PVRs: Threat or opportunity?

The results of an online survey of the attitudes of 301 Canadian media and marketing professionals reveal that when it comes to personal video recorders and video-on-demand, unfamiliarity breeds contempt.

The results of an online survey of the attitudes of 301 Canadian media and marketing professionals reveal that when it comes to personal video recorders and video-on-demand, unfamiliarity breeds contempt.

The survey, jointly conducted by the Media Experts iTV Lab and Strategy magazine between Sept. 8 and Oct. 1, 2003, invited Strategy’s readers to sound off on the potential threat or opportunity to advertisers and broadcast networks presented by digital television technologies that enable viewers to time-shift programming and customize their television-viewing experience.

(The respondents identified themselves as advertisers, agency buyers, planners, account reps, or researchers, creatives, media execs, academics, and cable or satellite distributors.)

PERSONAL VIDEO RECORDERS

Forty six per cent (46%) of respondents subscribed to analogue cable. 56.2% of participants had digital TV at home, either via digital cable (35.9%) or direct-to-home satellite (20.3%). 5.6% of those who completed the survey had no TV subscription, receiving their signals via ‘free-to-air’ broadcasting.

Overall, 83.1% of participants indicated they were either ‘very’ or ‘somewhat familiar’ with PVRs. While PVR penetration in Canada is roughly 55,000 units (less than 0.05% of Canadian households), a healthy 11.3% of respondents reported owning a PVR, more than 22 times the national average.

Experience makes the difference

Of those who reported owning a PVR, 41.2% said that their overall television viewing increased, while 50% reported it remained the same.

The survey found that 44% of PVR owners identified ‘never missing my favourite shows’ as the attribute they like most about their PVR. ‘Skipping commercials’ was a distant second at 23.5%. ‘Pausing live TV’ was third at 14.7 %.

These findings resonate with existing research into PVR ownership which contradicts a prevailing understanding of PVRs as primarily ‘commercial-skipping machines.’

Of those surveyed who did not own a PVR, a surprising 29.2% reported that they intended to buy one in the next 12 months.

While 38.2% of all respondents considered the PVR to be a ‘real threat’ to advertisers, 61.8% considered the PVR to present either a minimal or no threat to advertisers. When measured against profession, advertisers were most likely (52.3%) to view PVRs as a threat to advertisers, followed by media executives, programmers, or account executives, (48.7%).

Agencies were least likely (34.7%) to think that PVR presented a real threat to advertisers.

Fear of the unknown

Interestingly, respondents who are unfamiliar with PVRs are significantly more likely than people familiar with PVRs to think the technology is a ‘real threat’ to advertisers.

Of those ‘very familiar’ with PVRs, only 39% thought they presented a real threat to TV advertisers while 43.1% of those unfamiliar with the device thought so.

Conversely, people who reported they are ‘very familiar’ with PVRs are almost twice as likely (60.7%) than people unfamiliar with PVRs (31.4%) to think the device presents an important opportunity for advertisers.

Similarly, opinions with regard to the potential opportunities for broadcasters differed depending on respondents’ familiarity with the technology. Of those familiar with PVRs, 50% thought PVRs presented an ‘important opportunity’ for broadcasters, while only 29.4% of those unfamiliar with PVRs thought so.

Overall, 33.9% of respondents thought the PVR presented a ‘significant threat’ to broadcast networks while 66.1% said the PVR presented minimal, or no threat, to broadcast networks.

The PVR has often been described as a ‘show-me’ technology; one that is difficult to describe in a 30-second elevator ride. Yet speak with anyone who owns one, and they’ll tell you they can’t live without it.

Familiarity breeds contentment

Familiarity with, and ownership of, PVRs also had an effect on perceptions regarding the eventual widespread adoption of the device by Canadians. Overall, 75% of the survey’s respondents either agreed or strongly agreed that the PVR would be as widely adopted as the DVD. This view is more passionately held among those familiar with PVRs (87.5%), and those who already own one (91%).

Among those who did not own a PVR, 73% said it would become widely adopted.

Clearly, those who live with PVRs, and have experienced on-demand television, are far more bullish on the technology’s chances of being widely embraced by Canadian viewers than those who have not.

VIDEO-ON-DEMAND

The participant’s familiarity with video-on-demand was equally high; 84.7% said they were either ‘very familiar’ or ‘somewhat familiar’ with VOD.

Interestingly, more than 28% of respondents did not know if their cable provider offered a video-on-demand service. As all of Canada’s major cable operators have already rolled out video-on-demand services, this prompts speculation that the cable industry’s marketing efforts have yet to ramp up.

Of those who were aware their cable provider offered VOD, 42.9% of respondents reported having used it to date, an encouraging number for the cable guys as they have tapped VOD as a new revenue stream and to differentiate their service from direct-to-home satellite offerings.

As with PVRs, familiarity with video-on-demand played a major role in people’s perceptions regarding threat and opportunity to advertisers. Overall, 23.9% of respondents thought VOD presented a ‘real threat’ to advertisers; however this number increases to 32.6% among those who were not familiar with VOD.

Of those who identified themselves as being ‘very familiar’ with VOD, 48.1% thought it presented an ‘important opportunity’ for advertisers compared to only 30.4% of those unfamiliar with the technology.

In short, as people’s familiarity with the on-demand television experience increases, their perception of on-demand technologies as a threat to advertisers and broadcast networks diminishes.

Ian MacLean is the director of the Media Experts iTV Lab in Montreal. He can be reached at: ianm@mediaexperts.com.

What they said

Selected comments from survey respondents

‘People into PVRs are already into commercial-avoidance behaviours. At least now there is a better chance they will be able to watch their favourite programming and thus possibly see the commercials.’

‘On-demand TV is a threat to the entire television broadcast industry. Without TV ad revenues, production is reduced (quality and quantity), viewers leave, and stations secure reduced revenue to put back into production. It will be a vicious cycle downward.’

‘There was concern with VCRs and viewers being able to fast forward or delete commercials. This has been found not to affect TV advertising as much as what was thought. I think PVR impact will be similar.’

‘I don’t believe that most people will have the time, initiative or comfort with technology to use PVRs on a regular basis.’

‘PVRs make timing and targeting an ad campaign worthless.’

For the complete survey results, please visit www.itvlab.tv/survey.