• by Jim Meskauskas , November 7, 2002

By far, the best trade press word-byte of the week had to have been the headline of an article in AdAge on Monday.

“More US Homes Have Outhouses Than TiVos.”

I’d been thinking about the PVR space for a couple of weeks and was hard pressed to come up with a way of demonstrating the size of the PVR audience that would make it clear to the advertising community that, though TiVo and its ilk are worthy of our study, they are hardly the extant threat the advertising media and those interests it represents would have us believe.

Turns out that there are only around half-a-million TiVos in U.S. households. There are approximately 671,000 homes with outhouses. Now, this isn’t to say it is appropriate to compare one form of “technology” that has been on the wane for 100 years to another technology that is on the wax. But it really does help to demonstrate why there may not be that much to fear just yet from this fancy technology.

I think there are a number of reasons why the advertising industry doesn’t have to start building bomb shelters just yet in the face of TiVo, all of which explain why it is that PVR technology is still so much less than ubiquitous.

1. Still too cost prohibitive.
2. Until bundled with digital cable set-top boxes, the matter of box-overload is an issue
3. Most consumers are lazy, and setting up their PVRs to be used to maximum benefit, and this means less commercial zapping than pundits and professional worrywarts fear.

There is no need to worry TODAY about PVRs interfering with advertising and its ability to attract the attention of the potential consumer. There are far BIGGER problems that are more fundamental for the industry to be worrying about before they start expending vast quantities of time and money wringing their hands about PVRs.

Certainly, if you are a forward-thinking agency, you need to know as much about this technology as possible because it WILL one day be a force. And if you have daring clients willing to let you use their money to experiment with new media, it would be beneficial to start learning about how the technology works and in what ways it will influence viewing habits. But I think most general market advertisers should be worrying more about things like maintaining relevance, producing creative that sells product, and creating comprehensive communications packages to reach an ever more fractious universe through the use of intelligent media planning rather than worrying about whether or not 500K active TiVo users zap out a bad beer commercial.

The most interesting thing that TiVo and its ilk have to offer the consumer is something first introduced to me in a chance conversation with Joseph Jaffe, a media consultant and former director of Interactive Media for TBWA/ChiatDay. It is the idea of time compression.

Assuming that there are approximately 8 minutes of ads to every ½ hour of programming, then in the course of 3 hours of Primetime television programming, you, the viewer, are exposed to about 48 minutes of advertising (including programming lead-in and lead-out).

Well, if you started your TiVo running at 8pm, but started watching at 8:45pm, you could still finish watching all the desired primetime programming you want at the same time as anyone watching straight through, commercials and all.

You’ve basically ‘resurrected’ 45 additional minutes of life (though it could be argued that you’ve murdered 2 hours and 45 minutes of life by watching Primetime programming in the first place!). Think of what could be done with those additional 45 minutes NOT spent sitting in front of the tube.

Be that as it may, there is still the reality of the marketplace.

It’s chances of being THE gift of the year, like DVD players were last year are pretty small. First of all, last year we had the events of 9/11 that created the conditions for “cocooning” at home and seeking entertainment there rather than out. Secondly, the PVR devices are simply too expensive at $349.

Also, don’t for get the cost of subscription. Unless what you are also giving as a gift is the subscription to TiVo services, then you've just given a gift that costs the recipient money, either every month or in one lump sum (if said recipient wants to buy the product-lifetime subscription ($249)).

I don't know a lot of people that are representative of a mass audience that can afford to do that in the first weeks after Christmas. When PVRs are under $200, then the device itself will start to move some, but there is still the matter of the subscription fee, which is a real psychological barrier. If it weren't, wouldn't broadband now be all things to all people?

Oh, and let’s not forget box overload. I’ve got a digital cable box, a DVD player, and the brain for my Bose home theater system… Another box near my TV, and I’m going to have to move into a bigger apartment. Not to mention the ump-teen remote controls all these technologies signify.

Among other things, adoption of TiVo-like utilities will require making the utility transparent, bundled with existing household television technology.

And last but certainly not least, TiVo has a value proposition that is not being very well articulated. When someone tells me, "TiVo is great! I can zap commercials." I reply, "That's what they said about VCRs, too!"

But that wasn't what sold VCRs. Program recording and Movies sold VCRs, not zapping commercials. The wrong message is getting out there.

I sort of feel like TiVo enthusiasm is the same as Apple computer enthusiasm. Those that have them are enthralled by them and are insistent that it is THE only way to live... but more practical considerations about how it is the average person uses technology ultimately rules, and Apple ends up still under 10% of the desktop market and my mom still has "12:00 AM" in LCD green flashing on her VCR.