Hollywood Feud Offers Peek at DVR Doomsday

Just Like TiVo, Strike Is Forcing Marketers to Look Beyond Scripted Shows

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BATAVIA, Ohio (AdAge.com) -- Could the writers strike foreshadow life without advertiser support for scripted TV programs?

A media world without scripted programming -- something more likely as the strike drags on -- may start to look a lot like the coming world of heavy DVR penetration that could render ads on scripted TV shows largely powerless. If the strike forces advertisers to shift their focus to live and reality programming, it will effectively lift the curtain on a future in which live events command the biggest ad bucks and dramas and sitcoms lose much of their cachet. After all, if advertisers find effective ways to market without those scripted shows -- today or tomorrow -- some may never come back.

Dramas and comedies, the programs most affected by the strike, are the programs most vulnerable to time shifting and ad skipping by DVR users, according to research by TiVo and Information Resources Inc., which have been jointly tracking the behavior of households using DVRs for the past three years.

What to watch?
Scripted shows on the five leading broadcast networks are the most heavily time-shifted -- and their ads skipped -- both because they're most popular and because they're less time-sensitive than programming such as sports and news, said Todd Juenger, TiVo VP-general manager of audience research and measurement. The question, he said, is: Will consumers watch less TV as the well of scripted shows dries up or just different TV? "Will there be less time shifting? Or will people just time-shift different shows?" If people watch less TV overall as a result of the strike, advertisers will try to follow them wherever they go, he said. But if they just watch different programming, such as cable, advertisers won't have to travel far.

A consortium of mostly package-goods marketers has been studying how to handle heavy DVR penetration for nearly three years. Some have been testing how to market without relying on ads lost to time shifting, but an IRI spokesman declined to comment on whether they've found a solution yet.

To be sure, it's no cinch DVR doomsday will ever come. Estimates of household penetration are still 15% to 20%, and Nielsen commercial ratings have shown unimpressive 2% to 3% audience losses due to time-shifting technology, said media consultant Erwin Ephron.

He added that the TV market has proved remarkably resilient, with advertisers responding to higher TV rates over the years largely by ponying up bigger TV budgets. The same could occur should those dollars be funneled into more-expensive sports and other timely programming.

The strike may even improve the TV experience, he said. If an inventory crunch forces advertisers to pay more money to run ads fewer times on higher-rated shows, viewers won't keep seeing the same spots.

The TV industry may be well positioned to dig in its heels as it prepares to enjoy the windfall of a contentious and well-funded 2008 election cycle, which PQ Media last week estimated will pump $4.5 billion into the industry's coffers.

Even so, the networks and the striking writers may want to ponder the long-term impact of the Screen Actor's Guild strike in 2000. MRA, a Cincinnati-based production consulting firm that works for 15 of the 100 leading national advertisers, said commercial production shifted largely outside the U.S. for years following that strike. The work didn't begin to return until the past year or so, said MRA President Fran Furtner.
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