And Another Thing About Those PVRs

If media executives could prevent the spread of those commercial-zapping personal video recorders by just talking about them, they would quickly go the way of the Sony Betamax VCR.

It seems that every media conference over the past five years has devoted some discussion time to the PVR and the threat it does or doesn't pose to the traditional ad-buying process.

Last week's TVB conference was no exception. The consensus seemed to be that, if there is a threat, and it's not clear that there really is one, it's still a way off.

Right now, there's about 2% PVR penetration, with around 250,000 units. As LIN TV Vice President Greg Schmidt noted, "there were more VCRs stolen in the past year than PVRs purchased."

Still, research from PVR maker TiVo shows that users zapped between 70% and 80% of the ads they recorded over the past year.

But Hubbard Broadcasting CEO Stanley Hubbard doesn't see it as much of a threat. "People like commercials," he said, receiving a hearty round of applause from hundreds of TVB attendees.

Fox News Chairman Roger Ailes agreed. "Most of the commercials are better-produced than a lot of the shows."

CBS CEO Leslie Moonves acknowledged that, some day, PVRs "may affect the ballgame." But, if they do, he said, the TV industry "will find different ways to get products into the body of the show."

MindShare Worldwide CEO Irwin Gotlieb said concern over the impact of the PVR is probably overblown. "Let's not get carried away," he said, noting that the remote control, in effect a commercial-zapping device in its own right, has been around for 30 years.

David Poltrack, CBS executive vice president, research and planning, argues that whatever potential threat there may be will be minimal. He calculates that, when PVR penetration reaches 20%, it may translate to a 5% loss in commercial viewing. At 50% penetration, the viewing loss would be 13%; at 75%, 20%. "The 30-second spot is here to stay." And some of the loss could be offset by producing compelling commercials, he said.

Cox Television President Andrew Fisher said, "Nothing is as good or bad as it first seems. There are more outhouses in the U.S. than PVRs. It will be a product on the margins for years to come."

Product placement has been suggested as the primary solution to commercial-zapping. But there's a limit to how many placements will be tolerated by viewers. It's okay for soft drinks, automobiles and a few other products.

"But what about laundry detergent? What about toilet paper?" Gotlieb asked. "There is a limit." Product placement adds to overall commercial clutter, which dilutes the effectiveness of advertising, he said. Programmers can pretty much forget about doing business with competing brands of products that get placed in shows, he added.

Donny Deutsch, founder of the ad agency that bears his name, agreed. He said the industry has to be careful not to overplay the product-placement card. "I think there is a real fine line there. Viewers have a great BS detector, and they do not want to be over-marketed to."

One redeeming value the PVR might offer, suggested ad consultant Erwin Ephron, is its ability to "turn TV into a targeted medium." With the PVR, "people do not surf through 75 channels to see what's on. They pick a selection of channels and tune to those. That means programs can attract specific viewers and not just all viewers that are simply turning to the channel."