Jupiter's forecast is erring on the side of caution, according to Card; it doesn't cut TV much slack. "We advise media planners not to cave in to TV and Nielsen's talk about new live-plus ratings. If stuff is time-shifted, a lot of the ads will definitely be skipped." He was careful to note that the $12 billion loss figure is a worst-case scenario. It was calculated by combining recent data on DVR subscription rates with surveys of American households when asked how often they skipped commercials.
Card also said the estimate assumed widespread disillusionment with TV advertising over the next five years due to ad-skipping--an outcome, he notes, that is far from certain.
The Jupiter forecast is "somewhat conservative," in Card's words, but no one denies that DVR date impacts TV. Last fall, network executives disseminated research showing that DVR homes watch 12 percent more television--but a more recent study from Mediamark Research (MRI) showed that adults in DVR homes watch less television than those without the devices. Specifically, they are 23 percent less likely to be heavy television viewers than the general population.
In July, TiVo added more fuel to the fire, announcing a program to provide advertisers with second-by-second tracking of DVR viewership--providing a gauge to determine whether ads are skipped, in part or in full. In a sign of TV executives' concern about DVR use, Mike Shaw, ABC's president of advertising sales, suggested disabling the fast-forward button on DVRs to prevent people from skipping ads.
Of course, $5 billion of revenue from new platforms is "nothing to sneeze at," Card conceded--but "when you look at the overall TV industry, you realize that $5 billion is a small piece of that." Overall, Card said, new digital platforms won't generate big revenue streams for established players. They are likely to be more effective as simple promotional channels: "You should definitely experiment with the new platforms, but also realize that a lot of it is experimental."
As for shoring up TV revenue, Card was optimistic about new strategies to counter ad-skipping, including targeted ads delivered via digital cable, sponsored shows and product placement.