When it debuted in 1999, TiVo revolutionized the TV experience by wresting control of screen time from advertisers, allowing viewers to record shows and skip commercials. TiVo's slogan said it all: "TV your way."
Behind the scenes, though, TiVo was courting advertisers, selling inroads to a universe most customers saw as commercial-free. The result is a groundbreaking new business strategy, developed with more than 30 of the nation's largest advertisers, that in key ways circumvents the very technology that made TiVo famous.
For The Record
Los Angeles Times Friday November 19, 2004 Home Edition Main News Part A Page 2 National Desk 1 inches; 53 words Type of Material: Correction
TiVo cost -- An article Wednesday in Section A about increased advertising on TiVo paraphrased Davina Kent, TiVo's advertising and research sales manager, as saying that increased advertising revenue probably will bring down the subscription price to consumers. Kent said the cost of advertising itself would go down, not the cost of subscriptions.
By March, TiVo viewers will see "billboards," or small logos, popping up over TV commercials as they fast-forward through them, offering contest entries, giveaways or links to other ads. If a viewer "opts in" to the ad, their contact information will be downloaded to that advertiser -- exclusively and by permission only -- so even more direct marketing can take place.
By late 2005, TiVo expects to roll out "couch commerce," a system that enables viewers to purchase products and participate in surveys using their remote controls.
Perhaps even more significant is TiVo's new role in market research. As viewers watch, TiVo records their collective habits -- second by second -- and sells that information to advertisers and networks. (It was TiVo that quantified the effect of Janet Jackson's Super Bowl "wardrobe malfunction," reporting a 180% increase in the number of replays reported by viewers.)
For advertisers it's an extraordinary boon, a quicker and more effective way than they've ever had of measuring the effects of their TV commercials.
For viewers, TiVo's new strategy means the technology famously christened "God's machine" by Federal Communications Commission Chairman Michael K. Powell is rapidly becoming a marketer's best friend, proving that try as they might, consumers cannot hide from marketing.
"TiVo looked like it was going to be the weapon of mass destruction of Madison Avenue," says Robert Thompson, Syracuse University professor of television and pop culture. "However, we knew that the [TV] spot ad would not go gently into the night, and this is the next battle strategy."
The shift underscores what industry observers have been saying since TiVo started -- that TV advertising and programming must change dramatically to survive.
