• by David Goetzl  @dgoetzl, July 11, 2006

Time was TiVo was the bogeyman among the broadcast networks - the wicked device that would some day hurt their revenues the way digital cameras did Kodak's. With its ad-zapping facility, the advent of TiVo and generic DVRs posed a serious threat to networks' billions in annual ad bounty. So much so that networks tried various tactics to at least slow the spread of the devices.

In the summer of 2000, CBS refused to air a memorable TiVo ad designed to promote the fact that the device allowed consumers to choose programs they wanted to watch on their time, presumably while also skipping some of the ads. To make the point that the consumer was now in charge, the humorous spot featured goons tossing a network executive out the window. But CBS put the kibosh on it arguing, "It was not a proper representation of how a network operates," according to The Economist. (At other networks that ran the ad, top brass might have thought the concept wasn't such a bad idea for some of their underperformers.)

Today, to be sure, networks still haven't exactly thrown the DVR threat out the window. But they appear to at least be coming to terms with the increased penetration of the devices and the jarring predictions about how many homes could eventually have them. And they appear to be developing ways to work around, or even with, them.

Among their arguments: DVR homes watch 12 percent more television than people living in non-DVR dwellings and, perhaps more importantly, their research shows "58 percent of DVR users pay attention to commercials even while fast-forwarding." So increased viewing via DVRs means more message exposure for advertisers (and potentially more dollars for networks). The network findings were released in November and, of course, their arguments ultimately failed to persuade buyers during 2006-07 upfront ad negotiations to pay for ads that would be viewed in fast-forward mode.

Since then, more evidence has emerged that networks are preparing a strategy for a day when DVRs are rampant. "People like to use DVRs to skip commercials, and we better get smart about how to deal with it," Peter Chernin, President-COO of News Corp., said during an investor conference last month. News Corp. operates the Fox network and a slew of other properties exposed to ad-skipping.

One of Chernin's proposals was to offer advertisers more product placement opportunities, a marketing tactic that's effectively DVR ad-skipping proof. And that, of course, is already in full swing with networks and advertisers increasingly making deals to weave products into storylines or strategically place them in the backgrounds or foregrounds of scenes.

One network is even offering product placement opportunities to, of all marketers, the one-time nemesis: TiVo. On NBC, the device has made appearances in "The Apprentice" last fall and "Last Comic Standing" and "Fear Factor" in recent weeks. (TiVo CEO Tom Rogers is a former top honcho at the peacock network.) So in a delicious irony, TiVo is using NBC for DVR-proof advertising. (NBC, like a slew of other traditional media companies, has an equity stake in TiVo. But any benefit from that play wouldn't come close to offsetting the potential revenue loss from widespread ad-skipping - especially with TiVo's listless stock price.)

In all three product placements/integrations/mentions on NBC, TiVo scored a coup. Take "The Apprentice" episode: The contestants were charged with doing some charity work in a retirement community. And one team decided to usher in a new era of technology for retirees by teaching them how to use the DVR (presumably to record "Price is Right," "Wheel of Fortune" and the evening news - not a major threat to NBC prime time, though the network's median age is on the rise). In that case, TiVo got the benefit of some pro-bono, do-gooder activity.

Then this summer, came "Last Comic Standing," where amateur comedians perform a brief set and try to one-up each other. On the June 13 episode, one of the comics launched into a TiVo bit and began by calling the device an "awesome invention." Not a bad plug - and not censored by NBC. He also launched into some ribbing about what can happen when TiVo's suggestions of programs a user would want to watch are wildly quizzical. The 30-something comedian said he was struck when TiVo suggested he'd like "Touched by an Angel."

"I figured out that TiVo figured out that I like crap," he said, drawing a huge laugh. Most advertising experts say humor works, so good news for TiVo.

On the June 27th episode of "Fear Factor," TiVo received considerable exposure as the prize offered to a team that won some sort of stunt involving spiders. Host Joe Rogan promised the victorious pair two TiVos, with lifetime service, and $20,000 (evaluated and ranked via research firm iTVX as one of the top five most effective product placements last week.) Not only did TiVo benefit from the goodwill associated with a winning team excitedly accepting its prize, but as Rogan announced what was at stake, the recognizable TiVo logo (the TV with the funky rabbit ears) was emblazoned on the screen for a can't-miss 10 seconds.

Still, despite NBC's offering up its branded entertainment inventory to TiVo, the network appeared to be skittish about allowing TiVo to endorse its ad-skipping functionality. As Rogan gave the perfunctory intro about the prize he said, "TiVo records your favorite shows, so you can play them whenever you want. And TiVo is the only digital recorder that allows you to burn programs to DVD."

No mention of ad-zapping. Then again, NBC didn't edit out the DVD-burning capability. Couldn't that promote piracy, another billion-dollar threat?