Field Reports

Consumer Ability to Skip Ads Could Get Easier

By Jacqueline Renfrow ( jrenfrow@questex.com)

NEW YORK — A recent decision from the U.S. Court of Appeals for New York could make it easier for viewers to skip ads on television, reported AdAge.com.

The court overturned a ruling that had blocked Cablevision — and by extension, other cable providers — from making use of a network DVR that would allow it to run a massive video-storing operation from a single location rather than installing individual DVRs in subscribers’ homes. The technology allows viewers to record programs through remote controls without a special set-top box.

“With the stroke of a pen, the U.S. Court of Appeals has opened the door to a massive increase in the penetration of DVR capabilities,” wrote analyst Craig Moffett of Bernstein Research. “In

short order, effective DVR penetration could now jump to north of 60 percent of cable households (that is, all digital cable subscribers) with an even larger increase in DVR outlets per home.”

At the end of the first quarter, about 26 million homes, 23. 4 percent of all TV households, had DVRs, and nearly 30 percent of digital set-top boxes and DVRs were installed in 2007 with at least one other set-top box already in operation.

As a reaction, advertisers are pushing more and more for a commercial ratings program, which would have them pay for the number of viewers who see their ads, not the TV shows they surround. According to a study of TV consumers in the United States, Europe and Asia, from the Oliver Wyman consulting

firm, 85 percent of DVR owners are skipping at least three-quarters of commercials. However, two-thirds of those viewers are not willing to watch any ads at the beginning of a program in order to watch uninterrupted or pay anything to have commercials completely removed. By the end of 2012, an estimated 37 percent of all TV households will have a DVR.

While there are still more steps before Cablevision can roll out its DVR service, media companies involved with the law suit, such as Turner Broadcasting, 20th Century Fox, CBS, ABC and NBC, plan to appeal. The companies object on the grounds that the storage technology infringes on their exclusive rights to air and reproduce the content in question.