Impact of DVR use on TV Advertising

Years ago, the RIAA said that when Napster and other P2P sharing sites became popular, they were going to destroy the industry because the public would no longer be required to purchase music.  Obviously this didn't happen.  There are a number of reasons why.  Obviously, enforcing copyright laws was a factor, but in the end if people want something bad enough, they aren't going to let a little think like legalities get in the way.  The industry recognized that the status quo wasn't going to suffice and adapted. They partnered with reputable companies to offer legal methods of downloading music with the highest sound quality for a reasonable price and users flocked to it.  Now Apple has become the Pied Piper of the tech world, in no small part because of iTunes and the iPod.

Recently, in a presentation to advertisers, the chairman of NBC, Ted Harbert, made a rather poignant statement about Dish Network's "ad-hop" feature to skip commercials ("Media Decoder", NYTimes.com), "This is an insult to our joint investment in programming, and I'm against it." Not exactly doomsday talk, necessarily, but "insult" is a bit dramatic.  We live in a technology age. DVR usage is only going to continue to rise.  Every cable and satellite provider heavily promotes their various DVR services.  DVR in any room.  DVR accessible over the Internet via your smart phone.  Skipping commercials might not be the primary reason that people will choose to use their DVR, or to purchase a DVR if they don't already have one, but no one will deny that we all do that when we do use it.  The industry will adapt, however, just like the record industry did.  We're already seeing it in our programming now where the network will self promote their other shows down in the corner during programming, making it impossible to skip.  It's only a matter of time before they start selling that space to advertisers. Sports broadcasters are doing creative things with digitally adding content to the playing field viewing area on television. This can also be used as marketable ad space.

His comments are typical of the old-school "stuffed shirt" mentality of many media executives. Certainly he has to speak to his audience, and being that he was talking to advertisers, I suppose he has to walk that line. But the reality is the advertisers dollars aren't going to go away, and neither are DVR users. Come on into the technology pool, Mr. Harbert...the water is warm.