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There’s a TV Trainwreck Coming

Posted by Steve Hall · Tuesday May 25, 2004

Like a scientist in a disaster movie who can’t convince officials that doom is near, Geoffrey Meredith laid bare the impending disaster in the TV industry in his informative and thorough presentation, 2006: The End of Television as We Know It.

The facts aren’t pretty:

  • DVRs are about to explode as cable companies install and integrate them widely.
  • The consensus prediction is 50MM DVR households by 2008.
  • DVR owners skip an average of 71 percent of commercials.

Doing some math:
20 percent HH penetration of DVR by 2006
x 50 percent ads skipped (conservative)
x $54 billion ad industry
= $5.4 billion in missing inventory

The impact of this loss will also not be evenly spread. Research shows that while only 33 percent of beer commercials are skipped a whopping 93 percent of fast food, credit card, and mortgage ads aren’t watched by DVR users.

Having laid out this grim scenario, the presenter then prognosticated about ways markers can be successful in this environment. The alternatives ranged from well-known approaches like product placement to an eye-popping demo of a demographically customized television commercial where video clips and special offers were stiched together on the fly to appeal to specific customer groups.

Special etymological bonus: Do you know what “TCK” stands for? The presenter used it to describe traditional product advertising. It refers to creative with “Two Chicks in a Kitchen” talking about dishwashing detergent, food prep, etc.

Related topics: SF 04, Track 2: Advertising and Promotion
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