Replay Networks, TiVo Planning Big Ad Efforts

Video Equipment Makers That Strip Ads Ready for Holiday Push
WASHINGTON, D.C.–Flush with cash from major broadcast investors, makers of digital video recorders that allow viewers to strip out commercials are planning fall campaigns for the holiday shopping season.
Replay Networks will dedicate a large portion of the $57 million it recently received from Time Warner, The Walt Disney Co., NBC and others toward a campaign that will include TV from USWeb/CKS, Portland, Ore.
TiVo, which gained $32.5 million from CBS, Disney, Discovery Communications and others earlier this month, is developing two TV spots with Campbell-Ewald, Los Angeles.
“Certainly one of the priorities with the investments we got was earmarked for marketing,” said TiVo representative Rebecca Baer.
The broadcast companies have invested in so-called personal video recorders in order to influence how such machines will affect the future of their business. That explains why, at the same time as investing in PVRs, those companies have also formed a coalition to oppose one of the machines’ principal functions–the removal of ads from programming. That function would make TV commercials a much less attractive option for advertisers and media buyers.
CBS, Discover, Disney, Time Warner and News Corp.’s coalition–The Advanced Television Copyright Coalition–argues that it is illegal to alter material (such as programming and its ads) without the permission of the owner. The coalition wants PVR makers to acquire copyrights to its material [Adweek, Aug. 16].
“Obviously, the technology is or may well change the way we do advertising over the long run,” said Bert Carp, a Time Warner attorney who represents the coalition. Carp said broadcasters are negotiating with PVR companies for licensing agreements.
Forrester Research predicts that PVR owners will spend six hours a month watching ad-free premium channels and will skip the ads in most other programming. It recommends that agencies work with media providers to embed promotional messages directly in the shows themselves, so that the viewer is forced to watch them.
However, Bob Igiel, president of the broadcast division of Young & Rubicam’s The Media Edge, said PVRs pose little threat because there will always be an audience for commercials that advertise quality products. He said his shop is already working on strategies to cope with the changing technology.