Broach the topic of the PVR in most quarters of the advertising industry and the odds are you'll trigger what has become an almost archetypal response. It's a smile. A satisfied smile, a smile with overtones of smugness perhaps, but one borne out of an almost palpable sense of relief.
The PVR is, of course, the advertising apocalypse that never happened. Four or five years ago, when the TiVo personal video recorder was building momentum in the US, there were all sorts of lurid predictions being made.
The main attraction of a PVR is obviously the ease with which you can record programmes for later viewing, but the fringe benefit is the ability to fast-forward through ad breaks. If enough people were to start doing that during enough of their viewing time, then television advertising, as we've grown to understand it, would be dead.
But all the evidence is that they don't - not enough for it to make a real difference. There are now more than two million UK homes with a PVR (the vast majority are Sky+ boxes), amounting to around 8 per cent of UK homes. So we now have a statistically robust group to research - and both Barb and Sky, which has its own 20,000 Sky View panel, are doing just that.
Only 197 Barb homes have a PVR, dwarfed by the 6,175 Sky View homes with a Sky+ box, but many agencies prefer the Barb figures because they reflect a demographic representative of the make-up of the country as a whole, whereas the Sky figures tend to be skewed towards a younger, more upmarket demographic.
Not that it matters much, because both tell the same story. In the Barb figures, 13 per cent of all viewing is time-shifted. In the Sky View analysis, it's 12.2 per cent on average. Same difference. "It's true that PVRs are much less of a problem in terms of time-shifted viewing than many people predicted," Andy Barnes, the sales director at Channel 4, confirms. "If 13 per cent of viewing is of recorded programmes, then 87 per cent of viewing is live - and you can't fast-forward through the breaks if you're watching live."
And here's the even better news: when viewers watch time-shifted programming, they may fast-forward through a lot of advertising, but they still watch 39 per cent at normal speed. One of the most important findings of an ethnographic study conducted by Sarah Pearson at Actual Consumer Behaviour and Professor Patrick Barwick of the London Business School was that people have "an embedded routine of how they watch TV". Barwick concludes: "People with PVRs love them, but most of their viewing is still live, and the net impact of advertising is likely to be small."
There's no trend data yet, but all the anecdotal evidence from the US is that we shouldn't expect substantial changes in behaviour as the PVR phenomenon grows. For instance, veteran TiVo users are less likely to fast-forward through ads than new converts. The theory is they've become so blase about the technology, they've forgotten they have that option.
And a Millward Brown study in the US last year showed there is no difference in ad recall between PVR and non-PVR homes for ads aired on network TV in peaktime. For advertisers on smaller budgets, that caveat may be worrying. But still, no need to panic.
Or is there? Some observers continue to caution against complacency. Jean-Paul Edwards, the head of media futures at OMD, argues that we'll soon regard PVRs as an interim technology - in the near future we'll consume most programming on-demand over the internet. "These days we have to see the PVR as just one of many pressures on the conventional TV model," he says.
So forget the PVR - the on-demand phenomenon may have even more radical implications for the advertising model. But other technophiles point out that next-generation technologies may actually give advertisers even more scope and options.
The new generation of PVRs have "partitioned" hard drives to accommodate virtual on-demand libraries of content downloaded overnight. Nigel Walley, the chief executive of Decipher, says: "There is showcase space on the hard drives of these machines that can be sold to advertisers. It will enable you to request extra advertising material - for instance, video brochures and long-form commercials. These machines also offer a return loop by plugging into the phone socket so the PVR operator can use it in the future to capture data - everything from viewing habits to demographic and lifestyle data and purchasing habits."
Sky is already looking to talk to advertisers about this. Jeremy Tester, the director of insight at Sky Media, says it's ironic that the technology that was supposedly going to kill TV advertising is actually doing the opposite. He adds: "Let's not forget when an existing Sky Digital household upgrades to Sky+, there's a 12 per cent increase in viewing. When something becomes more fun, you tend to do it more. These people have an opportunity to watch more rather than less commercials. The technology advertisers were asked to fear is actually helping to make advertising a lot more effective."
PVRs: THE STORY SO FAR
- Although hard-drive video recorders had been available in the US since 1967, TiVo created the US PVR market when it launched in 1999. It now has more than four million subscribers. This is only a fifth of the total US market - because US cable network owners force customers to use their own brand machines. Forecasts predict that PVRs will be in more than 60 million homes (55 per cent of the market) by 2011.
- TiVo also launched a UK-specific machine in 2000, but take-up was slow and production ceased in 2002.
- Sky+ launched in 2001 and uptake began to climb steeply following a £20 million ad campaign in 2003. In January 2007, subscriptions topped the two-million mark. Its target is to achieve a 25 per cent penetration of the Sky Digital customer base (currently 8.5 million) by 2010. It should actually hit that target during 2007.
- Telewest launched the first UK cable PVR, called TVDrive, in March 2006. Following mergers with ntl and Virgin to create Virgin Media, the box has been rebranded as V+. There are currently around 50,000 subscribers.
- A study from Starcom, using Barb data, found that Sky One and Channel 4 are the two channels most likely to be recorded on PVRs. Drama is the genre time-shifted most often. Sport, news, music and children's programming are least likely to be recorded.