RESOURCES · E-NEWSLETTERS · THINK · FEBRUARY 2006
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TV VIEWING OPTIONS MAKE LOCATING AN AUDIENCE MORE CHALLENGINGIn simpler times, an advertiser could place television ads on top shows on ABC, NBC and CBS and be assured that the majority of the American public would have a seat on the family couch at the assigned show time and view the ad message. This ability to easily capture the viewing public became fragmented with the expansion of cable. Eyeballs were even more difficult to capture with the explosion of the Internet and other electronic gadgets that take potential viewers away from the TV. Today, additional challenges for the traditional TV advertiser are leading quickly to an environment of shiftable media. Currently, despite a fragmented viewership with many viewing options, most consumer viewing is dictated by the listings in the TV Guide. True, some folks tape shows on their VCR and watch them later. But this is cumbersome and is not often used. Several new developments are gaining critical mass that will allow viewers to watch when they want and even where they want. Most troubling, it is increasingly simple to forward through commercial messages. And, in the case of the Video iPod, consumers can download commercial-free versions of their favorite TV shows! This change in viewing habits is upon us. By 2010, viewers in 76.4 million homes will be able to watch shows when they want and zip through ads, up substantially from 12.5 million in 2005, Morgan Stanley projects. This is a further challenge to traditional TV advertisers who have watched the TV viewing audience erode through the years. While network TV currently continues to offer the broadest potential advertising audience, this hold on the market is being seriously challenged. DVR (Digital Video Recorder)Whether it's TiVo (which has become ubiquitous to this technology) or a DVR option through your cable system, a growing segment of the TV viewing audience is seamlessly taping its favorite shows and watching TV on its own schedule. And, yes, most are skipping through the commercials. Some shows seem to be less impacted by technology. Water cooler shows such as Survivor and American Idol are more likely to be watched as they air (inclusive of commercials) because viewers want to know the results as they occur. TiVo has methods to further your relationship with consumers outside the commercial venue. Advertisers can purchase long-form space on the TiVo menu, which is often used by movie studios to promote upcoming films. TiVo also offers opportunities to gather information from viewers as they interact with ads and information by requesting more from advertisers. VOD (Video on Demand)The networks are finalizing details to bring commercial-free prime time shows to VOD platforms as early as first quarter 2006. This next step in viewing has become more urgent, with networks vying to come up with new revenue streams as the cost of producing scripted shows continues to soar. NBC plans to launch the service through satellite operator DirecTV, charging 99 cents per show download. CBS will provide its VOD service through Comcast's digital cable system (price TBD). ABC has partnered with Apple to let viewers download commercial-free prime time shows for $1.99 onto iTunes for play on an iPod (additional information below). The VOD version will be available after the regularly scheduled broadcast already has run. Typically, the programs will be available a few hours after they initially air until the next new episode airs. Given the breadth of free viewing options and the many homes that have TiVo and the like, there is some question whether people will pay to watch prime time shows on demand. However, if enough high profile programs sign on, it could result in a significant change in viewing habits and may have an impact on ratings. Video iPodThis version of the iPod will allow users to simply and quickly browse, purchase and store video content. This includes top TV shows such as Lost and Desperate Housewives. At a cost of $1.99, you can download the latest show onto your iPod and view it anywhere, resulting in mobile TV content. Consumers are no longer hindered by the location of their television sets. The video screen provides surprisingly high resolution to deliver a positive TV viewing experience, albeit on an extremely small screen (2.5 inches). As the networks will gain revenue from the sale of this content, they are likely to provide these shows in a commercial-free format. (ABC has already agreed to do so.) This is certainly an issue for advertisers who will lose this portion of an audience when buying a prime time spot in one of these shows. Look for opportunities to sponsor content to solve this problem. What to do?Solutions will, of course, need to be developed based on each advertiser's product and marketing needs. However, there are some basic strategies of attack:
While all of this technology is still in its infancy, we can be sure that the long-term impact will be big and will need to be addressed by television advertisers as they lose even more of the TV audience. While it will take some time for these technologies to reach enough consumers to have a major impact, it will be here before we know it. Now is the time to consider strategies for this reality. As writer William Gibson once said, "The future is already here. It's just not very evenly distributed yet." |
