Personal video recorders should worry the big media firms

[van_gogh]

According to The Economist ( http://www.economist.com/business/displayStory.cfm?story_id=2598890 ), PVRs may eventually lead to increased cable/satellite subscriber rates (over and above the VOD fees). The theory is that content providers will earn less from advertisers since fewer customers are watching their ads, and those reduced revenues will result in increased costs to cable/satellite providers for programming, who in turn will pass these costs on to subscribers. It goes on to say that D* is leading the charge to get PVRs in everyone's hands - - which, considering FOX is a major content provider as well, is a bit contradictory.

Of course there is another option. Would you be willing to have your 30-second skip funtion disabled in order to ensure lower monthly rates?

[BobMurdoch]

The vast majority of TV watchers are lummoxes who take whatever the TV channels force feed to them. We are the technical intelligentsia who figure out ways to get around that to "maximize our utility" as my old Economics professor used to like to say.

Until PVR hits 30% of the market of ALL TV watchers, a few TV execs will preach gloom and doom (and blame their mismanagement, poor programming choices, or falling ad revenues due to competition from other media, video games, and the internet on PVRs), but real change won't happen.

Remember when the VCR was ALSO supposed to kill the networks because people could fast forward past the commercials. Ditto for the remote control, as ADD-esque viewers were supposed to be flipping channels like crazy.

To create a Yogi-ism.... things stay the same, until they aren't anymore..... Let's see the ad industry dry up and blow away... it just isn't going to happen. They WILL get more creative and start working ads into the programs, but they aren't going to kill free TV just yet....

[FTA Michael]

I think that losing viewers of commercials may lead to lower ad rates, which may in turn lead to reduced revenues for cable/satellite networks and OTA broadcasters.

But that does not necessarily lead to higher cable/satellite prices, which are set by the competitive marketplace. For example, ESPN doesn't charge what it does because it needs $X of revenue; it charges as much as it can to maximize revenue and profits.

Advertisers will still want to reach their markets, so DVRs could simply shift where ad dollars are spent. Maybe more money for OTA channels vs. cable/DBS, because a higher percentage of OTA viewers don't have timeshifting equipment? Maybe more money for live events, which viewers are less likely to record to watch? Maybe more money for product placement and other "innovative" in-show advertising techniques?

[Randy_B]

The natural evolution of technology always elicit such hand wringing.

[amit5roy5]

I just hope channels won't add ad bars to the bottom of the screen.

[Mike Richardson]

I just hope channels won't add ad bars to the bottom of the screen.

Then we would have new boxes to block them out :)