Smart marketers embrace personal video recorders

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After two years of blithe ignorance, the television and advertising industries are finally waking up to personal video recorders.

Waking up screaming.

With their delayed recognition that PVR penetration is getting deeper, senior executives at networks and entertainment companies are using lawsuits to attempt to block a technology that demonstrably turns the television into the versatile home entertainment center it was always meant to be. A similar endeavor effectively shut down another transformative, consumer-friendly entertainment technology, Napster, despite copious evidence that demand-driven systems are the only way to lift the music business from its trough.

PVRs allow consumers to seamlessly record television programming, pause live TV, create channels personalized to their interests, and eliminate commercials, if they desire. Among the novel legal theories bandied about in the current battle against PVRs are that consumers have a contractual obligation to watch commercials and that it is illegal to store copies of favorite programs for personal use.

No, I'm not kidding. Consider what Jamie Kellner, the otherwise visionary head of AOL Time Warner's television unit , told Cable World a few weeks back. Skipping ads, he said, is "theft. Your contract with the network when you get the show is you're going to watch the spots." His solution: "a new model that charges them for that programming."

Up next: chaining you to the sofa.

The contention that collecting TV programs violates copyright law is contained in a lawsuit filed by several networks and studios against Replay TV and its owner, SonicBlue. The Replay PVR has the largest capacity on the market right now, with more than 300 hours. That irks the plaintiffs. "Defendants orchestrate and arrange for the creation of massive, unauthorized collections of theatrical films and other copyrighted television programs," their complaint alleges. Such large collections keep consumers from watching new programs and ads, and paying for pay cable and DVDs. "This unlawful scheme ... undermines all of the methods of compensating plaintiffs for the exploitation of their copyrighted works," the lawsuit contends.

Better burn your CD collection, kiddo: Every time you spin a disk, you're not buying a new CD.

This is serious foolishness. The way to get people to pay for new entertainment is good entertainment. The solution to consumers weary of advertising is better advertising.

Yet, while some in the infotainment megaplex are battling to stop PVRs, others are finally embracing reality. As Ad Age and The New York Times reported recently, several marketers, from small fry like RealNetworks to giants such as Pepsi, have entered into arrangements to expose their goods via TiVo, which, with some 420,000 subscribers, is the largest PVR purveyor. They understand that audience fragmentation is rendering traditional advertising formats, notably the 30-second spot, ineffective, requiring marketers to experiment with new formats and delivery systems.

More significant, there is dissension within the infotainment fraternity-even within individual companies. Absent from the suit against Replay was Sony-which last week issued a lengthy promo for the movie "Mr. Deeds" on TiVo.

And while AOL Time Warner's Mr. Kellner may consider PVRs theft, his company's cable division is in the process of releasing set-top boxes with PVRs built into them. n

Randall Rothenberg, an author and longtime journalist, is chief marketing officer at consultancy Booz Allen Hamilton.

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