The former NBC exec, now TiVo CEO, says his company’s box is not the enemy. Broadcasters can extend their relationship with viewers with all kinds of additional content that people may want to access via broadband and offer advertising inventory that provides an alternative to a 30-second spot along with better ways to measure the audiences. In short, he claims, it offers more and better ways to create relevance for the local broadcaster.
Friend or foe?
Ever since TiVo launched the era of the digital video recorders 10 years ago, broadcaster have considered the technology a foe — a disruptive technology that viewers can use to zap commercials and undermine their business.
But TiVo now believes it can be a friend.
Making the case in this interview with TVNewsCheck Editor Harry A. Jessell is TiVo CEO Tom Rogers, a one-time NBC executive.
According to Rogers, TiVo has reconceived its DVR as a tool that viewers may use not just to record, pause and playback their favorite shows, but also to manage the countless programs and provide an interface between the large screen and Internet video.
Rather than fearing the DVR, he says, broadcasters should embrace the TiVo box as a way of forging a closer relationship with viewers and promoting their programming. And they can use the viewing data that pours out of the boxes to provide increasingly demanding advertisers with better measures of their audiences.
What broadcasters certainly can’t afford to do is nothing, he says.
An edited transcript:
Is there any reason broadcasters shouldn’t be terribly concerned as the percentage of DVR households continues to grow?
If you just want to watch a program and avoid the commercials, you can. With 30 million DVRs, that’s one level of commercial avoidance. With 60 million DVRs, which most analysts think will be the case in the next few years, that’s probably three-quarters of all the homes that advertisers care about. That’s a real challenge.
But there are two ways to handle that. You can say, geez, I wish that wasn’t the case and let’s try to defeat that world from developing. It reminds me of days at NBC 20 years ago when we were launching CNBC. People at the network said, “What are you doing? Cable, that’s the enemy. You’re going to be undermining our business.” That’s one way to handle it.
The other way to handle it is to say, look, these are forces of consumer choice and consumer control. You can’t just put it back into a bottle. You can join them and be somebody shaping the future in a way that helps your business or you can ostensibly resist and drive your business totally into the ground.
How do you see the television business evolving over the next few years?
More choice has been the trend for the last 25 years. With more independent stations, basic cable, digital cable, satellite, it’s been a constant march of more choice. The ultimate choice is unlimited television — infinite television — where broadcast, cable, satellite, broadband delivery of video all come together in a TV set where anything can be accessed whenever anybody wants it.
[As the pioneer of the DVR], we are acutely aware that the whole notion of control of the of the television experience is going to go beyond recording, that it is going to this anything-you-want, whenever-you-want, infinite, on-demand approach. So, we’ve been working hard to combine all of that into the ultimate experience where the consumer is truly in control.
Are there going to be some winners and losers among the legacy media in this new world?
Well, I’ve been surprised at how quickly that world is coming and how much disruption beyond just the cyclical issues in the economy has been created from just fast forwarding through commercials. I’ve also been surprised by the lack of urgency on the part of the incumbent TV players, especially against the backdrop of the incredible disruption of the newspaper and magazine industries.
I would have thought that the writing on the wall would be so clear that it would have lit a fire under the incumbent television players and caused them to react far more urgently than they have. But, for whatever reasons, they have not.
You know that TVNewsCheck‘s readers are TV stations. What’s your advice on how they can meet the challenges of this world? What should they being doing?
We have a relationship with the leading broadcast network in Australia [Seven Media Group] and the leading broadcast network in New Zealand [Television New Zealand]. It’s interesting to me how the broadcasters in those markets just said, hey, you know what, we’ve got the ability to take this into our hands. Why do we have to be a tiny player within the multichannel, on-demand world where our franchise gets increasingly diluted over time?
They basically looked at the situation and concluded that whoever controls the set-top box in the market controls a lot. They control channel positioning, promotion, the user interface and how broadband content can be prioritized and how additional content can be made available to extend a brand.
They reached out to us and are now distributers of TiVo, using advertising time to drive their package of choice into homes. Instead of that world of broadcasting diminishing, it’s increasing. It’s going quite well. So that’s certainly one way. I’ve pointed that out to some broadcast groups. There’s a hell of an interesting dialogue to have here.
Where would that dialogue begin?
Broadcasters can extend their relationship with viewers with all kinds of additional content that people may want to access via broadband and offer advertising inventory that provides an alternative to a 30-second spot along with better ways to measure the audiences.
On top of all that, TiVo, in its retail form, has two ATSC tuners in it so a local broadcaster can actually do a couple things with that. One, the broadcaster can deliver the HD signal in all its glory as opposed to its compressed form through cable and, second, the broadcaster can make sure its digital channels are next to its main channels rather than on ch. 900 where nobody sees them.
Broadcasters can also be out there with metrics that measure what’s going on second-by-second, similar to the granularity that the Internet presents in terms of click-by-click measurement.
It’s certainly vastly better than the diary entries that have been the technique since the Eisenhower administration with less and less credibility in terms of what they’re really representing by way of viewership.
Be out there defining the experience, creating the forms of inventory that are going to be responsive to this environment with the kind of data that shows what you’re delivering. It’s a different game, but given what the trends are, both cyclical and secular, what better time to introduce something different when the downside risk is so low?
If there are more and better ways to create relevance for the local broadcaster going forward, put them on the table. Let’s talk about them.
Are you suggesting that broadcasters ally with TiVo and then convince viewers to substitute the TiVo box for the cable box?
You wouldn’t really be substituting it for cable in that our box is universal. It’s really the only box you could plug into Comcast in Washington or Time Warner in New York and have it work. So the broadcaster doesn’t have to push out cable. He can make cable a part of his service.
It’s all about defining the consumption experience, the user interface, how things are promoted, what kind of advertising inventory, how you prioritize different forms of content coming through it. It’s the box that controls that experience and the broadcaster could be the one with that most direct relationship to the subscriber as opposed to yielding that to somebody else.
Your Web site suggests that consumers could save $1,000 a year by dumping their cable or satellite service and hooking their TiVo box to a set of rabbit ears and to the Internet.
Because of the economic hard times, there are people who are considering things like that — broadcast and broadband without cable. It’s really not what I see being the most likely or logical viewing experience. It’s far more likely people would say, I want more choice, I want everything.
You’ve mentioned the audience measurement capability of the TiVo box. What are you doing to capitalize on it?
We sell the national data today to both networks and ad agencies. We’re out talking to station groups. Later this summer, we’re going to begin selling that data for a handful of local markets.
You hear two things. Some say if we embrace something else that suggests we’re delivering less audience, then we’re potentially undermining our sales case so they’re paralyzed and they won’t do anything.
Other say, you know what, we have some audience delivery challenges, but at least we have a hell of a case to make in terms of what we’re delivering now and here is how we’re going to create some new forms of inventory and how the impact of these new ad forms are better, more persuasive ways to get to viewers. But you’re not seeing that. You’re seeing a little just too much paralysis.
One of the new ad ideas is a pop-up on the screen when viewers pause a program or try to fast forward through the commercials. People buy DVRs so they can avoid commercials. Don’t such pop ups defeat that?
I wouldn’t quite put it that way. It’s critical to us that consumers have control of their viewing experience and if somebody doesn’t want to watch something, we don’t force them. We don’t interrupt the program to force them to watch something.
If they’ve paused a program and they’re not watching it, words come up on the screen and it says you’re in pause mode, here are some things you can access. It might be a related YouTube video related to the program or it might be an ad that would be relevant to them given the nature of the program they’re watching. It gives you an opportunity to go in and catch an eyeball when people aren’t going to necessarily watch ads that are inserted in shows.
But what we’re not going to force you to watch something. That’s something we very much stay away from.
What should my readers make of the fact that your logo seems to have rabbit ears?
We’ve tried to create something that is very much at the cutting edge of television, but true to the traditions of television. That’s something we actually take very seriously.
There are a lot of commodity DVRs out there that are not thinking at all about a future business model or a way for a TV station broadcaster to participate. If you look at what we’ve done, you know that we’re very much about defining the future of the consumption experience, but also about providing a path for the incumbents of the industry to be active participants in that cutting-edge future. If TiVo’s logo encompasses both thoughts, that’s a good thing.