Responding to DVR: The Next Phase for Broadcast Television

Advertisement supported broadcasting was introduced in the early 1920s with AT&T’s “toll broadcasting” for radio. It was the solution the industry had been looking for, offering the ability to support the new enterprise while still providing programming free to the public. Today, television broadcasting networks, such as ABC and CBS, are still supported by advertisements. So when TiVo’s digital video recorder (DVR), as shown to the right, was introduced at the turn of the 21st century, a panic struck the television industry. The ability to fast forward through commercials was seen as a threat to the infrastructure of network television. Today, the number of DVR users continues to expand, with an expected 65 million by 2010 according to Frank Ahrens' Washington Post article. As a result, advertisers and networks are becoming creative in adapting to the new technology. Though DVR was once considered a threat, changing technologies and new advertising solutions may actually prove more beneficial for all parties involved: the advertisers, the networks and their viewers.

Nielsen Media Research presented promising research results for network television in August 2006, according to Ahrens. After its first year of including DVR users in its extensive research, Nielsen Media Research found that 77 percent of shows recorded on DVR were network programs. Even more promising, Millward Brown marketing researchers found that 43 percent of DVR owners recalled specific brands from commercials they had seen, while only 42 percent of non-DVR owners could recall the brands. Normal commercial breaks are not as effective as advertisers may think. Viewers often go to the bathroom or tune the commercials out. It is believed that DVR owners may actually be paying more attention to commercials while fast forwarding than they otherwise would because they do not wish to miss their program.

Advertisers have begun using this to their advantage. Companies, such as Honda, have created five second commercial spots that air at the end of a commercial break, according to Laura Petrecca’s USA Today article. Marketers are trying to take advantage of many digital video recorders, such as TiVo, that rewind a few seconds after the viewer stops fast forwarding. Another creative solution, introduced in Ahrens’ article, is what advertisers are calling “logo bursts.” Advertisers are making commercials that keep the company logo up much longer so that it will still be apparent in fast forward and are also attempting to make more visually appealing commercials.

However, the new concept introduced by ABC last April seems most revolutionary for television. The network started streaming their most popular television shows for free online with fast forward proof commercial spots. This new idea offers the same benefits as DVR, allowing viewers to watch at their leisure and catch episodes of several different shows, all accessible through the World Wide Web. This new technology also opens the network up to a large amount of new viewers (people without televisions, cable and/or DVR) and seems to have a future with the new tech-savvy, on-the-go, iPod generation. After ABC’s trial stage last spring, the other major broadcasting networks followed suit in fall of 2006. According to David Goetzl’s MediaPost Publications’ article, both ABC and NBC sites are averaging almost 10 million unique viewers a month and this number is expected to continue growing.

ABC’s website is leading in online viewers according to Goetzl, with such popular shows as “Lost” and “Desperate Housewives.” Each episode is played through ABC’s specific media player, with the sponsoring company’s logo present at all times. An example of this can be seen with Allstate sponsoring an episode of “Grey’s Anatomy” in the picture above left. The sponsoring company has three 30 second spots, sometimes the same, sometimes different, that play during the program. Unlike DVR, the commercials cannot be fast forwarded, and unlike normal commercial breaks, 30 seconds is not necessarily long enough to go to the bathroom. Viewers may be more likely to actually sit through it. Many of the commercials also offer interactive spots, where the viewer can click on links to seek additional information on the product. Allstate’s commercial spot shown to the right offers a link to their website. Online television obviously offers significant benefits to the advertisers as well.

The DVR scare forced broadcasting networks to think outside the box and seems to have issued in a new generation of television, one where the viewer is in control. Online streaming of popular television shows is the perfect marriage between advertisers and consumers, while still opening up the industry to thousands of possibilities. Television will continue to change and improve with time and instead of fighting new technology, the industry is wise to embrace and manipulate it to their advantage.