'Big Bang' Rattles TV Business, Pace Of New Technology Accelerates

Describing the expansion of new consumer media technologies as a sort of "big bang," a new report from a well-regarded researcher suggests that the pace of change may have become greater than the TV industry can readily adapt to. If the report strikes an alarmist note, it's not one that can be easily dismissed as the sensationalistic view of a one-shot study, but is the culmination of 24 years of semi-annual research on proliferation of household media technologies. What's changed, says David Tice, vice president of Knowledge Networks/SRI and author of the report, is the pace of change.

That's evident from some of the data points (see table below) contained in the just-released Spring 2004 edition of KN/SRI's Home Technology Monitor, a telephone survey of thousands of consumers, which the company has been conducting twice a year since 1980.

While no single technology stands out yet as a transforming development, the report suggests that the rapid acceleration of a combination of new technologies, ranging from digital video recorders (DVR) to digital cable or satellite penetration to broadband and wireless Internet access, collectively are changing the nature of media in the average U.S. household. And it's no longer just early adopters, says Tice, noting that it is now "transforming the media use habits of mainstream consumers."

Perhaps most importantly for marketers and ad agencies is that unlike new media options of the past, which created new opportunities for delivering advertising messages, many of the newest gadgets are giving consumers greater control over their media content, including advertising. Tice says the impact is being compounded by the fact that many of these technologies are not currently reflected in Nielsen's TV audience measurement system, which biases "technically difficult" households.

"This is troubling news," says Tice, "because these consumers are disproportionately affluent and heavy users of media."

Nielsen has already announced plans to begin addressing part of that problem next year, when it will begin incorporating DVR households into its national and local TV ratings samples.

Meanwhile, the KN/SRI report paints a portrait of a TV universe under siege from new technologies that no traditional researcher may ever be able to keep apace of.

Home Technology Penetration Levels*

Digital Digital HDTV/ DVD
DVRs Satellite Cable DTV Sets Player
Spring '00 0.3% 9.0% NA 0.5% 6.0%
Fall '00 0.4% 13.0% 11.0% 1.1% 8.0%
Spring '01 0.8% 14.0% 10.0% 1.8% 16.0%
Fall '01 0.6% 15.0% 12.0% 1.5% 17.0%
Spring '02 1.2% 17.0% 16.0% 2.1% 31.0%
Fall '02 1.3% 17.0% 17.0% 3.2% 33.0%
Spring '03 1.3% 19.0% 15.0% 4.2% 47.0%
Fall '03 1.9% 19.0% 16.0% 4.4% 49.0%
Spring '04 3.6% 21.0% 18.0% 5.9% 56.0%

Knowledge Networks/SRI 2004 Ownership and Trend Report from the Home Technology Monitor. Spring 2004 base = 2,472 telephone interviews conducted between February and April 2004. *U.S. households.