Over the weekend, I wrote a post about how product placement and alternative forms of marketing will become more important, partly because technology will make it easier to skip over ads. A New York Appeals Court ruling this morning increases that threat significantly.
The case centers around Cablevision’s wish to offer its consumers DVR functionality (including ad-skipping features) at the network, or ‘cloud’ level, as opposed to solely on individual set-top boxes. An initial court ruling agreed with content owners who charged that the feature amounted to copyright infringement, but the appeals court overturned the decision, saying basically that a network DVR is nothing more than ‘a DVR with a long cord.’
A story on Barron’s Online notes that Bernstein Research analyst Craig Moffett believes if the decision sticks (another appeal is likely), DVR penetration could rise from 25% levels to more than 60% in a very short time, and with more DVR-enabled outlets per home.
The article goes on: “Moffett contends the media companies should have settled the case by agreeing to network DVRs in return for a commitment to block ad skipping. ‘By failing to settle,” he writes, “the media companies now face the bleak prospect of a massive increase in ad-skipping.’”
I already zone out or change channels when ads come on TV and Radio.
I had an interesting debate with a FM radio ad salesman one afternoon. He chastised me for not listening to the radio spots since it kept the programming I liked on the air. I reminded him that the style of music I liked was on many other stations in our area so he couldn’t assume to have a monopoly of my time. In other words, he had to come up with a better reason to keep me from hitting another preset. He couldn’t.
I explained that Talk Radio had the best think going for them. Syndicated radio takes it’s breaks at the same time. There is no advantage for me to change channels because I’m annoyed with the ads. So I sit there and listen to that format when I have to.
Interesting point. Radio ads i find are some of the worst ones out there – loud and obnoxious, and rarely relevant… but i think at least a fair number of listeners are too lazy or too distracted to change the station when the ads come on. and you’re right – with the syndicated shows, they’re all running ads at the same time anyway.
Product placement is actually quite effective in radio – some of the best ads are when talent like howard stern or rush get paid to promote a product during their show – often it’s integrated into the content and even when it’s separate, it’s often tough to tell it’s advertising until it’s too late!
But the main threat to terrestrial radio nowadays is satellite, which is another example of people listening to content on their own time and having so many options that it makes it tough for advertisers to get heard.
Agreed on product placement. That is something that is returning to TV as well. I would assume the advent of TiVo has forced a return to this practice.
As for satellite, no experience there. Since my wife bought me a iPod Nano, my radio consumptions, music or syndicated shows, has been moved to stored mp3′s or podcasts. I love the fact that on my radio show podcasts they remove the commercials to avoid complications with additional costs. It make host product placements all the more effective, in my mind.
Great posts, keep up the great work.