DVR marketers say their technology lets consumers watch what they want, when they want; they argue it is a more engaging way of watching TV.
DVR set-top boxes, enabled with powerful software, allow consumers to personalize and tailor their TV viewing. DVR users can digitally record and store favorite shows and movies, skip ahead in programming and pause live TV. The skip-ahead feature sends shudders through TV network boardrooms.
But Stacy Jolna, VP-chief programming officer at TiVo Entertainment Group, a prominent player in the DVR field, explains: "The message to the networks is maximize your promotions through TiVo. To advertisers, it is target a high-end demographic audience of affluent, well-educated urban males who comprise an early adopter, enthusiast audience for TiVo."
HERE COMES ULTIMATETV
TiVo and ReplayTV may be the most familiar names in DVRs, but established marketing giants are poised to enter the fray. UltimateTV from Microsoft Corp. was to be available nationally in February, with ad support planned via FCB Worldwide, San Francisco. Also this year, AOL Time Warner is expected to partner with TiVo to deliver a more sophisticated version of its AOLTV Internet television product.
DVRs have sent marketers, agencies, and TV networks and programmers scrambling to devise new ways to keep viewers from skimming over their ad messages. The goal is to create forms of advertising and promotion targeted to viewers' preferences.
NBC and other networks are exploring ways to make their programming interactive, both in first-run and syndication. For example, a network could offer a special package of syndicated programming enabled especially for DVRs and weave interactive promotions into the bundle.
NETS BUYING IN
The major broadcast networks have become equity investors in TiVo and Replay, which also have alliances with a host of technology companies that provide the software and back-end infrastructure to support the DVR systems. In addition, the DVR companies have relationships with cable operators, satellite TV services, consumer electronics marketers and agency holding companies.
NBC promotes TV programs on both Replay and TiVo. NBC has been working to develop interactive TV programming concepts since 1996 through its Enhanced Broadcast Group using platforms by Wink Communications and Microsoft's WebTV.
For Wink- and WebTV-enabled set-tops, NBC currently offers 400 hours of enhanced TV viewing. Viewers, through the remote control, can access detailed sports statistics or take a quiz associated with "The Tonight Show With Jay Leno."
"Like other broadcasters, we were interested in kind of being a part of these new developments and in taking a role in creating what the future of television will be," says Carla Sinatra, VP-business development for NBC Digital Media.
VIEWING THE MODEL
"We're going to have to see how those models develop. At this point, we're looking at a small number of [set-top boxes] ... the interesting thing now is to see how consumers react. I'm not sure anyone is sure how the model is going to play out," Ms. Sinatra says.
Nearly everyone in the industry believes the DVR market won't reach critical mass until cable and satellite TV operators help deploy DVRs or DVR-like services. DVRs recently completed their second holiday sales cycle at retail. At press time, the sales data were not available, but Forrester Research projects more than 1 million DVRs will be in homes by yearend.
"I think convergence is obviously something that's happening," says Bob Igiel, president of the broadcast division of Young & Rubicam's Media Edge, New York. "The question really becomes what devices find real use in the consumers' eyes and translate to real service, real information, real usefulness in their lives."
STORAGE TO BECOME CRITICAL
"Once you have real broadband deployment, the real advantages become in the customer/viewer being able to store a lot of programming, being able to select what they want to watch when they want to watch it. That's the Holy Grail of the interactive experience," Mr. Igiel says.
DVR marketers assert the opportunities are endless. TiVo is aggressively ramping up charter advertiser programs to sign major marketers to its service. It inked a deal last fall with Omnicom Group, New York, in which the agency holding company's clients will have the ability to test new interactive ad concepts.
Mr. Jolna says his company will showcase new programming and additional agreements with networks and cable companies at NATPE.
Replay, which has shifted from a direct-to-consumer business model to a software licenser, also will be at NATPE and working aggressively with cable operators.
"We still believe that personal TV will revolutionize the way advertising works on TV," says Steve Shannon, Replay VP-marketing. "We'll see the need to work closely with advertisers to create the right infrastructure ... You'll see more personal TV services, and there will be ad inventory associated with all of those."