The Wall Street Journal is running an interesting article covering advertising in a digital video world… go check it out and get back to me. Oh, and do you think the author is aware you can turn off TiVo sound effects?

WSJ says: There is no denying that a major transformation in television-viewing habits is under way. But rather than diminish the role of advertising in the industry, the shift is likely to push both television executives and advertisers to find new ways of marketing to consumers. Currently, there are about 3.6 million TiVos in the marketplace. While sales growth of the brand-name devices is starting to slow, other DVRs (which unlike TiVo make no noise when they skip over ads) are taking off. According to consulting firm Kagan Research, the number of U.S. consumers with a DVR will go from 1.8 million in 2004 to 4.5 million in at the end of this year, a 150% jump.

Business Week’s 10/17/05 article “Hey, Advertisers, TiVo Is Your Friend” obviously caught my eye. David Kiley spotlights “ad guru” Rishad Tobaccowala and the inevitability of advertisers finding us in the “new-media” era. I can only hope, as we move forward, that the Comcasts and TiVos of the world will advocate for consumers and strike a reasonable balance that allows them to rake in the advertising bucks without spamming us into oblivion.

Business Week says: His advice? Adapt to consumers’ changing behavior rather than try to cling to the status quo. People’s preference for consuming content when they want it will only grow, he says. He predicts 30% of U.S. homes will have DVRs in less than two years. Pair this preference for on-demand content with the ability to search for video on Google or Yahoo, download it over speedy broadband links, and zip it to the living room TV, and traditional TV schedules will be rendered meaningless.

And advertisers will have much more information they can use to target particular viewers. Rather than knowing simply what percentage of 18- to 25-year-olds watch Desperate Housewives, they’ll be able to figure out which people watch, how frequently, and what they’ve been searching for recently on the Net. Advertising can become more science and less art.

Over the past 2 1/2 years, Tobaccowala has urged clients, including BMW and Coca-Cola, to cut deals with TiVo and cable companies to create more compelling and targeted messages. GM tried experimental ads on Comcast Corp.’s video-on-demand ser-vice in Philadelphia last year. Each month 10,000 people chose to view GM’s one- to two-minute ads featuring test-driving segments and in-depth vehicle profiles. Next year, GM plans to roll out slicker ads for most of its vehicles on three more cable systems. “On-demand is going to explode, and we need to be ready for that,” says Jack Bowen, GM’s general manager for customer relationship marketing.

As Michael Buffer once said, “Let’s get ready to rumble!” DirecTV will begin pushing their own DVR next week with no guarantees, though certainly more leverage, of extending their contract with Tivo past 2007. Features of the forthcoming R15 DVR were previously disclosed on TV Predictions.

New York Times says: DIRECTV, the satellite television operator, is introducing a $30 million advertising campaign on Monday to promote its highly anticipated digital video recorder.

The campaign, created by the New York office of BBDO Worldwide, is DirecTV’s first widespread public effort to distance itself from TiVo. Of DirecTV’s 14.7 million customers, 2.3 million now subscribe to TiVo. DirecTV, which pays TiVo a monthly fee of $1.13 per TiVo subscriber, hopes those users will switch to its own service.

DirecTV’s standard DVR, originally set to be released this past June, will be introduced in late October, and another model featuring high-definition service will be introduced in mid-2006. The standard DVR will feature up to 100 hours of recordable space, compared with TiVo’s 70 hours.

DirecTV will continue to support the TiVo service without marketing it, and both services will be priced at $5.99 a month. The company’s current contract with TiVo is set to expire in early 2007. DirecTV has not said if it will continue the contract after that.

(more…)

Tivo continues their trend of interesting promotions. Next week they’re hosting a long-overdue funeral for the VCR in New York City. By contributing a video cassette to the casket, you’ll be rewarded with a free Tivo (and a one year service commitment).

Tivo says: As the curtain rises on one of the country’s ultimate consumer technology and entertainment shows, Digital Life, TiVo will bring down the curtain on the VCR. In a ceremony celebrating the demise of the VCR as a household necessity and commemorating the passing of this venerable, but clunky analog technology, TiVo will encourage consumers to trade in a VCR tape for a free TiVo(R) box. The event will feature a mock funeral, including an eulogy, witness speakers sharing their personal memories of the VCR and a casket overflowing with VHS tapes.

TiVo will give away hundreds of its pioneering DVR boxes while supplies last as VCR replacements to every consumer who joins in the commemoration of the VCR’s passing by “Tossing a Tape” in the commemorative casket carrying a VCR with a venerable flashing 12:00 and activating TiVo service on their free TiVo box at the “Passing of the VCR” event.

The positive buzz surrounding Tivo is leading to some strange marketing synergies. The recent iRiver PMC deal makes sense as an option for watching Tivo To Go, but the JCPenny Dockers promotion is way out in left field.

Dockers says: Buy $100 of Dockers Men’s Qualifying Apparel and/or Accessories Between September 25th and September 28th, 2005 and Receive a Free TiVo Series2 40-Hour DVR and 3 Months of Free Service.

And I thought this month couldn’t get any worse for Tivo… First they’re hammered with bad press due to Macrovision DRM. That was followed by Metron, the company handling Tivo’s phone and web orders, folding last Friday. Little did we know Tivo had a television and web advertising campaign beginning this week.

Sadly, Tivo is still unable to receive web or phone orders. They did list a new phone number, though I received a message stating the line is out of service. 1-877-BUY-TIVO has an updated recording indicating they plan to reopen for business 9/26.

Tivo says: Sorry, but we’re unable to take your order online at this time. Please order by phone now: Call 1-800-698-3530