Tuesday, December 10, 2002
Irrational Unexuberance?
I've been mulling over this Jane Galt Article for a day or two now. Normally her analysis is nothing short of brilliant, but the article decrying the Personal Video Recorders such as Tivo, ReplayTV and the like suffers from whatever the opposite of irrational exuberance is.
I believe that these devices will take off in the not-too-distant future because the Cable TV companies will start to offer them as part of the package to their customers. They need to give people a reason to upgrade - digital cable is one, this is another. It seems obvious, but it's imporant to note that these devices only allow users to skip commercials on pre-recorded content. Sure, you can start watching 15 minutes after a show starts and skip the commercials, but there is plenty of content that people want to watch live. Sports, for example. Perhaps even news programs. Football is probably an advertiser's dream there are so many long breaks.
I don't think I'm being a hopeless optimist, a person who wants to have his cake and eat it too. I do think these devices, once popularized, will change the landscape of advertising. First it will change the fee structure: sports broadcasts and any program that people are apt to watch when it is aired will charge a premium for advertising. The type of thing that I'm afraid of is that we'll start to see more product placement and ads woven into the content, like the Truman Show. At a minimum we'll see the end of standardized lengths for commercials. If one commercial is 7 seconds another is 49 seconds and another is 17 seconds, a 30 second skip button isn't very useful, and you'll at least see some of the commercial if you fast forward. I can imagine that adding interactive features to shows will also encourage people to watch them when they are aired.
If the software industry can survive its rates of rampant piracy (about 80 percent), I think that the entertainment industry can find a way to survive. I think they want to trumpet a bleak future, make people worried and flee to the courts because that is the way they've been most comfortable operating to have their cake and eat it too.
8:21:35 AM
Next week, my favorite Allergy drug, Claritin, goes over-the-counter. The bad news: even if the price drops by 76%, it's still more out-of-pocket for me than with the insurance co-pay. The better news: one less reason to have to call the doctor.
8:03:57 AM
Last Update: 1/1/2003; 10:06:07 PM
