TiVo's Ad-Friendly Claim Doesn't Sway Top Researchers

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Is TiVo, the personal video recorder that allows viewers to skip by commercials actually "advertising-friendly?" Yes, according to Marty Yudkovitz, the former NBC Internet and cable executive recently appointed president of TiVo Inc. At least that is the pitch he is bringing to advertisers in a series of meetings with Madison Avenue executives, who have doubts about PVRs. Serious doubts.

Early viewing patterns within the universe of TiVo users would suggest that Yudkovitz's view isn't finding believers. According to research conducted by CBS, roughly 40% of the prime time viewing within TiVo households is done via playback. And within that "TiVoed" programming, 70% of the commercials are skipped.

David Poltrack, executive vice president, research and planning, CBS, says TiVo has indicated that its own internal research, based on actual usage, is largely in line with the CBS research, which is based on Internet surveys.

Yudkovitz canceled an interview with B ROADCASTING & C ABLE last week, and TiVo has yet to release the specifics of its research or the methodology it uses.

Two weeks ago, as part of its "we're ad-friendly" campaign, TiVo announced a partnership with Chrysler to promote its new Crossfire. Using several interactive entry points, TiVo says, users can view video clips, schedule a Speedvision show featuring the car, and request a CD-ROM providing its specs.

Yudkovitz in the press release says that Chrysler is "ahead of the curve in leveraging the powerful lead-generation and entertainment-content-delivery features" of TiVo "to build a deeper brand dialogue with this exciting new vehicle."

But, with TiVo at about 1% penetration of the U.S. household base, the carmaker is way, way ahead of the curve. Like five years or more ahead.

Poltrack and others say TiVo as a standalone product is a failure. "It's basically been rejected by the population and is never going to get any significant penetration over time," he said.

Roy Rothstein, senior vice president, programming, at Zenith Media, says the low penetration is a sign that viewers have rejected the pricing model of both a fee for the machine and a monthly subscription fee.

The machine itself is problematic, adds Rothstein, a videophile who has more gadgets than your basic consumer. It may just be one machine too many for the average consumer household to handle.

On the other hand, TiVo users say the PVR changes their lives, if for no other reason than "remembering" shows they want to see.

"They made it unclear what the thing did," says Tim Brooks, executive vice president, Lifetime.

As for being ad-friendly, in the interactive-TV sense of the term, Brooks says of TiVo, "I hope they've done their research, because you really need to bring something that people are asking for. ... When they hear of it they say, 'Gee, that's really neat! I'd love to have that.' Like high-speed access or something. Just bringing them technology for technology's sake isn't going to sell people."

If TiVo does gain significant penetration, it's going to be with packages sold through cable and satellite services, like EchoStar and DirecTV, where some of the company's existing penetration already comes from.

According to Poltrack's calculations, even if TiVo reached 30%-40% penetration in the next five years, that would result in lost commercial exposure of around 10%. Significant? Yes. A medium killer? Not hardly.

And, if it does catch on, both Brooks and Poltrack say, critical mass is at least five years away. Even then, they believe it won't be the death knell of commercial television as some fear. For one thing, they say, early-adapter zapping patterns very likely won't hold; most people just don't care enough to take action to zap the spots. "We are
couch potatoes," Brooks says.

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