Commercial-zappers send ad-friendly message

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Personal video recorders have been smeared on Madison Avenue as commercial-zappers. But the makers of the devices have reversed course and now propose to help advertisers and agencies zap in targeted messages.

The shift, not coincidentally, is led by TiVo, a company backed by such traditional, ad-supported media companies as Walt Disney Co., Discovery Networks and CBS.

$84.9 MIL INVESTMENT

But two other major players are just as eager to adopt an ad-friendly stance. ReplayTV -- which in its early days touted a feature that lets TV viewers skip ahead 30 seconds in a program -- recently received an $84.9 million investment from nearly a dozen backers, three of which are advertising holding companies: Grey Global Group, Interpublic Group of Cos. and Omnicom Group.

Jovio, a start-up launched by a group of venture capitalists, allows viewers to choose TV programming options from its Web site. According to information from the site, the service will record shows and skip over broadcast ads if desired, but then insert 60 seconds of advertising it has sold for every 30 minutes of programming.

INSULT TO INJURY

But although PVRs are embracing an ad-supported business model, some advertising executives say the latest plans add insult to injury. That's because a service such as the one touted by Jovio -- which did not return calls for comment -- would still zap ads purchased in specific programs and insert ads sold directly by the PVR marketers.

"[This] violates what we are doing, and it is probably illegal," said Aaron Cohen, national broadcast director at Horizon Media, New York.

Even ad buyers such as Starcom Worldwide, Chicago, one of a number of agencies currently working with TiVo, are cautious. "It's a huge challenge for any media company," said Tim Hanlon, director of emerging contacts at Starcom IP, the Internet buying arm of Starcom, "because you're spending millions of dollars planning and buying for spots and, if they're not going to be seen in the times they are planned for, you're obviously doing a disservice."

TiVo said it will not overlay ads.

"We in no way modify the broadcast stream other than to make it interactive and shift the timing,"said Rebecca Baer, TiVo director of communications.

Stacy Jolna, TiVo's VP-programming and media partnerships, said the company has worked closely with advertisers to find some common ground.

"We've got a list of companies, including broadcasters, advertisers and agencies, that we are working with, developing options," Mr. Jolna said. Procter & Gamble Co. and General Motors Corp. have worked with TiVo in the past.

TiVo will announce the names of charter sponsors next month. Mr. Jolna confirmed one sponsor is iFilm, a digital film Web site.

TiVo also plans to announce several advertising-friendly options for TiVo software next month. One is an ad-switching process in which general market ads in a broadcast can be switched for targeted spots from the same advertiser -- a charter sponsor -- that have been downloaded into a TiVo box.

Another option is to download infomercials that would then be available for viewing if the viewer chose to do so. A third option is to preload product information clips that can be activated by a tagged broadcast spot.

That last option is based on an already existing TiVo service called Ipreview that allows users to click on network promos for upcoming shows to automatically record the shows when they air.

A CONSUMER BACKLASH?

Will those consumers who have purchased a PVR to zap advertising feel betrayed by the new pro-advertising tack? "That remains to be seen," Ms. Baer said. "We can't get around the fact that consumers like TiVo because they can skip through commercials."

The uproar over ad zapping led to the creation last year of the Advanced Television Copy Coalition. Taking a lead from the Federal Communications Commission, which considers TV broadcasts -- from programming through commercials -- to be copyrighted material, the group wants to block the use of PVRs.

"Why do you think they have those little warning notices at the end of shows?" a spokesman at the FCC asked. "All of that material is copyrighted."

A spokesman for the Consumer Electronics Association countered: "We all need to respect copyright protection, but we can't let those concerns impede technological innovation or deny consumers access to the full capability of consumer electronic products."

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