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Ernest Miller Ernest Miller pursues research and writing on cyberlaw, intellectual property, and First Amendment issues. Mr. Miller attended the U.S. Naval Academy before attending Yale Law School, where he was president and co-founder of the Law and Technology Society, and founded the technology law and policy news site LawMeme. He is a fellow of the Information Society Project at Yale Law School. Ernest Miller's blog postings can also be found @
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March 26, 2004

TiVo's Quasi-New Extended Commercial Model

Posted by Ernest Miller

A few days ago C|Net News reported that TiVo is planning on rolling out a quasi-new advertising model this fall (TiVo looks to tune in to advertisers). The new system is described thus:

Known as Video-to-Video, the idea is to let viewers click a button on their remote control to immediately watch a 3-minute video describing products and services that might appeal to them. The marketing clips are promoted through small icons that appear on the TV screen as viewers fast-forward past regular ads.

This is a perfect example of TiVo forgetting what made it successful in the first place. Remember those cool, early commercials for TiVo in which a couple of guys charged into a television network's offices and tossed a programming exec out the window? While the commercials might not have been terribly effective (many people still don't "get" TiVo), they did get to the heart of what makes TiVo successful: empowering viewers. With TiVo you no longer had to watch programs when and how the network execs (or advertisers) chose.

The problem with this new advertising system is that it is an attempt to get a limited amount of control back into the hands of the networks and advertisers. Consumers can have neat, new functionality, so long as that functionality suits the corporate interests. Sure, it would be nice to see commercials on TiVo for things tailored to my interests, but that doesn't give me enough control. I want links to content that isn't from the major advertisers. I do like checking out the extended previews for movies I'm interested in and the special preview of the new Ford GT had me drooling, but I also want to see links to some of the absurd stuff coming out of Japan.

Just as it is great to get The Simpsons on Sunday at 8pm, it is much better to watch The Simpsons whenever it is convenient. It may be great to get additional content for some of the commercials the networks want me to see, but it is better to get additional content that I've chosen to be receptive to. Why should I only get the commercials that major broadcasters or TiVo want me to watch?

These restrictions become more obvious as you see the reaction of TiVo's partners:

"TiVo's making money off ads that run over our air space--What's in it for ABC?," said Rick Mandler, ABC's general manager for enhanced television. "We're not going to pass those triggers through without a business relationship in place," he said.

This is precisely why we need to empower viewers. If viewers were truly empowered by this system, TiVo could simply ignore ABC. Once the programming is on TiVo's hard drive, it is no longer ABC's air space and ABC shouldn't have any say over the matter.

What we need is an open standards based system, like something built on RSS. To heck with ABC, people don't want ABC to be making the decisions about the sorts of enhanced content we can get. If ABC won't get out of the way, I'm sure other networks would be willing to take advantage by giving viewers what they want. And if no networks take advantage, then some internet startup will.

If TiVo dies, it will be at least partly due to the fact that they were willing to empower viewers only so much and no more. Having increased viewer expectations substantially, TiVo now wants to throttle such empowerment. Of course, they are doing it in a highly unimaginative way.

The long-term vision for TV advertising invokes a concept known as "telescoping," in which the lines between advertising and programming may blur beyond recognition.
For example, if a viewer is watching "The Apprentice" and likes the new BMW a young executive is driving, he could click on the car with the remote to get an informational video on the car and schedule a test drive with a dealer. He could then go back to watching the show at the exact point where he left off.

Yawn. Ahem. Allow me to clarify. YAWN.

I've been hearing this vision of television "interactivity" from brain dead marketing drones for-seemingly-ever. Yeah, sometimes extended commercials are cool, but if your imagination ends there, pathetic. It is sort of like imagining email and the only use you can think of is opt-in spam. I've got some interesting ideas, such as annotated shows (I'd watch B:tVS with a Buffy fan feed), but my imagination is also limited. Open the standards, let people come up with clever uses. I doubt IM was imagined when the IP protocol was developed. Chances are, many of the bottom up ideas for enhanced television could be commercialized eventually, and not one would have been imagined by a marketroid.

Let 1,000 broadcatching flowers bloom. Broadcatching Now!

There has been a number of other commentaries on this article:

The Slashdot community discussed TiVo's plans and there were actually a number of insightful comments (Tivo Plans Commercials On Demand).

Techdirt provides brief history and analysis (TiVo Still Trying Creative Approaches For Advertising).

PVRblog is, I think overly, concerned about the future if advertising and content blur too much (Tivo advertising)

If we end up with a future such as is described, maybe we will wistfully long for the 20th century, and relatively well-defined lines between advertising and content.

Tadspot's headline is obviously skeptical (Yup, Tivo Is Doomed).

Comments (2) + TrackBacks (0) | Category: Broadcatching/Podcasting | Open Standards | Telecomm


COMMENTS

1. Cypherpunk on March 27, 2004 05:56 PM writes...

I was an early TiVo adopter, got one that first Christmas, back in 99. I loved it, and following a well known investment maxim, bought some stock in the company. TiVo was struggling back then, a brand new company, so I got in for a steal, only $35 a share. Now it's climbed to a princely $8 a share.

It seems that what is missing in your commentary is any sense of TiVo as a business. They have to make money, remember? You complain about these commercial links because they're not "empowering" enough, but TiVo is being paid by the commercial companies to supply this content. They make money off the deal. That makes business sense even if it's not as exciting as you would like.

Empowering consumers doesn't bring in any immediate revenue. In the long run it will contribute to sales, but these are incremental value additions in comparison to the power to time-shift and skip commercials. Being able to download Buffy fan commentary is a proportionately small increase in the value of the box, compared to the revolutionary nature of its basic functionality.

Another problem with most of your other empowerment ideas is that technically TiVo does not have the ability to access the net (at least mine won't, although as I said it is an early model). All it can do is record an hour or so of special broadcast content a few nights a week. And not everybody even gets that; some areas don't receive the channels that TiVo uses for these broadcasts. TiVo can't do all that much with this functionality given these technical limitations.

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2. Ernest Miller on March 27, 2004 08:13 PM writes...

Empowering consumers doesn't bring in any immediate revenue, it is true, but I think you discount the long run potential. TiVo currently dominates the (relatively small) market. The market can and should grow faster. Giving consumers (and non-affiliated commercial vendors) more power, allows many others the possibility of creating value-added service that can substantially increase sales and strengthen the existing TiVo brand.

Sure, Buffy commentary will only attract rabid Buffy fans, but nearly every show has some rabid fans. Sports fanatics would love to get additional content addressed to their interests. That content will be produced and may be the marginal value that encourages people to get a TiVo. I don't think those two examples even scratch the surface of what is possible.

Newer TiVos have network capability.

Finally, eventually TiVo's current business model is doomed. PVRs are going to become commodity goods - video card, hard drive ... not too much that can't be copied there. TiVo will have to figure out someway to make themselves thrive even when everyone is selling PVRs. Creating communities of interest is one possibility to thrive. Right now my only relationship with TiVo is through their box and I'm not particularly loyal. But, what if their box connected me to all my friends (and their interests) as well?

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