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Are PVRs the Enemy?

While the personal video recorder (PVR) has sometimes been portrayed as television advertising's pop-up blockers, a recent research report says that a TiVo is every home won't necessarily hurt advertisers, so long as they adjust to the new medium. The study, completed by market researcher C Cubed and The Dowden Center for Emerging Media Research, found a vast majority of owners of PVRs, which allow a viewer to easily fast-forward through commercials, still watch some TV ads. The catch is they're a lot pickier about which ones they view.

In a survey of 322 households with a PVR, such as TiVo or ReplayTV, C Cubed found that only 21 percent said they never watched commercials. Nine percent said they frequently watched commercials and 68 percent reported occasionally watching ads. Of those that chose to watch commercials, 74 percent said it was because they found them entertaining.

"The biggest thing about this is PVRs aren't making advertising less effective," said Jennifer Choate, President C Cubed. "Advertising has been decreasing in its effectiveness already."

Advertisers and the networks aren't too keen on shouldering the blame, however. Last November, the owners of a host of major networks and movie studios filed a lawsuit against ReplayTV maker SONICblue, claiming its automatic ad-skipping feature was the same as theft.

The research stands in stark contrast to the findings in July of CNW Market Research, which reported 71 percent of PVR owners fast-forwarded through primetime network TV ads.

A surprising 35 percent of C Cubed respondents said they were "very likely" to take suggestions to go to the Internet for further information and 23 percent were willing to take incentives to view advertising.

Choate said the responses, particularly the large percentage looking for a "two-screen experience" with a PC, showed advertising opportunities in an evolving "a direct response environment."

This finding is backed up by the apparent success this summer of a TiVo "Austin Powers Goldmember" promotion, which relied on interactive ads to draw in viewers. Two-thirds of viewers were hooked, interacting with the ads for an impressive average of six minutes. Also this summer, TiVo and Lieberman Research Worldwide signed a deal to create a panel of TiVo users to test product and promotional ideas.

Despite the anecdotal evidence, Choate remains pessimistic that TV advertising will rush to abandon its commitment to the 30-and 60-second advertisement during a two minute and two second commercial break. Eventually, she said, the industry must find new models to deal with PVRs' slow but inexorable expansion.

"Eventually, these dollars will be replaced in this interactive space," she said.

More than likely, however, any reaction from advertisers and their agencies will only follow the arrival of a truly mass market for PVRs. According to research completed in August by London-based media researcher Screen Digest, the PVR is poised to be a central part of average American TV room -- eventually. Screen Digest pegs the number of households currently with PVRs at 1 million, predicting that will grow to 15 million by 2006, accounting for about 14 percent of all U.S. households.

But until PVR penetration reaches double digits, Choate does not expect advertisers will begin to pressure their marketers to find alternatives.

"Agencies want to keep it the same old way as long as possible," she predicted.