Evolution or Extinction for TV Advertising?

The future of TV advertising may be threatened by new technology which enables viewers to forward over commercials, according to the recent Yankee Group report, 'The Death of the 30-Second Commercial'.

The report evaluates the threat posed by personal video recorders (PVRs), which provide a simple means of fast-forwarding over commercials - their penetration is currently low (less than two per cent of US homes have one), but the market may be taking off, according to Adi Kishore, Yankee Group Media & Entertainment Strategies analyst.

'With satellite and cable operators and consumer electronics manufacturers integrating PVR technology into set-top boxes and other devices, we forecast 19.1 million homes will have PVRs by year-end 2006', says Kishore. 'Thus, by 2007, nearly one-fifth of all US homes will be able to fast-forward TV commercials. This subversion of the ad-sponsored TV model will eventually disrupt the entire value chain for television'.

The report analyses the prospects for television advertising, and appraises potential solutions for programmers and advertisers. It predicts that the advertising industry will start to feel the impact of PVRs in mid-to-late 2005 when they are used by 10m subscribers, and stresses that programmers must be alert to this and plan ahead to avoid losing out to other media channels. According to the report, this will give rise to 'a new breed of cross-functional experts' who will mix different products for different television advertising formats. However, the '30-second spot' will remain the most widely used television-advertising format for the next five years.

The Yankee Group's web site is at www.yankeegroup.com

All articles 2006-23 written and edited by Mel Crowther and/or Nick Thomas unless otherwise stated.

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