DVR's effect on advertising revenue

Good morning!

One of my readers inspired me (DJD) to write this blog about the effect on DVRs on advertising revenue and how that "changes the game".

First, let us take a look at some demographics. Currently, there are around 25% of the households in the United States that owns a DVR (source S&P). Another interesting demographic to take a look at would be the most likely programs to be "Tivo'd, etc...

Amobi and James Peters, S&P's advertising and publishing equity analyst, reports that news and sporting events are least likely to be TiVo'd, whereas prime-time dramas and comedies are most likely to "get the TiVo treatment." (source Businessweek.com)

Morning and evening news are increasingly driving broadcasters' profits. I do not like to Tivo sports events because someone will tell me the score or I will inadvertently find the score on the Web. Broadcasters are making conscious attempts to improved programming that is likely to not be "Tivo'd".

I strongly feel that the Tivo effect will be felt negatively in advertising revenues within primetime dramas and comedies. According to S&P, these are the two most likely shows to be "Tivo'd".

One other thing we should examine here is "alternative media" and its effects. As you know alternative media has been aggressively courting advertisers across the nation. Some examples of these would include supermarket video displays, shopping cart advertisements, video kiosks in shopping malls, business publications, trade journals, flyers, and telephone directories. Certainly networks should be concerned with this threat as well.

I had a client tell me that the best advertising he did was on a luggage rotunda rack at the airport.

Most importantly, DVR and alternative media sources pose a serious threat to networks bottom lines and this threat should not be taken lightly!

enjoy your afternoon,

marketmpb