Cable, Sponsors Must Adapt to DVDs, DVRs

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Boston -- Cable-network, MSO, advertiser and agency executives need to learn
to adapt as technologies like video-on-demand and digital-video recorders
explode.

So said speakers during the panel, 'Advertising and Marketing in a Changing
Digital World' at the Cable & Telecommunications Association for Marketing's
CTAM Summit here Tuesday afternoon.

Moderator Josh Bernoff, principal analyst for Forrester Research Inc., set
the stage by estimating that the 4 million households now able to get VOD and
the 1 million DVR homes would surge five years hence to 36 million and 46
million, respectively.

SONICblue Inc. CEO Ken Potashner estimated that one-half of all U.S. TV
households will have DVRs within 'three to five years.'

In Bernoff's view, this means, 'The 30-second commercial will never be the
same.'

But Starcom MediaVest Group president Rishad Tobaccowala begged to differ.
'The 30-second commercial is not going to go away,' he said. 'Even in five
years, it's not going to be an all-DVR-driven world.'

Charter Communications Inc. executive vice president David Barford said his
MSO's set-tops with VOD, DVR and home-networking capabilities won't be that
deeply penetrated until the box cost goes under $600.

The panelists felt that advertising won't go away, but to truly reach
consumers in VOD and DVR homes, it will have to become more compelling.

Nielsen Media Research CEO Susan Whiting said the researcher has software on
every TiVo Inc. box.

But questions -- like those involving whether Nielsen should count viewership
at airdate or when a program is played back, and the length of time researchers
should wait for those data to come in -- abound. 'Do we wait a week, two weeks?'
she asked, noting that there's no consensus on that point among networks and ad
buyers.

Meanwhile, Rainbow Media Holdings Inc. CEO Josh Sapan -- whose 'Mag Rack' VOD
package has a commitment from Insight Communications Co. Inc. -- felt that
'there should be on-demand brands' for that space alone, which 'lives only on
the server, not the TV.'

At a subsequent briefing, Sapan said the first Insight launch is due within
30 days, with others to be added 'over a period of years.'

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