On-demand revolution and the threat to TV advertising

In the USA, 6% of the population has a DVR and users watch 60% of the TV shows recorded, in which they skip 92% of the commercials in recorded programmes.

These issues were discussed by a panel at MIPTV in Cannes, which included Josh Bernoff of Forrester Research, who presented findings on DVR's.

Consumers, when asked how they would like to enhance or improve their television viewing experience, put ad skipping at the top of the list. This was followed by video-on-demand and the ability to pause live broadcasts. Although these seem like a "wish list", they are a reality, not just in the USA, but also in South Africa.

It's a world where TV commercials are becoming optional.

It's also the end of the TV schedule as viewers time-shift record and watch programs when convenient, and when they do watch, they skip the commercials. Consumers are taking control of the TV experience and although they might not be techno savvy, current DVR's make the process very easy, making it a technology for everybody.

When consumers where asked in the research about their DVR's, many said that they "had a love for their DVR" which certainly is an unhealthy relationship to have with a machine, but it makes their lives easier and they simply can't see life without it. From a MIPTV perspective, in the past years, Video On Demand and Personal Video Recorders (PVR), used to be in a small tent outside the venue - now it is a keynote talk which simply indicates the importance of the technology to producers and to brands as they try to counter the effect of technology on traditional advertising models.

The adoption of the technology is inevitable, especially with a younger audience more in-tune with technology. This places traditional TV ads under siege and requires very efficient buying of ad messages. Ad agencies need fresh understanding of the technology.

It's not linear television, making the creative more important now than ever before. While it does allow brands to reach smaller audiences, it doesn't fit the traditional advertising business as it is a different audience where the same program can now be watched over numerous viewing platforms like broadcast, broadband, DVD, mobile or VOD. Many brands are turning to their agencies for answers and if the ad agency isn't up to speed with the technology and the opportunities presented, the relationship certainly needs to be re-evaluated.

There is no doubt that the 30-second ad is still very powerful, but there are now far more opportunities for one-on-one ads which are more targeted. Interactive ads or interacting with a brand through technology is growing rapidly where the brand interaction is far more experiential.

Ad agencies are perhaps the most vulnerable in the new technology world. They need to understand new distribution platforms and how consumers interact with content. It's an exciting, interactive and multiple multi-media future with great opportunities for brands. Concepts and ideas need to be developed around the various technologies, using the best of what they have to offer.