Media: All About The return of TiVo

Can TiVo, in tandem with Virgin, compete with Sky?

Those among us of a millenarian bent will be all aquiver at the prospect of the "Second Coming" of TiVo. Because, of course, there's nothing quite like the frisson of a no-holds-barred TiVo fever.

Back in 2000, with the Western world having survived the harrowing "millennium bug" meltdown but with the dotcom bubble about to deliver its own equally scary intimations of mortality, TiVo was poised to kill TV advertising.

In theory, you understand. TiVo was, of course, the first mass- market hard-drive personal video recorder - and, back then, it was taking the US market by storm.

Ad avoidance was the phrase on everyone's lips - and the industry was afraid. Unfortunately, TiVo was overtaken by an alternative version of reality. People, laughably perverse entities that they are, continued to watch ads; BSkyB launched its own PVR, Sky+; and TiVo quit the UK in 2003.

Well, now it's back. Following a partnership deal with Virgin Media, it is again about to reinvent TV advertising - this time, in a more positive fashion. It is, in short, about to deliver the much talked-of targeted advertising future.

Virgin has, since the mid-Noughties, offered V+, its me-too version of the Sky+ box - but, in 2009, it also signed a partnership deal with TiVo. We're now seeing the first public fruits of that partnership. In recent weeks, it has been telling its subscriber base about a new TiVo gizmo - and 50,00 have registered their desire to have one.

Virgin believes that its TiVo offering could give it a new edge over Sky because the new box outperforms Sky+ in two important ways. First, there's connectivity: the return loop for data gathering is generally considered to be better than Sky's and the box offers 10Mbyte connection to the wider internet.

Second, the TiVo software aspires to a degree of artificial intelligence. It can evaluate and interpret your viewing choices, look for patterns and preferences, and attempt to predict what you might like in the future.

So, from an advertising point of view, there's a potential to combine insight with connectivity in order to serve you with advertising tailored to your tastes and demographic profile. And it's timely because Sky has a rival targeting system that it has been evolving over the past couple of years.

1. Sky's own tailored advertising system, dubbed AdSmart, won't be ready until 2013 at the earliest. But it has already begun talking to its subscribers about what it calls "personalised services" (including programme recommendations, as well as targeted advertising). It recently sent out a letter to its customer base, which read in part: "We may use information about the shows and channels you watch. That way, we can introduce ... programme recommendations and can even tailor some of the ads you see so they're more relevant to you. If you don't want these services, you can opt out at any time."

2. The balance of emphasis where AdSmart is concerned will be (in contrast to TiVo's directly gathered behavioural analysis) the demographic data Sky gleans as a matter of course from its customers, allied to broader insights supplied by Sky IQ - a division formed last year when Sky acquired part of the Experian database services company. AdSmart will make use of storage capacity on the Sky+ box (currently used mainly for the Anytime service) to store ads that can be fed into the broadcast stream in selected slots. It is envisaged that AdSmart could allow an advertiser to serve different copy to different segments of the whole Sky universe. Or a spot could be sold to several advertisers on a split audience basis.

3. TiVo adds a new facet to Virgin's "dynamic advertising" service launched in November 2009, which was instigated to serve 30-second preand post-roll ads in video-on-demand programming. Virgin is gearing up to present its plans to agencies - but remains reluctant to release details of its proposed new targeting plans. Its focus will remain on VOD, rather than the broadcast stream.

4. Agencies question whether either Virgin or Sky have hit on a viable long-term strategy as regards the granularity of the targeting options they might offer. In recent presentations, options shown as examples include targeting by postcode or age or sex of account holder. Planners argue they've been doing better than this for decades using industry standard data allied to astute choice of programming environments.

WHAT IT MEANS FOR ...

ADVERTISERS

- Some agency sources say that the agenda at BSkyB and Virgin Media has been driven by technologists who have little understanding of the advertising market and have even less empathy for the fundamental business goals of advertisers.

- Both companies, they suggest, could and should work harder to close that credibility gap. Planners, in particular, have been frustrated at the level of some of the dialogue there's been to date.

- Undoubtedly, though, there is a genuine opportunity lurking here. Sky, in particular, knows an awful lot about its subscribers and the households in which they live. Perhaps, though, this will prove in the long run to be of more interest to DRTV rather than brand advertisers.

COMMERCIAL BROADCASTERS

- Broadcasters (as opposed to platform operators) worry about the potential for being marginalised in the targeting business. If an advertiser wants a targeted spot (say, in The X Factor), it could ultimately mean that ITV would have to cede some control of that spot (and perhaps part of its monetisation) to Sky.

- So this could involve a lot of grief. Anything that involves increased costs while delivering decreased revenue is unlikely to find unequivocal supporters in the media business.

- Especially as these two systems, Virgin's and Sky's, are philosophically miles apart. As Nigel Walley, the managing director of Decipher, puts it: "Broadcasters have to work across all platforms. So they ideally need a single ad platform that works across them all too. Everyone remembers all too well that red button (interactive) advertising failed because it was only available on Sky."

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