TiVo Offers On-Demand Content and Commercials

TiVo recently announced it’s teaming up with Web-video startup Brightcove to bring Brightcove partner content to subscribers’ TiVo boxes. It’s yet another step in TiVo’s drive to bring broadband content to subscribers.

About the same time, TiVo also announced it will allow subscribers to view commercials on demand via its Product Watch service. Subscribers will be able to browse a list of commercials in the Product Watch category, select the one they want, then view it on their TV sets.

How does this affect you as a Web marketer? The answer may be a lot more relevant (and a lot more related to what you’re already doing) than you think.

Based on traffic numbers reported by video site YouTube for videos tagged “commercials,” people clearly do watch commercials on demand when given the opportunity and presented with spots that have enough entertainment value to stand on their own. Given the amount of viral content out there we watch on a regular basis, people will watch commercial stuff if they can get a chuckle out of it. And with the explosion of video on the Web, marketers are now gaining an increasingly viable channel on which they can deliver their messages.

Marketers need to care about this, especially if we’re also relying on offline methods to get messages across. A recent JupiterResearch study suggests ad-skipping could cost networks $8 billion this year. Other estimates place that number as high as $27 billion over the next five years. Sounds like a lot, but frankly I believe it: there’s plenty of evidence that PVR (define) owners consistently skip commercials and will continue to do so.

But let’s get back to the Web for a minute. The fastest growing (and, arguably, most effective) form of online advertising is search, a fact most of us are aware of. Google’s dominated the space for a while now, but new efforts from Yahoo and Microsoft may soon begin to close that gap.

Search engine marketing works because it’s consumer-driven. Consumers actually seem to welcome search advertising because it’s relevant to what they’re already looking for. Rather than unwilling recipients, search advertising often helps them, leading to better results for advertiser and consumer alike.

In many ways, on-demand Web video and commercials offered by TiVo have a lot in common with search advertising. Both continue the trend in user-directed, on-demand content that’s been coming into its own over the past few years. But what’s really exciting is these new forms of convergence break down the wall between computer and TV, offering consumers a more TV-like experience with content they previously had to view on their computers. As the Web becomes a more popular channel for delivering video content and users become more willing to view content on their computers, being able to cross that last gap and get back to watching video on their TVs will drive further use.

People don’t prefer watching TV on computers. What we have now is merely a stopgap until convergence is more ubiquitous. It really doesn’t matter how viable TiVo is as a company, this kind of functionality ain’t going away.

Merging online content with TV viewing and dealing with consumers’ demands for on-demand content (entertainment or commercials) will require us to make changes in how we market. We must start looking at unbundled advertising. We must start thinking of commercials as objects people choose to view rather than are forced to view. We must start understanding how to build greater synergy between what we do online and what we do on TV, and how they work together (such as the new campaign “Lost” has embarked on). We must counsel clients on how they must change their expectations as they occur. All of this may be on the bleeding edge now, but we have every reason to believe it’ll be mainstream tomorrow.

Join us for our Online Video Advertising Forum in New York City, June 16, 2006.

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