeshifting technology, the networks might find advertisers less willing to spend the amounts the networks need to generate.

The Beehive announcement of the ad campaign is here. in the US warns that Digital Video Recorders (DVR) penetration “is approaching 50% among the wealthiest, best-educated households in America.” Again, this is not good news for the advertisers targeting more affluent consumers, and therefore not good news for channels broadcasting to that demographic, which would be Tv One here.

Sky’s CEO John Fellet welcomes TiVo, believing that NZ is big enough for both companies to thrive in. Heartened by the crack in the dam of ISP data caps that TiVo’s arrival brings with it, he believes that broadband is the future of all content delivery.

Sky’s MySky box offers the same timeshifting capabilities as TiVo’s offering, but Sky’s business model is subscription- rather than ad-driven.

So, is the government’s $4 million TVC campaign good value? In the sense that it aims to achieve savings for New Zealanders of $320 million, of course it is. In the sense that it comes at a time when networks are struggling to generate advertising revenue, it’s welcome.

For the networks, it might be a bit of a poisoned chalice. The campaign is substantial enough to track its impact over the course of a year. If viewing habits change (the Americans would say ‘mature’) over that time as people embrace the capabilities of the timeshifting technology, the networks might find advertisers less willing to spend the amounts the networks need to generate.

The Beehive announcement of the ad campaign is here.

You may also like
TiVo: NZ first to get on-demand service
Sony joins the TiVo party
TiVo: for almost a grand, you can feel the love